Rent the Runway shares surged 170% on the fashion rental company’s optimistic 2024 outlook.
For fiscal 2024, the company expects to achieve breakeven cashflow on a full-year basis. It guided revenue growth of 1% to 6% over 2023, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 15% to 16%.
Wall Street analysts had been expecting revenue growth of 2.7% to $306.3 million.
For the first quarter, it projected revenue in the range of $73 to $75 million, shy of the consensus estimate of $75.4 million.
Sid Thacker, Rent the Runway’s chief financial officer, believes fiscal 204 will be a “transformative” year for the company.
"Over the past several years, we have reduced fixed costs significantly and made considerable progress towards building a more capital-light model. We expect these actions to result in free cash flow breakeven for fiscal year 2024,” Thacker said.
For the fourth quarter, ended January 31, 2024, Rent the Runway reported a wider-than-expected loss of $7.02 per share, compared to Street estimates of a loss per share of $6.05. It narrowed its net loss from $26.2 million in the year-ago quarter to $24.8 million.
Revenue increased 0.5% year-over-year to $75.8 million, ahead of estimates of $74.1 million.
Shares of Rent the Runway added 170% at about $20 in early trade on Thursday.