The earnings call highlighted significant improvements in debt restructuring and customer experience, coupled with strong brand partnerships and inventory strategy. However, these positives were balanced by challenges in achieving revenue growth and declines in gross margin, leading to a cautious outlook.

Company Guidance

During Rent the Runway's Q3 2023 earnings call, the company disclosed significant financial adjustments and strategic plans aimed at stabilizing and growing the business. They announced modifications to their debt terms, eliminating both PIK and cash interest for six quarters starting Q4 2023, thereby reducing total interest expenses by $66 million over this period. The minimum liquidity covenant was lowered from $50 million to $30 million, providing additional financial flexibility. Rent the Runway aims to reach free cash flow breakeven in fiscal year 2024, despite ending Q3 with 131,725 active subscribers and revenue of $72.5 million, a 6.3% year-over-year decrease. The company is focusing on inventory depth improvements, which have already increased in-stock rates by 1,400 basis points from Q2, leading to higher customer satisfaction and retention. Adjusted EBITDA for the quarter was reported at $3.5 million, or 4.8% of revenue, with expectations for fiscal year 2023 revenue to be at or above $296.4 million, maintaining an adjusted EBITDA margin guidance of 7% to 8%.

Debt Restructuring and Financial Flexibility

Significant modifications to debt terms: elimination of PIK and cash interest for 6 quarters, reducing interest expense by $66 million, and lowering the minimum liquidity covenant from $50 million to $30 million.

Improved Customer Experience and Loyalty

Increase in subscription Net Promoter Scores to the highest levels since pre-COVID, a 40% reduction in inventory as a reason for churn, and a 50% year-over-year increase in purchase rate.

Enhanced Inventory Strategy

Improved inventory depth by 1.7x in the second half of 2023, leading to a 1,400 basis point increase in in-stock rates compared to Q2, and a 30% increase in hearts on new inventory.

Brand Relationships and Product Offerings

Launch of luxury evening wear category and strong brand partnerships with 50% of first-half 2024 inventory acquired via pay-for-performance.

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Rent the Runway (RENT) Earnings, Revenues Date & History

The upcoming earnings date is based on a company’s previous reporting, and may be updated when the actual date is announced

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RENT Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Dec 08, 2021	2021 (Q3)	-19.17 / -134.40	-13.544	-892.32% (-120.86)	―	―
Apr 13, 2022	2021 (Q4)	-14.12 / -12.40	-11.862	-4.54% (-0.54)	―	―
Jun 09, 2022	2022 (Q1)	-14.92 / -13.40	-12.932	-3.62% (-0.47)	―	―
Sep 12, 2022	2022 (Q2)	-13.07 / -10.60	-67.2	84.23% (+56.60)	―	―
Dec 07, 2022	2022 (Q3)	-11.13 / -11.20	-134.4	91.67% (+123.20)
Apr 12, 2023	2022 (Q4)	-10.13 / -8.00	-12.4	35.48% (+4.40)
Jun 07, 2023	2023 (Q1)	-9.40 / -9.20	-13.4	31.34% (+4.20)
Sep 08, 2023	2023 (Q2)	-8.02 / -8.00	-10.6	24.53% (+2.60)
Dec 05, 2023	2023 (Q3)	-8.45 / -9.00	-11.2	19.64% (+2.20)
Apr 10, 2024	2023 (Q4)	-5.34 / -7.02	-8	12.25% (+0.98)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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RENT Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Dec 09, 2024	$12.82	$10.02	-21.84%
Sep 05, 2024	$15.08	$10.90	-27.72%
Jun 06, 2024	$26.81	$23.22	-13.39%
Apr 10, 2024	$7.40	$19.38	+161.89%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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