Rent the Runway jumps after co raises annual revenue forecast
08/12/2022 12:17
** Shares of clothing rental firm Rent the Runway RENT.O
up 17.7% at $1.60 premarket, stock set to open at near one-month
high
** Co raised full-year 2022 revenue and earnings margin
forecasts, signaling strong demand for affordable fashion amid
decades-high inflation urn:newsml:reuters.com:*:nL4N32X418
** Co also says its restructuring plan, which involved
laying off about 24% of corporate employees, will help it
"significantly" improve cash burn next year in spite of a
challenging macro environment
** RENT stock down ~73% since co announced its restructuring
plan amid slowing revenue on Sept 12 urn:newsml:reuters.com:*:nL4N30J2G5
** Barclays says RENT's customers have gotten comfortable
with co's spring price hikes and the results should give
investors more confidence in co achieving positive free cash
flow
** Still, RENT shares are likely to remain range-bound
while negative cash flow still persists, Barclays adds; cuts
price target on stock by half to $3
** Eight of 11 brokerages rate the stock "buy" or higher,
and three "hold", per Refinitiv data; their median PT is $6
** Up to Wednesday's close, stock down over 83% this year
(Reporting by Uday Sampath in Bengaluru)
((UdaySampath.Kumar@thomsonreuters.com; Twitter: https://twitter.com/sampath_uday
;))