NEW YORK - Rent the Runway Inc. (NASDAQ:RENT) saw its shares surge 4.58% in after-hours trading on Tuesday after the fashion rental company reported better-than-expected second quarter results and raised its full-year revenue outlook.
The company posted a narrower-than-anticipated loss of $4.17 per share for the quarter ended July 31, beating analyst estimates of a $5.47 per share loss. Revenue rose 4.2% YoY to $78.9 million, exceeding the consensus forecast of $77.1 million.
Rent the Runway's improved performance was driven by strong momentum in its Reserve offering and higher rejoin rates of former customers. The company cited operational, product, and merchandising improvements that resulted in an enhanced customer experience.
Looking ahead, Rent the Runway raised its fiscal year 2024 revenue growth guidance to between 2% and 6%, up from its previous outlook. For the third quarter, the company expects revenue in the range of $75 million to $77 million, in line with analyst projections of $75.6 million.
"We believe that our sustained improvement in revenue growth, along with measurable progress on profitability, are indicators that our business is getting stronger," said Jennifer Hyman, Co-Founder, President and CEO of Rent the Runway.
The company also reiterated its commitment to achieving free cash flow breakeven for fiscal year 2024, highlighting its focus on profitability alongside growth.
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