Rent the Runway shares slip 9% after Q1 report, outlook
07/06/2024 18:56
** Shares in clothing rental service Rent the Runway Inc
RENT.O down 10.5% on Friday, on track to break 3-session
streak of gains after reporting quarterly results and guidance
late Thursday
** Jefferies raised its price target to $34 from $21 after
the report, one of just three firms covering the stock, per LSEG
data.
** RENT shares rose in late trade Thursday but reversed by
the regular session, stock last traded at $24 after earlier
hitting a session low of $23 following it $26.81 close before
the results Thursday
** The company, whose demand suffered due to COVID, said it
would re-open flagship NYC store this summer after successful
events in NYC and in Atlanta; CEO Jennifer Hyman said in recent
conference call she does not believe a fashion brand "can grow
on digital alone"
** But Kim Forrest, chief investment officer at Bokeh
Capital Partners in Pittsburgh cautioned "stores are uncertain
and costly" and that big occasions like proms and weddings where
formal wear is needed aren't expanding. "It's a limited market
and there's growing competition," she said
** RENT reported Q1 rev rose to $75 mln from $74.2 mln in
the year-ago quarter while net loss per share narrowed to $6.03
from $9.14 in Q1 2023
** RENT sees Q2 revenue between $76 million and $78 million
and adjusted EBITDA margin between 14% to 15%
** Guidance for full year kept at y/y rev growth of 1% to
6%, an adj EBITDA margin of 15% to 16% and free cash flow
break-even on an FY basis
(Reporting By Sinéad Carew)
((sinead.carew@thomsonreuters.com; +13322191897;))