Shares of Rent the Runway Inc. raced higher after hours on Wednesday after the online clothing-rental platform boosted its full-year sales outlook and said its restructuring plan was “substantially complete.”
The company said it expected full-year sales of between $293 million and $295 million, better than a prior forecast of $285 million to $290 million. For the fourth quarter, Rent the Runway RENT, +0.74% said it expected sales of between $72 million to $74 million.
FactSet forecast revenue of $71.8 million for the fourth quarter, and revenue of $288.2 million for the full year.
For the third quarter, Rent the Runway reported a net loss of $36.1 million, or 56 cents a share, compared with a loss of $87.8 million, or $6.72 a share, in the same quarter last year. Revenue jumped 31% to $77.4 million, compared with $59 million in the prior-year quarter.
Analysts polled by FactSet expected Rent the Runway to lose 56 cents a share, on sales of $73.3 million.
Shares climbed 11% after hours on Wednesday.
Chief Executive Jennifer Hyman, while noting a “tough environment” during the quarter, said in a statement: “Our restructuring plan, now substantially complete, allows us to invest in our customer proposition while significantly improving cash burn.”
The company reported the results after announcing plans in September to cut 24% of corporate staff by the end of the fiscal year, following shakier demand among subscribers that began in June. Chief Financial Officer Scarlett O’Sullivan on Wednesday also said that savings from the company’s restructuring efforts set the company up for “strong” adjusted EBITDA — or earnings before interest taxes, depreciation and amortization — in fiscal 2023.
Rent the Runway has tried to take advantage of a broader return to offices, concerts and other aspects of pre-pandemic life. Earlier this year, executives said customers were snapping up cocktail dresses and making more bold fashion choices.
But remote work, where the bar for style is far lower, has endured. Rising grocery prices and gas bills have dampened demand for clothing and many items that are typically sold online. Earlier in the year, rival Stitch Fix Inc. SFIX, +0.54% also laid off staff.
Rent the Runway stock is down 84% year to date. The S&P 500 Index SPX, -0.19% has fallen 18% over that time.