Rent the Runway is still capturing the attention of consumers. Shares of the company soared over 161% on Thursday, trading about $19.38 after it reported better than expected fourth earnings, reaching its highest level since September of last year.
The internet retailer, which rents designer dresses, gowns, and accessories for women, said that customers have been buying and returning more frequently — thanks in part to AI, which the company has dubbed its “premium personal concierge service.” The tool is used to style customers.
Rent the Runway chief executive Jennifer Hyman said that as a result, the platform’s net promotor score (NPS), a metric used to gauge customer loyalty, has reached its highest level in several years. “Customers have been buying more inventory from us, and customer retention has markedly improved year-over-year,” Hyman said.
The e-commerce platform beat Wall Street’s expectations. The company generated $75.8 million during the period. Analysts had forecasted it report $74.5 million, according to Factset estimates. The company, however, reported a wider loss per share than expected of $7.02.
Sid Thacker, Rent the Runway’s CFO, said fiscal 2024 will be a “transformative year,” for the company and that it predicts it will result in “free cash flow breakeven” for the retailer. Moreover, “we believe that the cost and capital expenditure decisions that are important components of our free cash flow breakeven plan have already been made,” he added.
The online platform lifted its fiscal 2024 outlook. It expects revenue growth to be between 1% to 6% during the year, and adjusted EBITDA margin of 15% to 16%.
The company’s optimistic outlook comes months after it received a delisting notice from Nasdaq. In late March, the company said it would move forward with a 1-for-20 reverse stock spilt to regain Nasdaq compliance.