Rent The Runway Says Rentals Are Profitable — Retail Bum

Rent the Runway is seeing renewed demand for its rental service, with the company recording a 10% year-on-year growth in active subscribers to 126,712 as of January 31, 2023.

By Saturday last week, the company had added another 11.4% subscribers, increasing the total number to 141, 205.

Rent the Runway’s Q4 net loss decreased year over year, with losses dropping from $39.3 million to $26.2 million. Simultaneously, the company’s adjusted EBITDA turned positive at $7.1 million, a substantial improvement from the previous year’s Q4 loss of $5.5 million. Additionally, the company exceeded analysts’ growth expectations of 17.4%, generating $75.4 million in revenue during the period.

The subscription service is now looking to grow its customer base even further and faster as Jennifer Hyman, the co-founder and chief executive of the company, has set ambitious growth plans. The company now aims to take its current active subscriber count to more than 158,000 by the end of 2023, representing a 25% rise in total subscribers for the year.

Meeting the target would help the company generate an extra $20 million in cash to fund expansion. Once the company reaches 185,000 subscribers, it will hit cash-flow break-even on a maintenance basis.