By Sabela Ojea
Shares of Rent the Runway dropped Wednesday, a day after the company said it expects lower revenue in the fiscal fourth quarter after losing more paying subscribers in the latest quarter.
At 12:06 p.m. ET, shares were down 26% at 49 cents. The stock has sank 83% since the year started, on pace for its worst year on record.
After the market close Tuesday, the subscription fashion rental company guided for revenue of at least $74 million for the fourth quarter, down from reported revenue of $75.4 million a year earlier. Analysts polled by FactSet forecast revenue of $74.2 million.
For the year, the company kept its revenue outlook unchanged at $296.4 million, but withdrew its free cash flow guidance. It still expects to achieve free cash flow next year, it said.
Rent the Runway’s forecast comes after seeing another drop in revenue in the Oct. 31 quarter, as its subscriber base continued to get squeezed amid financial efforts to lower churn levels among newer paying members.
“I want to be clear that we believe our lack of growth in 2023 is a temporary problem, primarily driven by the inventory depth issue that we explained in detail last…
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