Rent the Runway continues to narrow losses, revenues surge 46% in 2022

By

Benjamin Fitzgerald

Published
Apr 13, 2023

Rent the Runway announced on Thursday revenues in 2022 grew 46% to $296.4 million, on the back of a strong finish in the fourth quarter which saw revenues total $75.4 million, up 18%.

The New York-based luxury rental platform said average active subscribers grew 38% for the twelve months ending January 31, with active subscribers increasing 10% in the fourth quarter. The company also managed to narrow losses in fiscal 2022, reporting an annual net loss of $138.7 million, compared to a net loss of $211.8 million in fiscal 2021.

Likewise, fourth-quarter net losses shrunk to $26.2 million, as compared to a loss of $39.3 million in 2021.

​"I'm proud that in fiscal 2022, we achieved 46% revenue growth and completed a significant financial transformation, doubling our gross margins compared to 2019, right-sizing our fixed cost base, improving the capital efficiency of our product acquisition and restructuring our debt. These efforts drove progress on our path to FCF profitability, as we posted our first full year and third consecutive quarter of positive adjusted EBITDA ahead of the timeline we outlined at IPO," said Jennifer Hyman, CEO and co-founder of Rent the Runway.

"We believe we’ve built the financial foundation and infrastructure to capture the vast opportunity ahead and have conviction that we’ll continue to grow and become a profitable business by delivering meaningful value and innovation to the customer. We kicked off our customer-centric strategy in 2023 by changing all of our subscription programs to include an additional item in every shipment, which has already improved retention and rejoin rates, and contributed to our record high active subscriber count of 141,205 as of April 8, 2023."

In September, Rent the Runway revealed its restructuring plan "to reduce costs, streamline its organizational structure and drive operational efficiencies," according to a press release at the time.

The plan included total workforce reductions of approximately 24% of corporate employees, reorganizing certain functions and reallocating resources to continue "to focus on customer experience and growth initiatives."

Looking ahead, Rent the Runway said it expects fiscal 2023 revenues in the range of $320 million to $330 million.