RENT

Revenue Grew to $97.7M, up 20.8% YoY Gross margin expansion of 609 basis points Reaffirms FY26 Guidance for Revenue and Adjusted EBITDA Announces Paige Thomas as Chief Executive Officer and President and Teri Bariquit as Chair of the Board NEW YORK, Sept. 11, 2026 (GLOBE NEWSWIRE) -- Rent the Runway, Inc. (“Rent the Runway” or "RTR") (NASDAQ: RENT), the company transforming the way women get dressed, today reported financial results for the fiscal quarter ended July 31, 2026. Second quarter results reflect continued execution against our plan, with total revenue of $97.7 million, up 20.8% YoY. Net loss was $(12.9) million, or (13.2)% of revenue, compared to $(26.4) million, or (32.6)% of revenue, in the second quarter of fiscal year 2025. Adjusted EBITDA was $12.6 million, or 12.9% of revenue, compared to $3.6 million, or 4.4% of revenue, in the second quarter of fiscal year 2025, driven by gross margin expansion of 609 basis points and disciplined control of operating expenses. We also continued to see growth in our add-on business, with add-on bookings increasing 81% year-over-year in Q2 and 33% of subscribers using an add-on during the quarter, up from 29% a year ago, driven primarily by higher subscriber engagement with our assortment and membership flexibility. A key focus in 2026 remains on Discovery, and this quarter we completed the rollout of AI-powered outfits generation to all customers, delivering on the commitment we set out at the start of the fiscal year. We also concentrated our resources on the core rental and selling businesses, stepping back from several pilots and smaller initiatives to focus on the experience our customers value most. Rent the Runway also announced today that Paige Thomas has been appointed Chief Executive Officer and President and member of the Board of Directors, effective September 14, 2026, succeeding Teri Bariquit, who has served as Interim CEO and President since May 2026. Ms. Bariquit has been appointed non-executive Chair of the Board of Directors, effective the same date, and will work closely with Ms. Thomas to support the transition. Dhiren Fonseca, will step down as Executive Chairman, and continue as a member of the Board. The Board of Directors thanks and acknowledges Mr. Fonseca for his leadership during the period of transition. Ms. Thomas brings over 30 years of retail leadership to the role. She joined Rent the Runway as Chief Commercial Officer in June 2026, and previously served as Chief Merchant and Product Innovation Officer at Signet Jewelers, President and CEO of Saks OFF 5TH, and spent more than a decade at Nordstrom, including five years leading Nordstrom Rack. "Rent the Runway is operating from a focused foundation, with a core rental business that continues to grow and a customer who is telling us what she values most," said Teri Bariquit, Interim CEO and President of Rent the Runway. "This quarter we concentrated our resources on that core, delivered capabilities against the discovery experience we committed to at the start of the year, and began building a 2027 plan centered on transforming the business. I want to thank Dhiren for his leadership as Executive Chairman through this transition, and I am confident in the company Paige is stepping into.” "I'm focused on listening to our customer and making every decision through her lens, doubling down on fashion and what makes this fashion service platform unique, while executing with operational excellence," said Paige Thomas, CEO of Rent the Runway. "This is not a new direction—it's an acceleration of the strong foundation the team has built. The path is clear, and I've never been more excited to lead the team forward." Recent Business Highlights AI-Powered Outfits Generation Now Live to All Customers: In May 2026, we piloted outfits generation, and by the end of June the experience was live to all customers. Customers can now discover complete looks rather than individual items, making it easier to imagine what to wear together. Engagement with the feature in our app is running approximately 35% and during the pilot, customers with the experience added items to their bag approximately 12% more often than those without it. Using AI to Help Customers See Themselves in the Product: In August 2026, we rolled out avatars within the outfits experience to all customers, so they can see recommended looks on a variety of figures. We also began piloting virtual try-on tools, designed to show a customer how a specific item will look on them before renting or buying. Sharpened Focus on the Core Business: We concentrated our resources on our rental and selling offerings this quarter. We paused the online marketplace pilot until it can be fully integrated with the core rental experience, we paused on-site advertising and monetization to prioritize a premium experience, and we are no longer pursuing new B2B dry cleaning business opportunities while continuing to serve our existing partner. Those resources are moving to the parts of the business our customer values most, including Reserve, which carries our strongest satisfaction scores. "Second quarter results were strong with revenues that reflect an all-time high for the company and profit margin expansion that is driven by our operating discipline and highlights how we intend to run the business,” said Dave Loretta, Interim Chief Financial Officer and Treasurer of Rent the Runway. “We remain committed to strengthening our liquidity position with the improved free cash flow in the first half and additional funding support from our investor group." Second Quarter 2026 Key Metrics and Financial Highlights Revenue was $97.7 million, a 20.8% increase year-over-year from $80.9 million in the second quarter of fiscal year 2025. 140,826 ending Active Subscribers, representing a change of (3.8)% from 146,373 at the end of the second quarter of fiscal year 2025. 148,259 Average Active Subscribers, representing an increase of 1.0% from 146,765 at the end of the second quarter of fiscal year 2025. 186,019 ending Total Subscribers, representing an increase of 0.5% from 185,102 at the end of the second quarter of fiscal year 2025. Gross Profit was $35.3 million, representing an increase of 45.3% from $24.3 million in the second quarter of fiscal year 2025. Gross Margin was 36.1%, as compared to 30.0% in the second quarter of fiscal year 2025. Net Loss was $(12.9) million, as compared to $(26.4) million in the second quarter of fiscal year 2025. Net Loss as a percentage of revenue was (13.2)%, as compared to (32.6)% in the second quarter of fiscal year 2025. Adjusted EBITDA was $12.6 million, as compared to $3.6 million in the second quarter of fiscal year 2025. Adjusted EBITDA Margin was 12.9%, as compared to 4.4% in the second quarter of fiscal year 2025. Net cash (used in) provided by operating activities was $(5.0) million, as compared to $(2.2) million in the second quarter of fiscal year 2025. Net cash used in investing activities was $(16.6) million, as compared to $(30.7) million in the second quarter of fiscal year 2025. Cash and Cash Equivalents was $29.0 million, as compared to $43.6 million in the second quarter of fiscal year 2025. Outlook For the fiscal third quarter of 2026, Rent the Runway expects: Revenue of between $87 million and $90 million Adjusted EBITDA Margin1 of between negative 3% and negative 6% For fiscal year 2026, Rent the Runway expects: Reaffirming Double-Digit Revenue Growth versus fiscal year 2025, led primarily by continued product and inventory experience improvements. Reaffirming Adjusted EBITDA Margin2 of between 4% and 7% Updating Rental Product Acquired3 in the range of $53-55 million versus $74.9 million in fiscal year 2025. There are unknowns around the economy, such as fuel surcharges, tariffs, and other macroeconomic developments, which are not incorporated into our expectations and that can materially affect actual results for fiscal year 2026 versus our current expectations. Our outlook is based on current conditions and assumptions and does not contemplate material deterioration, including volatility in these factors or from our decision to pass on fuel surcharges to customers; accordingly, actual results may differ materially if such conditions change. 1 Represents a non-GAAP financial measure. As more fully described in the Non-GAAP Financial Measures section of this release, a reconciliation of Adjusted EBITDA Margin for the third quarter of fiscal year 2026 is not available without unreasonable efforts.2 Represents a non-GAAP financial measure. As more fully described in the Non-GAAP Financial Measures section of this release, a reconciliation of Adjusted EBITDA Margin for fiscal year 2026 is not available without unreasonable efforts.3 Purchases of Rental Product as presented on the Consolidated Statement of Cash Flows may vary from Rental Product Acquired due to timing of payments for rental product. Rental Product Acquired reflects the cost of owned rental product received in the period. Earnings Presentation, Conference Call and Webcast Rent the Runway will host a conference call and webcast to discuss its second quarter 2026 financial results and provide a business update today, September 11, 2026 at 8:30 am ET. The financial results and live webcast will be accessible through the Investor Relations section of Rent the Runway’s website at https://investors.renttherunway.com/ under the “Events” section. To access the call through a conference line, dial 1-877-407-3982 (in the U.S.) or 1-201-493-6780 (international callers). A replay of the conference call will be posted shortly after the call and will be available for at least fourteen days. To access the replay, dial 1-844-512-2921 (in the U.S.) or 1-412-317-6671 (international callers). The access code for the replay is 13761570. About Rent the Runway, Inc. Founded in 2009, Rent the Runway is disrupting the trillion-dollar fashion industry and changing the way women get dressed through the Closet in the Cloud. RTR’s mission has remained the same since its founding: powering women to feel their best every day. Through RTR, customers can subscribe, rent items a-la-carte and shop resale from hundreds of designer brands. The Closet in the Cloud offers a wide assortment of millions of items for every occasion, from evening wear and accessories to ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear and ski wear. RTR has built a two-sided discovery engine, which connects deeply engaged customers and differentiated brand partners on a powerful platform built around its brand, data, logistics and technology. RTR has been named to CNBC’s “Disruptor 50” five times in ten years, and has been placed on Fast Company’s Most Innovative Companies list four times. Forward-Looking Statements: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. These statements include, but are not limited to, guidance and underlying assumptions for the third fiscal quarter of 2026 and the fiscal year 2026, and statements regarding the anticipated success of our CEO and Board chair transitions, our sharpened business strategies and priorities, the impact of potential product and customer experience improvements, the impact and volume of our new inventory, the success of our AI investments and initiatives, and our position for sustained growth. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements because they contain words such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” or “would,” or the negative of these words or other similar terms or expressions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are based on information available at the time those statements are made and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management as of that time with respect to future events. These statements are subject to risks and uncertainties, many of which involve factors or circumstances that are beyond our control, that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. These risks and uncertainties include our ability to drive future growth or manage our growth effectively; the highly competitive and rapidly changing nature of the global fashion industry; risks related to the macroeconomic environment, including war in the Middle East and fuel surcharges; changes in global trade policies, tariffs, and other measures that could restrict international trade; our ability to cost-effectively grow our customer base; any failure to attract or retain customers; our ability to accurately forecast customer demand, acquire and manage our offerings effectively and plan for future expenses; risks arising from the restructuring of our operations; our reliance on the effective operation of proprietary technology systems and software as well as those of third-party vendors and service providers; risks related to shipping, logistics and our supply chain; risks related to AI technology; our failure to manage our current leadership transitions; our failure to comply with the covenants under our credit agreement; our ability to remediate our material weaknesses in our internal control over financial reporting; our ability to comply with laws and regulations applicable to our business; our reliance on the experience and expertise of our senior management and other key personnel; our ability to adequately obtain, maintain, protect and enforce our intellectual property and proprietary rights; compliance with data privacy, data security, data protection and consumer protection laws and industry standards; risks associated with our brand and manufacturing partners; our reliance on third parties to provide payment processing infrastructure underlying our business; our dependence on online sources to attract consumers and promote our business which may be affected by third-party interference or cause our customer acquisition costs to rise; failure by us, our brand partners, or third party manufacturers to comply with our vendor code of conduct or other laws; risks related to our debt; our noncompliance with Nasdaq Marketplace Rule 5606(c)(2)(A), which requires listed companies to have at least three audit committee members; and risks related to our Class A capital stock and ownership structure. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the expectations is included in our Quarterly Report on Form 10-Q for the quarter ended April 30, 2026, as will be updated in our Quarterly Report on Form 10-Q for the quarter ended July 31, 2026. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise. Key Business and Financial Metrics Active Subscribers is defined as the number of subscribers with an active membership as of the last day of any given period and excludes paused subscribers. Total Subscribers represents the number of subscribers with an active or paused membership as of the last day of the period and excludes subscribers who had an active or paused subscription during the period, but ended their subscription prior to the last day of the fiscal period. Average Active Subscribers is defined as the mean of the beginning of quarter and end of quarter Active Subscribers for a quarterly period; and for other periods, represents the mean of the Average Active Subscribers of every quarter within that period. Gross Profit is defined as total revenue less costs related to activities to fulfill customer orders and rental product acquisition costs, presented as fulfillment and rental product depreciation and revenue share, respectively, on the consolidated statement of operations. We depreciate owned apparel assets over three years and owned accessory assets over two years, net of 20% and 30% salvage values, respectively, and recognize the depreciation on a straight-line basis and remaining cost of items when sold or retired on our consolidated statement of operations. Rental product depreciation expense is time-based and reflects all rental product items we own. We use Gross Profit and Gross Profit as a percentage of revenue, or Gross Margin, to measure the continued efficiency of our business after the cost of our products and fulfillment costs are included. Non-GAAP Financial Measures This press release and the accompanying tables contain the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA margin, free cash flow, and free cash flow margin. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA and Adjusted EBITDA margin are useful in evaluating our performance and free cash flow and free cash flow margin are useful in evaluating our performance and liquidity. Adjusted EBITDA is a key performance measure used by management to assess our operating performance and the operating leverage of our business prior to capital expenditures. These non-GAAP financial metrics are not meant to be considered as indicators of our financial performance in isolation from or as a substitute for our financial information prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. There are limitations to the use of the non-GAAP financial metrics presented in this press release. For example, our non-GAAP financial metrics may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial metrics differently than we do, limiting the usefulness of those measures for comparative purposes. We define Adjusted EBITDA as net loss, adjusted to exclude interest expense, rental product depreciation, other depreciation and amortization, share-based compensation expense, write-off of liquidated assets, non-recurring adjustments, non-ordinary course legal fees, non-ordinary course executive transition costs, income tax (benefit) expense, other income and expense, and other gains / losses. Adjusted EBITDA margin is defined as Adjusted EBITDA calculated as a percentage of total revenue, net for a period. We define free cash flow as net cash used in operating activities and net cash used in investing activities on a combined basis. Free cash flow margin is defined as free cash flow as a percentage of revenue. The reconciliation of presented non-GAAP financial metrics to the most directly comparable GAAP financial measure is presented below. We encourage reviewing the reconciliation in conjunction with the presentation of the non-GAAP financial metrics for each of the periods presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items, and may include other expenses, costs and non-recurring items. Reconciliations of Adjusted EBITDA margin expectations for fiscal year 2026 and Q3 2026 to the most directly comparable GAAP measures are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to the charges excluded from these non-GAAP measures, in particular, share-based compensation expense, and non-recurring expenses, which can have unpredictable fluctuations based on unforeseen activity that is out of our control and/or cannot reasonably be predicted. Investor ContactInvestor Relations [email protected] Media [email protected] Rent the Runway, Inc.Reconciliation of GAAP to Non-GAAP Financial Measures(in millions)(unaudited) The following table presents a reconciliation of net loss and net loss as a percentage of revenue, the most comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA Margin, respectively, for the periods presented: (1) Includes debt (premium) discount amortization of $(2.3) million in the three months ended July 31, 2026, $(3.9) million in the three months ended July 31, 2025, $(4.5) million in the six months ended July 31, 2026 and $3.0 million in the six months ended July 31, 2025.(2) Reflects non-rental product depreciation and capitalized software amortization.(3) Reflects the non-cash expense for share-based compensation.(4) Reflects the write-off of the remaining book value of liquidated rental product that had previously been held for sale.(5) Non-recurring adjustments for the three and six months ended July 31, 2026 includes none and $0.1 million of costs related to public company SOX readiness. Non-recurring adjustments for the three and six months ended July 31, 2025 includes $2.0 million of transaction related costs.(6) Non-ordinary course legal fees for the three and six months ended July 31, 2026 includes $0.7 million and $1.3 million of costs related to securities lawsuits and non-recurring legal fees. Non-ordinary course legal fees for the three and six months ended July 31, 2025 includes $1.4 million and $2.0 million of costs related to securities lawsuits and non-recurring legal fees including transaction related costs.(7) Executive transition for the three and six months ended July 31, 2026 includes $1.8 million of costs related to the transitions of the Chief Executive Officer and Executive Chair roles.(8) Includes other (income) / expense recognized in the period.(9) Includes gains / losses recognized in relation to foreign exchange, operating lease terminations and the related surrender of fixed assets (see “Note 4 - Leases – Lessee Accounting” in the Notes to the Condensed Consolidated Financial Statements).(10) Adjusted EBITDA Margin calculated as Adjusted EBITDA as a percentage of revenue. Rent the Runway, Inc.Reconciliation of GAAP to Non-GAAP Financial Measures(in millions) The following table presents a reconciliation of net cash (used in) provided by operating activities, the most comparable GAAP financial measure, to Free Cash Flow and Free Cash Flow Margin for the periods presented:

This article first appeared on GuruFocus. Release Date: September 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Rent the Runway Inc (NASDAQ:RENT) delivered record revenue of $98 million in Q2 2026, up 21% year over year and 9% sequentially, exceeding guidance. Gross margin expanded by approximately 600 basis points year over year to 36.1%, driven by lower product depreciation and fulfillment costs as a percentage of revenue. Adjusted EBITDA improved significantly to $12.6 million (12.9% of revenue) from $3.6 million (4.4% of revenue) in Q2 2025, reflecting strong operating leverage. The company is focusing on core rental and resale, pausing non-core pilots like marketplace and on-site advertising to improve execution and profitability. New discovery features like outfit generation and virtual try-ons are driving engagement, with 35% app engagement and 12% higher add-to-bank rates, enhancing customer experience. Active subscribers declined 3.8% year over year to 140,826, due to increased pause activity and reduced promotional spending compared to last year. Q3 2026 revenue guidance of $87-$90 million implies flat to 3% growth, a deceleration from Q2, as the company laps subscription price increases from Q3 2025. Adjusted EBITDA for Q3 is expected to be negative 3% to negative 6% of revenue, driven by seasonality and higher product costs from revenue share inventory. Free cash flow remains negative at $21.6 million year-to-date, though improved from the prior year, indicating ongoing cash burn. The company is relying on external funding, including a $10 million term loan and a $15 million backstopped rights offering, to support liquidity and growth plans. Warning! GuruFocus has detected 6 Warning Signs with RENT. Is RENT fairly valued? Test your thesis with our free DCF calculator. Q: What leadership changes were announced during the call? A: Teri Bariquit, Interim CEO, announced that Paige Thomas has been appointed as Rent the Runway's Chief Executive Officer, President, and a member of the Board of Directors effective September 14, 2026. Paige brings 30 years of retail leadership experience, having served as Chief Merchant and Product Innovation Officer at Signet Jewelers and as President and CEO of Saks OFF 5th Avenue, and previously spent over a decade at Nordstrom, including five years leading Nordstrom Rack. Teri Bariquit will move into the role of Non-executive Chair of the Board. Q: What were the key financial results for the second quarter of 2026? A: Dave Loretta, Interim CFO, reported that Rent the Runway delivered $97.7 million in net revenue, an all-time record for the company, up 20.8% year over year and 8.7% quarter over quarter. Gross profit margin was 36.1%, a 609 basis point improvement from 30% last year. Adjusted EBITDA was $12.6 million or 12.9% of revenue versus $3.6 million or 4.4% of revenue in Q2 of last year. Free cash flow year-to-date 2026 was negative $21.6 million versus negative $32.9 million in the prior year period. Q: What is driving the revenue growth and margin expansion? A: Dave Loretta, Interim CFO, explained that revenue growth was primarily due to higher average revenue per subscriber driven by the subscription price increase effective August 1, 2025, and an increase in the volume of add-on bookings. Other revenue, including resale, grew 18.8% year over year. Margin expansion was driven by rental product depreciation and revenue share costs decreasing 240 basis points as a percentage of revenue, and fulfillment expenses decreasing 370 basis points, reflecting higher revenue per order and operational efficiencies. Q: What is the company's strategy and operating objectives going forward? A: Teri Bariquit, Interim CEO, outlined three operating objectives: first, total customer growth built on being a fashion authority and delivering a trusted experience; second, margin expansion through disciplined pricing, promotions, and inventory management to turn product faster; and third, operational excellence in delivering the plan and ensuring garments arrive clean, on time, and in expected condition. She emphasized that Rent the Runway is a premium fashion service platform offering rental and resale, guided by styling intelligence. Q: What pilots or initiatives has the company paused, and why? A: Teri Bariquit, Interim CEO, stated that the company paused select pilots that do not directly serve rental and selling priorities. Specifically, they paused marketplace, paused on-site advertising and monetization to prioritize the premium experience, and are not pursuing new B2B dry cleaning partners. She described these as choices about focus and sequencing to concentrate resources and improve execution and results. Q: What new features and technology investments are driving customer engagement? A: Teri Bariquit, Interim CEO, highlighted that outfit generation was piloted in May and live for every customer by end of June, with engagement running at 35% in the app, ahead of expectations. During the pilot, customers with the outfit experience added to the bank 12% more often, and 77% of the time opened another item within the look. In August, avatars were rolled out within the outfit experience, and virtual try-ons began piloting. Over five months, the company launched personalized carousels, updated imagery, outfit generation, and virtual try-on. Q: What is the outlook and guidance for the third quarter and full year 2026? A: Dave Loretta, Interim CFO, provided Q3 2026 revenue guidance of $87 million to $90 million, representing flat to 3% growth versus Q3 2025, noting the company is lapping the subscription price increases effective at the beginning of Q3 2025. Q3 adjusted EBITDA is expected between negative 3% and negative 6% of revenue due to normal seasonality of higher pause activations and product cost impact of revenue share inventory. For full year 2026, the company reiterated double-digit revenue growth guidance and adjusted EBITDA guidance of 4% to 7% of revenue. Q: What is the company's liquidity position and funding plans? A: Dave Loretta, Interim CFO, stated that liquidity has strengthened with a $10 million term loan as detailed in the Third Amendment to the credit agreement with the same investor group that led the 2025 refinancing. Additionally, the company announced a backstopped rights offering to launch an equity raise of $15 million to further bolster liquidity and support ongoing growth. Teri Bariquit added that the investors continue to have confidence in the strategy and growth plan, and the company is actively working with them on funding. Q: What drove the change in active subscriber count? A: Dave Loretta, Interim CFO, reported that the company ended Q2 with 140,826 active subscribers, down 3.8% year over year, while average active subscribers during the quarter were 148,259, up 1% year over year. The decrease in ending active subscribers was driven primarily by a year-over-year increase in the rate of pause and a decrease in subscribers acquired due to stronger use of promotions in 2025, which have been reduced this year. The company expects active subscribers to be roughly flat in the back half of 2026. Q: What is the plan for rental product investment in 2026? A: Dave Loretta, Interim CFO, stated that rental product investment is now expected to be in the range of $53 million to $55 million in fiscal year 2026, down from $75 million in fiscal year 2025, but an increase from previous guidance of $45 million to $50 million. The change reflects the plan to remain flexible and dynamic with where rental inventory is acquired and to ensure key fall events and new product launches in the second half are more fully stocked. Q: What is the company's approach to resale and other revenue growth? A: Dave Loretta, Interim CFO, noted that other revenue, inclusive of resale, grew 19% over Q2 of last year and represents a significant growth opportunity, drawing on large and growing demand for resale For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Rent the Runway, Inc.? Here are five stocks we like better. Record revenue and improved profitability: Second-quarter revenue rose 20.8% year over year to $97.7 million, while adjusted EBITDA increased to $12.6 million from $3.6 million. Gross margin expanded to 36.1% from 30%. Subscriber count declined despite stronger engagement: Ending active subscribers fell 3.8% to 140,826 as pauses increased and promotions were reduced, though outfit-generation tools achieved 35% app engagement and boosted bag additions during testing. Focus on core operations and funding: Rent the Runway paused its marketplace, advertising monetization and new dry-cleaning initiatives, announced a $15 million rights offering and secured a $10 million term loan. Fiscal 2026 guidance was reaffirmed, but third-quarter revenue is expected to be flat to up 3% year over year. 3 High-Risk, High-Reward Micro-Cap Stocks You Shouldn't Ignore Rent the Runway (NASDAQ:RENT) reported record second-quarter revenue and expanded profitability as the fashion rental platform emphasized its core rental, resale and customer-experience initiatives while pausing several noncore pilots. The company generated $97.7 million in second-quarter revenue, up 20.8% from a year earlier and 8.7% sequentially. Interim CFO and Treasurer Dave Loretta said the result represented an all-time revenue record for the company, supported by higher revenue per subscriber, increased add-on bookings and the effect of subscription price increases implemented in August 2025. → 3 Lesser-Known Quantum Plays the Market May Be Overlooking Right Now Analysts See 180% Upside for Rent the Runway: Should You Buy? Rent the Runway also announced a leadership transition. Paige Thomas will become chief executive officer, president and a board member effective Sept. 14. Thomas joined the company in June 2026 as chief commercial officer and previously held leadership positions at Signet Jewelers, Saks OFF 5TH and Nordstrom. Interim CEO Teri Bariquit will become non-executive chair of the board on Sept. 14. “The strategy is set, the team is in place, and the work is underway,” Bariquit said. → Qualcomm’s Data Center Bet Looks More Real After Amazon’s AI Deal Rental revenue increased $14.6 million, or 21% year over year, during the quarter. Loretta attributed the increase primarily to higher average revenue per subscriber and a greater volume of add-on bookings, partly offset by lower Reserve revenue compared with the prior-year period. Other revenue, which includes resale, rose $2.2 million, or 18.8%, from the second quarter of 2025. Loretta said resale revenue grew significantly and described the category as a substantial growth opportunity, citing demand for resale apparel and the company’s ability to create room for new inventory while improving gross margins. → Defense, Solar, and Refining Stocks Split as the Iran Conflict Raises Energy Risk Gross profit margin rose to 36.1% from 30% a year earlier, a 609-basis-point increase. The company said the improvement reflected lower rental product depreciation and revenue-share costs as a percentage of revenue, along with better fulfillment-cost leverage. Fulfillment costs were $23.5 million, compared with $22.5 million a year earlier. Fulfillment costs declined to 24.1% of revenue from 27.8% of revenue. Operating expenses fell 2% year over year, driven by lower general and administrative expenses. Total operating expenses represented 42% of revenue, compared with 51.7% in the prior-year quarter. Adjusted EBITDA increased to $12.6 million, or 12.9% of revenue, from $3.6 million, or 4.4% of revenue. Year-to-date free cash flow was negative $21.6 million, improving from negative $32.9 million in the comparable 2025 period. The company said the improvement was driven by lower inventory-related capital expenditures and increased operating income, partially offset by reduced working-capital benefits. Rent the Runway ended the quarter with 140,826 active subscribers, down 3.8% from a year earlier. Average active subscribers increased 1% to 148,259 during the quarter. Loretta said the decline in ending active subscribers was primarily tied to a higher rate of subscription pauses and fewer subscriber acquisitions compared with the prior year, when the company used stronger promotional activity. The company has reduced promotional activity this year as it seeks to attract customers it believes will be profitable. The company is focusing its operating strategy on customer growth, profit expansion and operational execution. Bariquit said the company is seeking to improve merchandise availability, product discovery and reliability in fulfillment, including ensuring garments arrive clean, on time and in expected condition. During the quarter, Rent the Runway expanded its beach-coverup offering from 12 brand partners to 25, increasing the category by 75% from the prior year. It also added brands including Line + Dot and Jenni Kayne, while refreshed Marimekko prints generated above-average utilization, according to Bariquit. The company also continued to invest in product-discovery tools. Its outfit-generation feature, piloted in May and rolled out to all customers by the end of June, has produced 35% engagement in the company’s app. During the pilot, customers who received the outfit experience added products to their bags 12% more often than those who did not, Bariquit said. Rent the Runway launched avatars within the outfit experience in August and began piloting virtual try-on capabilities. Over the past five months, the company has also introduced personalized carousels and updated imagery. Bariquit said Rent the Runway paused its marketplace initiative, on-site advertising and monetization efforts, and the pursuit of new business-to-business dry-cleaning partners. The company will continue serving its existing dry-cleaning partner. The decisions are intended to concentrate resources on improving rental and selling execution, Bariquit said. The marketplace could become meaningful in the future once its experience is fully integrated, she added. The company also announced plans for a $15 million rights offering to holders of its Class A common stock. The offering will be backstopped by Story3 Capital Partners, Nexus Capital Management and Ares Principal Strategies, which led the company’s prior recapitalization. Separately, the company’s liquidity position was strengthened by a $10 million term loan under an amendment to its credit agreement, Loretta said. Rent the Runway reiterated its outlook for double-digit revenue growth for fiscal 2026 and adjusted EBITDA of 4% to 7% of revenue. The company also said it expects free cash flow to improve from 2025 levels. For the third quarter, the company forecast revenue of $87 million to $90 million, representing growth ranging from flat to 3% from the year-earlier period. Rent the Runway expects active subscribers to be roughly flat in the second half of 2026, while resale revenue and Reserve orders are expected to grow. The company projected third-quarter adjusted EBITDA of negative 3% to negative 6% of revenue, citing seasonal increases in subscription pauses and the expected product-cost effect of receiving more revenue-share inventory during the period. Rent the Runway raised its expected fiscal 2026 rental product investment range to $53 million to $55 million from prior guidance of $45 million to $50 million. The outlook remains below the $75 million invested in fiscal 2025 and reflects plans to maintain flexibility in inventory sourcing while increasing stock for fall events and new product launches. Rent the Runway (NASDAQ: RENT) operates an online marketplace and subscription service that provides designer apparel and accessory rentals to consumers. The company offers both one-time rentals and tiered subscription plans, enabling members to borrow items on a recurring basis rather than purchasing them outright. Rent the Runway's inventory spans a wide range of brands and styles, including evening gowns, everyday wear, handbags and jewelry, positioning the company within the broader sharing-economy and circular-fashion movements. Founded in 2009 by Jennifer Hyman and Jennifer Fleiss, Rent the Runway was built on the premise of making high-end fashion more accessible and sustainable. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Rent the Runway Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Image source: The Motley Fool. Wednesday, June 3, 2026 at 8:30 a.m. ET Interim CEO and President — Teri Bariquit Chief Financial Officer — Sid Thacker Teri Bariquit: Thank you, Cara, and thank you all for joining today. I want to take a moment to acknowledge what a meaningful and full few weeks it's been at Rent the Runway. As many of you know, Jennifer Hyman, our Co-Founder and long-term CEO, stepped down from her role in mid-May after 18 years leading the company. I want to thank Jen on behalf of the Board, our team and everyone on this call. Jen took a bold idea and built it into a category-defining platform that has fundamentally changed how women get dressed and experience fashion. She will remain an adviser to the company through January of '27 to support a smooth transition. Stepping into the Interim CEO and President's role at this moment in Rent the Runway's story is truly an honor. For those of you I haven't had a chance to meet yet, I'd like to take a few minutes to introduce a little more about myself. I joined Rent the Runway's Board of Directors in October of last year and I stepped into the Interim CEO and President role following Jen's departure on May 15. Before joining the Board, I spent 37 years at Nordstrom, most recently as Chief Merchandising Officer, where I led more than 1,200 people across buying, planning, product development and inventory management. As part of the executive team at Nordstrom, I collaborated and worked with supply chain, technology, finance, marketing, human resources, legal, along with Nordstrom and Nordstrom Rack stores and online to deliver the best customer experience and offer. During my career, my work is centered on 3 things: understanding how customer needs are changing, building durable partnerships with brands, and leading the kind of operational transformations that allow a business to evolve and grow. I plan to bring all 3 of those focuses to my work at Rent the Runway. I've admired Rent the Runway for a long time now. First, as a retail partner at Nordstrom. Then as a customer who fell in love with what the company makes possible for women. And most recently, as a Board member, working closely with the full Board, Jen and the senior leadership team. I know the strategy, I know the team and I have confidence in where this company is headed. I want to underscore my conviction in our core business strategy and in the health of this business. After nearly 40 years in retail, I know that the foundation of any great retail business is the same: putting the customer at the center of everything we do, surrounded by the right products and brands, in the right quantities, easily found by the customers. The inventory transformation this team executed in 2025 was a bold, well-placed bet on exactly that principle, and the results are now showing up across the business. I firmly believe that Rent the Runway is operating from a strong foundation. We had a great first quarter, fiscal year '26, where we grew revenue and made progress against our goal to diversify revenue streams. The numbers this quarter show that our strategy is working. Total revenue was $90 million, growing nearly 30% year-over-year and beating guidance of $85 million to $87 million. We also continue to see strong growth in our add-on business, with add-on revenue growing 70% year-over-year and 11% versus prior quarter. This is driven primarily by increasing our percentage of subscribers engaging with our add-on products feature. This signals to us that our customer is loving the assortment and that the membership flexibility we are offering is working. Spending time with the team over the past several weeks has reinforced what I observed from my Board seat. The customer acceptance and the merchandising muscles are real. Partnerships with brands our customers love continue to deepen and our assortment is doing what we wanted to do, drawing customers in and keeping them engaged. The Right Brands, Right Quantities is working. Where I see the most opportunity ahead is on that third leg of the triad: making this inventory even easier for her to find. As you heard last quarter, 2026 is about discovery. In particular, we are focused on deploying AI to develop -- deliver the closet of our customer's dreams with more choice and more flexibility. We've made some meaningful progress on that promise. In April, we launched personalized carousel across our platform, now live for all subscribers. She can now discover items similar to her recent favorites and explore a curated For You feed designed around her unique taste. The goal is simple: save her time and make every visit feel tailored to her. Impact of these improvements are an 11% increase in hearting behavior for active subscribers. In May, we innovated with AI imagery to update outdated inventory to more relatable true-to-life visuals that help her picture herself in the item. This increased the views on these tried and true styles by 129%. Also in May, we began internal testing of outfit generation. This allows us to suggest complete looks rather than individual items. We expect this to roll out in the coming months and believe it will meaningfully change how she discovers and rents on Rent the Runway. A healthy core makes new growth possible. From this position of strength, I want to share my excitement around new revenue streams. We have set an early-stage -- a set of early-stage growth initiatives: our online marketplace, our advertising and media platform and our B2B business. These have real room to scale. We made measurable progress this quarter on several of these initiatives. Last quarter, we launched a pilot of the RTR Marketplace with a small subset of our most loyal subscribers. Based on what we learned, we expanded access in April, and the Rent the Runway Marketplace is now live to our customers directly from our home page. While this initiative remains nascent and small from a revenue perspective, the early signal is encouraging. Our near-term focus is on integrating it with the core rental experience to make it seamless for a subscriber to complete her look in a single transaction. In our advertising and media business, we are seeing meaningful momentum and interest from major partners. Looking at it with fresh eyes, what excites me is the dual nature of the opportunity: media revenue from brands that recognize the purchasing power and life stage relevance of the RTR customer and a uniquely efficient new channel for subscriber acquisition. We see meaningful room to scale both sides of that equation over time. And in terms of B2B opportunities, we launched a B2B dry cleaning service pilot in Q1. We've made the underlying tech investments needed to support scaling. And over time, we believe our logistics infrastructure can be a meaningful stand-alone revenue stream. Again, these are just a few of the early initiatives we are exploring. To help with further commercialization and revenue generation, I am pleased to share new senior leadership appointments. First, I'm pleased to welcome Paige Thomas, a 25-plus-year retail veteran, who is joining RTR as our Chief Commercial Officer. Paige's first day was June 1. Second, I'd like to introduce Dave Loretta, our Interim CFO. Paige has one of the strongest track records in the industry and is someone I've known and admired for years. Most recently, Paige served as Chief Merchant and Product Innovation Officer at Signet Jewelers, where she led the merchandising strategy, global sourcing, new product innovation across the enterprise. Prior to Signet, she served as President and CEO of Saks OFF 5TH, leading the business through a major repositioning across stores, digital and brand partnerships. Earlier in her career, Paige spent over a decade at Nordstrom, including 5 years leading and scaling Nordstrom Rack as EVP and General Merchandise Manager. There are a few leaders in retail with Paige's blend of strategic muscle, commercial instinct, operational depth and digital fluency. The fact she's choosing to spend this next chapter with Rent the Runway says something about the moment that we are in. Second, Dave Loretta is joining Rent the Runway as our Interim Chief Financial Officer and Treasurer while we recruit a permanent leader. His first official day will be next Monday, June 8. Dave brings deep financial leadership to RTR. Most recently, he served as CFO of The Honest Company, and before that, he spent 6 years as CFO of Duluth Trading Company, where he led not just finance and accounting, but also inventory planning, strategy and investor relations. Before Duluth, he spent more than a decade at Nordstrom, including roles as President and CFO of Nordstrom Bank and as Corporate Vice President and Treasurer. Dave also ran his own business in the food and beverage industry. That entrepreneurial spirit and instinct combined with his experience filling public companies' finance functions make him uniquely a strong fit for Rent the Runway. As we enter this next chapter, the addition of Paige and Dave further enhances the depth of our leadership bench. In closing, I see a real inflection point at Rent the Runway. The inventory focus of 2025 worked. We're seeing net new opportunities across the business that give me confidence in what lies ahead. And we are building for the future, working to deepen discovery through AI, expanding into exciting new categories and strengthening the relationships we have with both our customers and our brand partners. The growth opportunities in front of us are significant and I could not be more excited for what's to come. As you know, this is his last earnings call with Rent the Runway as CFO. Before I hand it over to Sid, I want to thank him for the impact he's made to improve our financial foundation. He's truly left it better than he found it. Thank you, Sid. With that, I'm handing it to Sid. Sid Thacker: Thanks, Teri, and thank you, everyone, for joining us. I'd like to focus on 3 key topics related to Q1 earnings before providing a more detailed review of results for the quarter. First, I'd like to reiterate the strength of our business in Q1. Second, I want to discuss the deceleration in ending active subscriber growth in the quarter versus prior quarters. Finally, I will address free cash flow for Q1 and why, as evidenced by our adjusted EBITDA and rental product acquired guidance, we continue to expect improved free cash flow for the full fiscal year. Q1 2026 was a strong quarter for Rent the Runway with almost 30% revenue growth versus Q1 2025. We believe subscription revenue growth was excellent and driven by both higher average revenue per subscriber and higher active subscribers. We saw notable strength in customers adding on extra items in their shipments, indicating to us that customers are happier with the inventory investments we have made in fiscal years '25 and '26. We also saw strength in other revenue driven by increases in our retail business. Finally, despite declining year-over-year, our reserve business exhibited improving trends versus the prior quarter. Consistent with the expectations shared in our Q4 earnings call, we saw a deceleration in year-over-year ending active subscriber growth in Q1 '26. As we outlined last quarter, the deceleration is largely a function of the tough comparisons we faced in the first half of fiscal '26 due to normalized marketing spending versus Q4 2025 and due to strong promotional activity last year to get customers excited about the significant increases in inventory. I believe that our underlying business drivers remain strong as evidenced by the double-digit revenue growth guidance for fiscal year 2026. Finally, free cash flow for Q1 '26 was lower than Q1 '25, despite roughly similar levels of adjusted EBITDA and lower inventory-related capital expenditures, due to receipts arriving earlier in the fiscal year, cash interest expense and working capital timing. Our April 2026 debt amendment allows us to pay interest in kind through April 2027. As evidenced by our adjusted EBITDA and rental product acquired guidance for fiscal year 2026, we continue to expect improvements in free cash flow in fiscal year '26 versus fiscal year '25 as timing-related factors become less relevant over the full fiscal year. Let me now review results for the first quarter before turning to Q2 and full year 2026 guidance. We ended Q1 '26 with 155,692 ending active subscribers, up 5.8% year-over-year. Average active subscribers during the quarter were 149,744 subscribers, versus 133,468 subscribers in the prior year, an increase of 12.2% year-over-year. Subscriber growth was driven primarily by a higher base of active subscribers at the end of Q4 '25 versus Q4 '24 and higher subscriber acquisitions in Q1 '26 versus Q1 '25, partially offset by higher additions to the paused subscriber base year-over-year. Ending active subscribers increased 8.3% from 143,796 subscribers in Q4 '25, primarily due to seasonal factors. Total revenue for the quarter was $89.9 million, up $20.3 million or 29.2% year-over-year and down $1.8 million or 2% quarter-over-quarter. Subscription and reserve rental revenue was up $15.7 million or 25.3% year-over-year in Q1 '26, primarily due to higher average subscribers and higher average revenue per subscriber due to the subscription price increase effective August 1, partially offset by lower reserve revenue versus Q1 '25. Other revenue increased $4.6 million or 60.5% year-over-year, primarily due to significantly higher retail revenue. Fulfillment costs were $23.6 million in Q1 '26, versus $20.4 million in Q1 '25 and $21.6 million in Q4 '25. Fulfillment costs as a percentage of revenue were 26.2% of revenue in Q1 '26, compared to 29.4% of revenue in Q1 '25. Fulfillment costs declined as a percentage of revenue, primarily due to higher revenue per order driven by an August price increase and higher retail revenue, partially offset by higher transportation costs as a result of carrier rate increases, higher fuel surcharges and higher warehouse processing costs. Gross margins were 25.9% in Q1 '26, versus 31.5% in Q1 '25. Q1 '26 gross margins reflect higher revenue share costs as a percentage of revenue due to higher share by RTR inventory levels, partially offset by lower rental product depreciation and write-off costs and lower fulfillment cost as a percentage of revenue. Q1 '26 gross margins decreased quarter-over-quarter from 38.6% in Q4 '25, primarily due to higher fixed revenue share costs as a percentage of revenue on account of seasonally higher receipts of share by RTR inventory and the impact of lower revenue per order on fulfillment expenses as a percentage of revenue. Q1 '26 operating expenses were 4.9% higher year-over-year due primarily to higher G&A expenses. Total operating expenses, which include technology, marketing and G&A, were 45.4% of revenue in Q1 '26 versus 55.9% of revenue in Q1 '25. Adjusted EBITDA for Q1 '26 was negative $0.8 million or negative 0.9% of revenue, versus negative $1.3 million or negative 1.9% of revenue in Q1 '25. The increase in adjusted EBITDA as a percentage of revenue versus the prior year is primarily a result of lower operating expenses as a percentage of revenue and lower fulfillment expenses as a percentage of revenue, partially offset by higher revenue share expenses as a percentage of revenue due to greater share by RTR inventory levels. Free cash flow for Q1 '26 was negative $13.6 million, versus negative $6.4 million in Q1 '25. Free cash flow decreased versus the prior year primarily due to increased cash used in working capital, driven by timing of payments and higher cash interest expense in Q1 '26 versus Q1 '25, partially offset by lower inventory-related capital expenditures. I will now discuss guidance for Q2 2026 and fiscal year 2026. We are reiterating our double-digit revenue growth guidance for fiscal year '26 versus fiscal year '25. We believe the business is off to a strong start in Q1 '26, building confidence in revenue guidance for the year. We are also reiterating our adjusted EBITDA guidance of 4% to 7% of revenue for fiscal year '26. We also continue to expect rental product acquired to be between $45 million and $50 million in fiscal year 2026. For Q2, we expect revenue to be between $91 million and $95 million, representing growth of between 12% and 17% versus Q2 '25. Note that our guidance range reflects our decision to preserve inventory for our rental business and the significant increase in our retail business that we saw in Q2 '25. It also assumes a continued decline in the reserve business, our expectations around the timing of subscriber growth and uncertainty around customer reaction to passing along fuel surcharges this fiscal year. We expect Q2 adjusted EBITDA to be between 5% and 8% of revenue. Finally, I would emphasize that the macroeconomic and geopolitical environment remains highly uncertain, with potential impacts on transportation costs, fuel surcharges and consumer confidence. Our guidance is based on current conditions and assumptions and does not contemplate material deterioration, including from our decision to pass on fuel surcharges to customers or volatility in these factors. Accordingly, actual results may differ materially if such conditions change. Before concluding, I'd like to take a personal moment. As you know, this will be my last earnings call as CFO of Rent the Runway. I believe that Rent the Runway's business is the strongest it's been since I joined the company in mid-2022. I believe that our customers are happier, our growth is solid, expected free cash flow trends continue to improve, and we have a markedly better balance sheet. I want to thank our shareholders for the trust you've extended to me over the years. I also want to thank Jen, Teri, and our past and current Board of Directors for their support. It has been a privilege to represent this country -- company. I'm excited about Rent the Runway's return to growth and wish the team the very best going forward. Thank you. Operator? Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Rent the Runway (RENT) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth of nearly 30% year-over-year was driven by a higher active subscriber base and increased average revenue per subscriber following an August price increase. The 'Right Brands, Right Quantities' inventory strategy executed in 2025 is yielding results, evidenced by a 70% year-over-year increase in add-on revenue as subscribers engage more with extra items. Management is pivoting the 2026 strategy toward 'discovery,' utilizing AI to personalize the customer experience through curated feeds and outfit generation to reduce search time. Operational improvements in AI-generated imagery for older inventory led to a 129% increase in views for those styles, helping customers better visualize products. The company is aggressively diversifying revenue through nascent initiatives including an online marketplace, an advertising and media platform, and a B2B dry cleaning service pilot. A leadership transition is underway with Teri Bariquit serving as Interim CEO following Co-Founder Jennifer Hyman's departure, supported by new senior appointments in commercial and financial roles. Full-year 2026 guidance anticipates double-digit revenue growth and adjusted EBITDA margins between 4% and 7%, supported by strong Q1 performance. Q2 revenue is projected between $91 million and $95 million, assuming a continued decline in the reserve business and uncertainty regarding customer reactions to fuel surcharge pass-throughs. Management expects free cash flow to improve over the full fiscal year as timing-related working capital factors and early inventory receipts become less relevant. The company plans to roll out automated outfit generation in the coming months to transition from individual item discovery to complete look suggestions. Guidance assumes current macroeconomic conditions remain stable but flags potential volatility in transportation costs and consumer confidence as key risks. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. A debt amendment finalized in April 2026 allows the company to pay interest in kind through April 2027, providing near-term cash flow flexibility. Gross margins decreased to 25.9% from 31.5% year-over-year, primarily due to higher revenue share costs associated with increased 'Share by RTR' inventory levels. Ending active subscriber growth decelerated to 5.8% year-over-year, which management attributed to tough comparisons against high promotional activity in the prior year. Higher transportation costs, driven by carrier rate increases and fuel surcharges, acted as a headwind to fulfillment efficiency during the quarter.

Revenue Grew to $89.9M, up 29.2% YoY, add-on revenue increased 70.4% YoY Reaffirms FY26 Guidance for Revenue, Adjusted EBITDA and Rental Product Acquired Welcomes Teri Bariquit as Interim CEO and President, Paige Thomas as Chief Commercial Officer, and Dave Loretta as Interim CFO NEW YORK, June 03, 2026 (GLOBE NEWSWIRE) -- Rent the Runway, Inc. (“Rent the Runway” or "RTR") (NASDAQ: RENT), the company transforming the way women get dressed, today reported financial results for the fiscal quarter ended April 30, 2026. First quarter results demonstrate continued momentum across the business, with total revenue of $89.9 million exceeding guidance and up 29.2% YoY. EBITDA margin also surpassed expectations. We also continued to see significant growth in our add-on business, with add-on revenue increasing 70.4% year-over-year and 11.0% quarter-over-quarter in Q1, driven primarily by higher subscriber engagement following a large inventory infusion and multiple product enhancements launched last year. The company’s focus in 2026 remains on Discovery, and it is continuing to deploy AI-driven experiences designed to deliver the closet of her dreams with more choice, personalization, and flexibility than ever before. Rent the Runway also announced recently that Teri Bariquit has been appointed Interim CEO and President, succeeding Co-Founder Jennifer Hyman, who stepped down after 18 years of category-defining leadership. Ms. Hyman will remain an advisor to the company through January 2027 to ensure a seamless transition. Ms. Bariquit brings 37 years of retail and merchandising leadership to the role, most recently serving as Chief Merchandising Officer at Nordstrom, where she led more than 1,200 team members across Buying, Planning, Product Development, and Inventory Management. She joined Rent the Runway's Board of Directors in October 2025 and will continue to work closely with Executive Chairman Dhiren Fonseca and the Senior Leadership Team to advance the company's strategy, while the Board is actively conducting a search for a permanent CEO. Alongside Ms. Bariquit, the company also welcomed Paige Thomas as Chief Commercial Officer and named Dave Loretta as interim CFO. Ms. Thomas, a 25+ year retail veteran, spent over a decade at Nordstrom and most recently served as Chief Merchant & Product Innovation Officer at Signet Jeweler. Mr. Loretta most recently served as CFO of The Honest Company and prior to that as CFO of Duluth Trading Company. He also brings over a decade of experience at Nordstrom, including as President and CFO of Nordstrom Bank. "Rent the Runway is operating from a solid foundation, supported by a strong core business, a renewed capital structure aligned with our long-term ambitions, and diversified set of revenue streams,” said Teri Bariquit, Interim CEO and President of Rent the Runway. "I'm honored to step into this leadership role at such an exciting moment. The team has built remarkable momentum, and this quarter's results reflect the strength of a strategy that is clearly resonating with our customers.” Recent Business Highlights Expanded Personalized Discovery Across the RTR Platform: In April 2026, we launched personalized carousels across our platform, now live for all subscribers. Customers can now discover items similar to their recent favorites and explore a curated “For You” feed tailored to their individual style preferences. These enhancements are designed to reduce friction in discovery, save her time, and make every visit feel more personalized, and we are seeing a 11% increase in hearting behavior on the home page for active subscribers. Enhanced Visual Experience with AI-Driven Imagery: In April 2026, we significantly improved imagery across our platform by moving away from outdated visuals and introducing more relatable, true-to-life imagery designed to help customers better envision themselves wearing each item. These updates are intended to improve engagement, product discovery, and rental confidence across the customer journey, and increased views on these tried and true styles by 129%. Advancing AI-Powered Outfit Discovery: In May 2026, we began internal testing of outfit generation capabilities, enabling RTR to recommend complete looks rather than individual items. We expect to roll out this functionality to subscribers in the coming months and believe it has the potential to meaningfully transform how customers discover and rent on RTR. Continued Progress Across New Revenue Stream Initiatives: We continue to advance a set of early-stage growth initiatives across our online marketplace, advertising and media platform, and B2B business. Across each initiative introduced last quarter, we have moved from pilot programs to early operational progress and revenue generation. "Q1 2026 was a strong start to fiscal year 2026, with revenue growth of 29.2% and continued evidence that our inventory investments are resonating with customers," said Sid Thacker, Chief Financial Officer of Rent the Runway. "With our underlying business drivers intact, we reaffirm our Revenue, Adjusted EBITDA, and Rental Product Acquired guidance for fiscal year 2026." First Quarter 2026 Key Metrics and Financial Highlights Revenue was $89.9 million, a 29.2% increase year-over-year from $69.6 million in the first quarter of fiscal year 2025. 155,692 ending Active Subscribers, representing an increase of 5.8% from 147,157 at the end of the first quarter of fiscal year 2025. 149,744 Average Active Subscribers, representing an increase of 12.2% from 133,468 at the end of the first quarter of fiscal year 2025. 196,147 ending Total Subscribers, representing an increase of 7.6% from 182,209 at the end of the first quarter of fiscal year 2025. Gross Profit was $23.3 million, representing a change of 6.4% from $21.9 million in the first quarter of fiscal year 2025. Gross Margin was 25.9%, as compared to 31.5% in the first quarter of fiscal year 2025. Net Loss was $(18.9) million, as compared to $(26.1) million in the first quarter of fiscal year 2025. Net Loss as a percentage of revenue was (21.0)%, as compared to (37.5)% in the first quarter of fiscal year 2025. Adjusted EBITDA was $(0.8) million, as compared to $(1.3) million in the first quarter of fiscal year 2025. Adjusted EBITDA Margin was (0.9)%, as compared to (1.9)% in the first quarter of fiscal year 2025. Net cash (used in) provided by operating activities was $(3.8) million, as compared to $8.3 million in the first quarter of fiscal year 2025. Net cash (used in) provided by operating activities as a percentage of revenue was (4.2)%, as compared to 11.9% in the first quarter of fiscal year 2025. Net cash used in investing activities was $(9.8) million, as compared to $(14.7) million in the first quarter of fiscal year 2025. Net cash used in investing activities as a percentage of revenue was (10.9)%, as compared to (21.1)% in the first quarter of fiscal year 2025. Cash and Cash Equivalents was $37.1 million, as compared to $70.4 million in the first quarter of fiscal year 2025. Outlook For the fiscal second quarter of 2026, Rent the Runway expects: Revenue of between $91 million and $95 million Adjusted EBITDA Margin1 of between 5% and 8% For fiscal year 2026, Rent the Runway continues to expect: Double-Digit Revenue Growth versus fiscal year 2025, led primarily by continued product and inventory experience improvements. Adjusted EBITDA Margin2 of between 4% and 7% Rental Product Acquired3 of between $45 million and $50 million versus $74.9 million in fiscal year 2025. There are unknowns around the economy, such as fuel surcharges, tariffs, and other macroeconomic developments, which are not incorporated into our expectations and that can materially affect actual results for fiscal year 2026 versus our current expectations. Our outlook is based on current conditions and assumptions and does not contemplate material deterioration, including volatility in these factors or from our decision to pass on fuel surcharges to customers; accordingly, actual results may differ materially if such conditions change. _______________________1 Represents a non-GAAP financial measure. As more fully described in the Non-GAAP Financial Measures section of this release, a reconciliation of Adjusted EBITDA Margin for the second quarter of fiscal year 2026 is not available without unreasonable efforts.2 Represents a non-GAAP financial measure. As more fully described in the Non-GAAP Financial Measures section of this release, a reconciliation of Adjusted EBITDA Margin for fiscal year 2026 is not available without unreasonable efforts.3 Purchases of Rental Product as presented on the Consolidated Statement of Cash Flows may vary from Rental Product Acquired due to timing of payments for rental product. Rental Product Acquired reflects the cost of owned rental product received in the period. Earnings Presentation, Conference Call and Webcast The first quarter 2026 Earnings Presentation is now accessible through the Investor Relations section of Rent the Runway’s website at https://investors.renttherunway.com/ under the “Presentations” section. Rent the Runway will host a conference call and webcast to discuss its first quarter 2026 financial results and provide a business update today, June 3, 2026 at 8:30 am ET. The financial results and live webcast will be accessible through the Investor Relations section of Rent the Runway’s website at https://investors.renttherunway.com/ under the “Events” section. To access the call through a conference line, dial 1-877-407-3982 (in the U.S.) or 1-201-493-6780 (international callers). A replay of the conference call will be posted shortly after the call and will be available for at least fourteen days. To access the replay, dial 1-844-512-2921 (in the U.S.) or 1-412-317-6671 (international callers). The access code for the replay is 13760590. About Rent the Runway, Inc. Founded in 2009, Rent the Runway is disrupting the trillion-dollar fashion industry and changing the way women get dressed through the Closet in the Cloud. RTR’s mission has remained the same since its founding: powering women to feel their best every day. Through RTR, customers can subscribe, rent items a-la-carte and shop resale from hundreds of designer brands. The Closet in the Cloud offers a wide assortment of millions of items for every occasion, from evening wear and accessories to ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear and ski wear. RTR has built a two-sided discovery engine, which connects deeply engaged customers and differentiated brand partners on a powerful platform built around its brand, data, logistics and technology. RTR has been named to CNBC’s “Disruptor 50” five times in ten years, and has been placed on Fast Company’s Most Innovative Companies list four times. Forward-Looking Statements: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. These statements include, but are not limited to, guidance and underlying assumptions for the second fiscal quarter of 2026 and the fiscal year 2026, and statements regarding the anticipated benefits of the recapitalization transactions, the impact of potential product and customer experience improvements, the impact and volume of our new inventory, the success of our AI investments and initiatives, the success of our marketing plans, and our position for sustained growth. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements because they contain words such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” or “would,” or the negative of these words or other similar terms or expressions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are based on information available at the time those statements are made and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management as of that time with respect to future events. These statements are subject to risks and uncertainties, many of which involve factors or circumstances that are beyond our control, that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. These risks and uncertainties include our ability to drive future growth or manage our growth effectively; the highly competitive and rapidly changing nature of the global fashion industry; risks related to the macroeconomic environment, including war in the Middle East and fuel surcharges; changes in global trade policies, tariffs, and other measures that could restrict international trade; our ability to cost-effectively grow our customer base; any failure to attract or retain customers; our ability to accurately forecast customer demand, acquire and manage our offerings effectively and plan for future expenses; risks arising from the restructuring of our operations; our reliance on the effective operation of proprietary technology systems and software as well as those of third-party vendors and service providers; risks related to shipping, logistics and our supply chain; risks related to AI technology; our failure to successfully recruit a permanent CEO and CFO and manage these leadership transitions; our failure to realize all of the anticipated benefits of the recapitalization transactions, or that those benefits may be short-lived or insufficient for our future needs; failure to manage the transition of our Board of Directors; our failure to comply with the covenants under our credit agreement; our ability to remediate our material weaknesses in our internal control over financial reporting; our ability to comply with laws and regulations applicable to our business; our reliance on the experience and expertise of our senior management and other key personnel; our ability to adequately obtain, maintain, protect and enforce our intellectual property and proprietary rights; compliance with data privacy, data security, data protection and consumer protection laws and industry standards; risks associated with our brand and manufacturing partners; our reliance on third parties to provide payment processing infrastructure underlying our business; our dependence on online sources to attract consumers and promote our business which may be affected by third-party interference or cause our customer acquisition costs to rise; failure by us, our brand partners, or third party manufacturers to comply with our vendor code of conduct or other laws; risks related to our debt; our noncompliance with Nasdaq Marketplace Rule 5606(c)(2)(A), which requires listed companies to have at least three audit committee members; and risks related to our Class A capital stock and ownership structure. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the expectations is included in our Annual Report on Form 10-K for the year ended January 31, 2026, as will be updated in our Quarterly Report on Form 10-Q for the quarter ended April 30, 2026. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise. Key Business and Financial Metrics Active Subscribers is defined as the number of subscribers with an active membership as of the last day of any given period and excludes paused subscribers. Total Subscribers represents the number of subscribers with an active or paused membership as of the last day of the period and excludes subscribers who had an active or paused subscription during the period, but ended their subscription prior to the last day of the fiscal period. Average Active Subscribers is defined as the mean of the beginning of quarter and end of quarter Active Subscribers for a quarterly period; and for other periods, represents the mean of the Average Active Subscribers of every quarter within that period. Gross Profit is defined as total revenue less costs related to activities to fulfill customer orders and rental product acquisition costs, presented as fulfillment and rental product depreciation and revenue share, respectively, on the consolidated statement of operations. We depreciate owned apparel assets over three years and owned accessory assets over two years, net of 20% and 30% salvage values, respectively, and recognize the depreciation on a straight-line basis and remaining cost of items when sold or retired on our consolidated statement of operations. Rental product depreciation expense is time-based and reflects all rental product items we own. We use Gross Profit and Gross Profit as a percentage of revenue, or Gross Margin, to measure the continued efficiency of our business after the cost of our products and fulfillment costs are included. Non-GAAP Financial Measures This press release and the accompanying tables contain the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA margin, free cash flow, and free cash flow margin. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA and Adjusted EBITDA margin are useful in evaluating our performance and free cash flow and free cash flow margin are useful in evaluating our performance and liquidity. Adjusted EBITDA is a key performance measure used by management to assess our operating performance and the operating leverage of our business prior to capital expenditures. These non-GAAP financial metrics are not meant to be considered as indicators of our financial performance in isolation from or as a substitute for our financial information prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. There are limitations to the use of the non-GAAP financial metrics presented in this press release. For example, our non-GAAP financial metrics may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial metrics differently than we do, limiting the usefulness of those measures for comparative purposes. We define Adjusted EBITDA as net loss, adjusted to exclude interest expense, rental product depreciation, other depreciation and amortization, share-based compensation expense, write-off of liquidated assets, non-recurring adjustments, non-ordinary course legal fees, income tax (benefit) expense, other income and expense, and other gains / losses. Adjusted EBITDA margin is defined as Adjusted EBITDA calculated as a percentage of total revenue, net for a period. We define free cash flow as net cash used in operating activities and net cash used in investing activities on a combined basis. Free cash flow margin is defined as free cash flow as a percentage of revenue. The reconciliation of presented non-GAAP financial metrics to the most directly comparable GAAP financial measure is presented below. We encourage reviewing the reconciliation in conjunction with the presentation of the non-GAAP financial metrics for each of the periods presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items, and may include other expenses, costs and non-recurring items. Reconciliations of Adjusted EBITDA margin expectations for fiscal year 2026 and Q2 2026 to the most directly comparable GAAP measures are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to the charges excluded from these non-GAAP measures, in particular, share-based compensation expense, and non-recurring expenses, which can have unpredictable fluctuations based on unforeseen activity that is out of our control and/or cannot reasonably be predicted. Investor ContactInvestor Relations [email protected] Media [email protected]

This article first appeared on GuruFocus. Release Date: June 03, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Rent the Runway Inc (NASDAQ:RENT) reported a strong first quarter with a 30% year-over-year revenue growth, reaching $90 million, surpassing guidance. The company saw a 70% year-over-year growth in add-on revenue, indicating strong customer engagement with additional product features. The introduction of AI-driven personalized carousels and outfit generation is enhancing customer experience and increasing engagement. New revenue streams, such as the RTR Marketplace and advertising and media platform, show promising early results and potential for scaling. The appointment of experienced retail leaders Paige Thomas as Chief Commercial Officer and Dave Loretta as Interim CFO strengthens the leadership team. There was a deceleration in ending active subscriber growth compared to previous quarters, attributed to tough comparisons and normalized marketing spending. Free cash flow for Q1 2026 was negative $13.6 million, a decline from the previous year, due to timing of payments and higher cash interest expenses. Gross margins decreased to 25.9% in Q1 2026 from 31.5% in Q1 2025, impacted by higher revenue share costs and lower rental product depreciation. The reserve business continued to decline year-over-year, although it showed improving trends compared to the prior quarter. The macroeconomic and geopolitical environment remains uncertain, posing potential risks to transportation costs, fuel surcharges, and consumer confidence. Warning! GuruFocus has detected 6 Warning Signs with RENT. Is RENT fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the strategic focus for Rent the Runway in 2026 and how AI is being integrated into your operations? A: Teri Bariquit, Interim CEO, highlighted that 2026 is centered on discovery, particularly through AI deployment. The company launched personalized carousels for subscribers, enhancing item discovery and engagement. AI imagery updates have improved inventory visuals, increasing user interaction by 129%. Additionally, outfit generation is being tested to suggest complete looks, aiming to transform customer experience on the platform. Q: What are the key growth initiatives Rent the Runway is pursuing beyond its core rental business? A: Teri Bariquit mentioned several early-stage growth initiatives, including the RTR Marketplace, advertising and media platform, and B2B opportunities. The RTR Marketplace has expanded access and is now live on the homepage. The advertising platform is gaining traction with major partners, offering dual revenue and subscriber acquisition opportunities. A B2B dry cleaning service pilot was also launched, with potential for logistics infrastructure to become a standalone revenue stream. Q: How did Rent the Runway perform financially in Q1 2026, and what are the expectations for the rest of the year? A: Siddharth Thacker, CFO, reported a strong Q1 with nearly 30% revenue growth year-over-year, driven by higher average revenue per subscriber and active subscribers. Despite a deceleration in subscriber growth, the underlying business remains strong. The company expects double-digit revenue growth for fiscal year 2026 and improved free cash flow, supported by adjusted EBITDA guidance of 4% to 7% of revenue. Q: Can you discuss the changes in leadership and how they will impact Rent the Runway's strategy? A: Teri Bariquit announced new senior leadership appointments, including Paige Thomas as Chief Commercial Officer and Dave Loretta as Interim CFO. Paige brings extensive retail experience, having led merchandising strategies at Signet Jeweler and Saks OFF 5TH. Dave, with a strong financial background, will support the company while a permanent CFO is recruited. These appointments are expected to enhance strategic and operational capabilities. Q: What challenges does Rent the Runway anticipate in the current macroeconomic environment, and how is the company addressing them? A: Siddharth Thacker acknowledged the uncertain macroeconomic and geopolitical environment, which could impact transportation costs, fuel surcharges, and consumer confidence. The company's guidance considers these factors, and it plans to pass on fuel surcharges to customers. Despite these challenges, Rent the Runway remains confident in its growth prospects and financial guidance for the year. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Rent the Runway, Inc.? Here are five stocks we like better. Rent the Runway delivered a strong fiscal Q1 2026, with revenue of $89.9 million, up 29.2% year over year and above guidance, driven by higher subscription revenue, add-on purchases and retail growth. The company is undergoing a leadership transition after founder and longtime CEO Jennifer Hyman stepped down, with interim CEO Teri Bariquit emphasizing a focus on customer experience, brand partnerships and operational execution. Rent the Runway also named new senior leaders, including a chief commercial officer and interim CFO. Management reiterated its full-year outlook for double-digit revenue growth and adjusted EBITDA of 4% to 7% of revenue, while highlighting AI-powered discovery tools and new initiatives like a marketplace and B2B services as future growth drivers. 3 High-Risk, High-Reward Micro-Cap Stocks You Shouldn't Ignore Rent the Runway (NASDAQ:RENT) reported sharply higher first-quarter fiscal 2026 revenue and reiterated its full-year outlook, as management pointed to stronger subscriber monetization, growth in add-on items and early progress in new revenue initiatives. The apparel rental company posted total revenue of $89.9 million for the quarter, up 29.2% year over year and above its prior guidance range of $85 million to $87 million. Interim CEO Teri Bariquit said the quarter showed that the company’s strategy is “working,” citing growth in subscription revenue, add-on revenue and emerging business lines. → Palantir’s Drone Tailwind Puts Its Defense AI Story Back in Focus for Investors Analysts See 180% Upside for Rent the Runway: Should You Buy? “We had a great first quarter, fiscal year 2026, where we grew revenue and made progress against our goal to diversify revenue streams,” Bariquit said on the call. The earnings call was the company’s first since co-founder and longtime CEO Jennifer Hyman stepped down in mid-May after 18 years leading Rent the Runway. Bariquit, who joined the board in October and became interim CEO and president following Hyman’s departure on May 15, thanked Hyman and said she will remain an adviser through Jan. 27 to support the transition. → Best Buy’s AI Laptop Boost Sparks Hope for a BBY Turnaround Bariquit also outlined her background, noting she spent 37 years at Nordstrom, most recently as chief merchandising officer. She said her focus at Rent the Runway will center on customer needs, brand partnerships and operational execution. The company also announced new senior leadership appointments. Paige Thomas joined as chief commercial officer on June 1. Bariquit said Thomas previously served as chief merchant and product innovation officer at Signet Jewelers and as president and CEO of Saks OFF 5TH. Dave Loretta is joining as interim chief financial officer and treasurer while the company searches for a permanent CFO. Loretta previously served as CFO of The Honest Company and Duluth Trading Company, according to Bariquit. → 3 Up-and-Coming Stocks That Could Be the Next NVIDIA Outgoing CFO Sid Thacker said the call would be his last as Rent the Runway’s finance chief. “I believe that Rent the Runway’s business is the strongest it’s been since I joined the company in mid 2022,” Thacker said. Thacker said first-quarter results reflected strength across the business, with subscription revenue growth driven by higher average revenue per subscriber and more active subscribers. Subscription and Reserve rental revenue rose 25.3% year over year, primarily due to higher average subscribers and higher average revenue per subscriber following a subscription price increase that took effect Aug. 1. That was partially offset by lower Reserve revenue versus the prior-year period. Other revenue increased 60.5% year over year, primarily due to significantly higher retail revenue. Bariquit said add-on revenue grew 70% year over year and 11% sequentially, driven mainly by a higher percentage of subscribers using the add-on product feature. “This signals to us that our customer is loving the assortment and that the membership flexibility we are offering is working,” Bariquit said. The company ended the quarter with 155,692 active subscribers, up 5.8% year over year. Average active subscribers totaled 149,744, up 12.2% year over year. Thacker said subscriber growth was primarily driven by a higher base of active subscribers exiting the fourth quarter of fiscal 2025 and higher subscriber acquisitions in the first quarter, partially offset by higher additions to the paused subscriber base. However, Thacker noted a deceleration in year-over-year ending active subscriber growth compared with prior quarters. He said the slowdown was expected and largely reflected tougher comparisons in the first half of fiscal 2026 due to normalized marketing spending versus the fourth quarter of fiscal 2025 and strong promotional activity last year tied to significant inventory increases. Fulfillment costs were $23.6 million, compared with $20.4 million a year earlier. As a percentage of revenue, fulfillment costs improved to 26.2% from 29.4% in the prior-year quarter. Thacker attributed the improvement primarily to higher revenue per order, driven by the August price increase and higher retail revenue, partially offset by higher transportation costs, fuel surcharges and warehouse processing costs. Gross margin was 25.9%, down from 31.5% in the prior-year quarter. Thacker said the decline reflected higher revenue share costs as a percentage of revenue due to higher Share by RTR inventory levels, partly offset by lower rental product depreciation and write-off costs and lower fulfillment costs as a percentage of revenue. Adjusted EBITDA was negative $0.8 million, or negative 0.9% of revenue, compared with negative $1.3 million, or negative 1.9% of revenue, in the prior-year quarter. Free cash flow was negative $13.6 million, compared with negative $6.4 million a year earlier. Thacker said the decline was primarily due to working capital timing, timing of payments and higher cash interest expense, partially offset by lower inventory-related capital expenditures. Thacker said the company continues to expect improved free cash flow for the full fiscal year, noting that its April 2026 debt amendment allows it to pay interest in kind through April 2027. Bariquit said Rent the Runway’s 2025 inventory transformation has strengthened the business and that fiscal 2026 is focused on discovery, including the use of artificial intelligence to improve how customers find items. In April, the company launched personalized carousels across its platform for all subscribers, including recommendations based on recent favorites and a curated feed. Bariquit said those improvements drove an 11% increase in hearting behavior among active subscribers. In May, the company used AI imagery to update outdated visuals for certain styles, which Bariquit said increased views on those styles by 129%. The company also began internal testing of outfit generation, which is designed to suggest full looks rather than individual items. Rent the Runway is also pursuing early-stage growth initiatives including an online marketplace, advertising and media, and B2B services. Bariquit said the company expanded access to the Rent the Runway Marketplace in April and that it is now live from the homepage, though it remains small from a revenue standpoint. The company also launched a B2B dry cleaning service pilot in the first quarter and has made technology investments to support scaling. Rent the Runway reiterated its expectation for double-digit revenue growth in fiscal 2026 and adjusted EBITDA of 4% to 7% of revenue. The company also continues to expect rental product acquired to be between $45 million and $50 million for the year. For the second quarter, the company guided for revenue of $91 million to $95 million, representing growth of 12% to 17% versus the prior-year quarter. It expects second-quarter adjusted EBITDA of 5% to 8% of revenue. Thacker said the guidance reflects the company’s decision to preserve inventory for the rental business, the significant increase in retail revenue seen in the prior-year quarter, continued declines in Reserve, expected subscriber growth timing and uncertainty around customer reaction to passing along fuel surcharges. He also cautioned that the macroeconomic and geopolitical environment remains “highly uncertain,” with potential effects on transportation costs, fuel surcharges and consumer confidence. Rent the Runway (NASDAQ: RENT) operates an online marketplace and subscription service that provides designer apparel and accessory rentals to consumers. The company offers both one-time rentals and tiered subscription plans, enabling members to borrow items on a recurring basis rather than purchasing them outright. Rent the Runway's inventory spans a wide range of brands and styles, including evening gowns, everyday wear, handbags and jewelry, positioning the company within the broader sharing-economy and circular-fashion movements. Founded in 2009 by Jennifer Hyman and Jennifer Fleiss, Rent the Runway was built on the premise of making high-end fashion more accessible and sustainable. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Rent the Runway Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for June 2026.