Rent the Runway Q1 results: Inventory strategy shows promise

Rent the Runway, a fashion rental service, today announced its financial results for the fiscal quarter ended April 30, 2025, highlighting a significant shift in its corporate strategy that appears to be yielding positive outcomes.

The company’s new inventory strategy saw a 24 percent increase in new inventory receipts compared to the first quarter of 2024. This included the launch of 36 new brands and over 1,000 new styles.

Financially, Rent the Runway reported revenue of 69.6 million dollars for the first quarter, a 7.2 percent decrease year-over-year, while the company’s active subscribers increased by 1 percent.

Jennifer Hyman, co-founder, CEO, and chair of Rent the Runway, expressed strong conviction in the results, stating, "We made a big bet on new inventory and we’ve already seen higher customer engagement and retention. I believe that Rent the Runway’s momentum and customer loyalty is back."

Gross profit for the first quarter was 21.9 million dollars, a 22.9 percent decrease from the prior year, with a gross margin of 31.5 percent. The net loss for the quarter widened to 26.1 million dollars and adjusted EBITDA was negative 1.3 million dollars, a decrease from 6.5 million dollars in the same period last year.

The company also expanded its offerings from key brands, releasing new collaborations and increasing styles from popular labels, which have shown leading customer engagement.

Beyond inventory, Rent the Runway has focused on improving the new member experience, offering "white glove service" including styling support, a 60-day customer promise, and direct calls to new members. Highly requested product features, such as back-in-stock notifications, have also been introduced, with significant subscriber engagement.

Looking ahead to the fiscal second quarter of 2025, Rent the Runway expects revenue between 76 million dollars and 80 million dollars, with an adjusted EBITDA margin between negative 2 percent and 2 percent. For the full fiscal year 2025, the company continues to anticipate double-digit growth in ending active subscribers, with inventory receipts expected to surge by 134 percent year-over-year. The company also plans to introduce over 40 new brands and 2,700 new styles.