Rent the Runway sees more than 2 million weddings planned for this year and all the parties that come with them as a huge blessing for its business.
Also, according to co-founder and CEO Jennifer Hyman, Rent the Runway is cutting back on the benefits of consumers looking for price and stability in times of inflation – Americans branding clothing as seeing higher gas prices, larger gross bills and even more expensive price tags.
To be sure, Rent the Runway is planning a price increase for its membership plan, which will take effect in early May, to combat its own higher costs.
“We’re entering one of the strongest rental environments we’ve ever seen,” Hyman said in a Zoom interview. “The inflationary environment is essentially a competitive advantage for runway rentals.”
On Wednesday, the fashion rental platform reported fiscal fourth-quarter revenue ahead of narrower-than-expected losses from analysts’ estimates, as the company won because it wanted its wardrobes to fit its hybrid work schedule and refresh their clothing to prepare for spring. Summer social events.
Shares rose nearly 6% in after-hours trading.
Rent the runway is closely related to how much customers are spending on the experience rather than the business thing, Hyman said. So with more people traveling, Uber roaming around town and booking bookings at restaurants, there seems to be an increase in Rent the Runway users, he said.
Runway members pay a monthly fee of $ 94 to $ 235 for four to 16 different items of designer clothing or accessories. Users can use additional items in their plan for extra charge. They can also rent one time for a period of four to eight days. And Rent the Runway gives customers the option to purchase items on its website at a full sticker price.
The retailer reported a net loss of $ 39.3 million, or 62 cents per share, for the three-month period ended January 31, compared to a loss of $ 38.8 million or 70 cents per share a year earlier. This is narrower than analysts’ estimates for a loss of 70 cents per share, according to a reflective poll.
Revenue rose nearly 91% to $ 64.1 million from $ 33.5 million a year earlier, topping the estimate of $ 63.2 million.
The company’s fourth-quarter gross margin of 36.7% also exceeded expectations of 27.3%, according to a separate survey by StreetAccount.
Runway Rental in the fourth quarter with 115,240 active customers, up 110% from a year earlier. It counted a total of 159,544 subscribers, of whom their accounts were on hold.
“Fifty percent of our traffic comes because of runway rentals [those people] There is an upcoming event, or they have an upcoming occasion, “Hyman said. He added the company’s vision at the moment is to come out of the epidemic, to serve as a” very unique window “to gain new customers and hold their business longer.
Rent the Runway, for example, has launched its own wedding concierge service to cater to people looking for a wedding dress. In its recent marketing, the company has positioned itself as “a value-based way to dress for multiple events,” Hyman says.
For the first quarter of FY 2022, runway fares are expected to sell between $ 63.5 million and $ 64.5 million, with a total of 130,000 to 132,000 active customers. According to Refinitive, analysts were looking for revenue of $ 64.3 million.
For the year, the company’s revenue will range from $ 295 million to $ 305 million, compared to $ 203.3 million in FY2021 sales. Analysts forecast revenue of 305 million.
Find the full financial press release from Runway Rentals here.
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