The CEO of Rent the Runway views inflation as a benefit for the company.

• On Wednesday, Run the Runway reported ahead of analysts' estimates for fiscal fourth-quarter revenue and a narrower-than-expected loss.
• Rent the Runway is experiencing growth due to consumers' desire for affordability and security amid inflation, as stated by Jennifer Hyman, CEO.
• The CEO of Rent the Runway stated on CNBC that the current rental market presents a highly favorable environment for their business, citing inflation as a key factor that provides a competitive advantage.

The company views the more than 2 million weddings scheduled for this year, along with the associated events, as a significant advantage for its operations.

Jennifer Hyman, co-founder and CEO of Rent the Runway, stated that the company is experiencing growth due to consumers' desire for value and stability during inflation. With rising gas prices, grocery bills, and clothing costs, Americans are turning to Rent the Runway for affordable and sustainable fashion options.

Rent the Runway is planning to increase the prices of its membership plans in early May to combat its rising expenses.

Rent the Runway has a competitive advantage in the current inflationary environment, according to Hyman in a Zoom interview.

The fashion rental platform exceeded analysts' revenue estimates and reported a narrower-than-expected loss in the fiscal fourth quarter, as consumers turned to the platform to update their wardrobes for hybrid work schedules and upcoming spring and summer social events.

Rent the Runway's stock price dropped by nearly 4% after a 10% increase in after-hours trading, resulting in a year-to-date decline of about 31%. This brought the company's valuation to $360 million.

As people spend more on experiences, such as travel and dining out, Rent the Runway experiences an increase in users, Hyman stated.

Members of Rent the Runway pay monthly fees ranging from $94 to $235 to receive between four and 16 different items of designer clothing or accessories. Users can add more items to their plans for an additional fee. They can also rent items for four to eight days. Additionally, Rent the Runway allows customers to purchase items on its website at a discounted price.

The retailer's net loss for the three-month period ended Jan. 31 was $39.3 million, or 62 cents per share, compared to a loss of $38.8 million, or 70 cents per share, in the previous year. This was narrower than analysts' estimates for a per-share loss of 70 cents, according to a Refinitiv poll.

The company's revenue increased by approximately 91% to $64.1 million from $33.5 million in the previous year, surpassing expectations of $63.2 million.

According to a survey by StreetAccount, the company's fourth-quarter gross margin of 36.7% exceeded expectations of 27.3%.

The number of active subscribers on Rent the Runway increased by 110% in the fourth quarter, reaching a total of 159,544 subscribers, including those with paused accounts.

According to Hyman, 50% of our traffic comes to Rent the Runway because those people have an upcoming event or occasion. She stated that this period, post-pandemic, presents a "unique window" for the company to acquire new customers and retain them in the long run.

Rent the Runway has introduced a wedding concierge service to assist customers in finding the perfect dress for their special day. The company is now marketing itself as a cost-effective solution for dressing up for various events.

Rent the Runway anticipates sales for the first quarter of fiscal 2022 to be between $63.5 million and $64.5 million, with a total of 130,000 to 132,000 active subscribers. Analysts had predicted revenue of $64.3 million, as per Refinitiv.

The company's projected revenue for the year is between $295 million and $305 million, which is higher than the $203.3 million in sales recorded in fiscal 2021. Analysts had predicted revenue of $305 million.

The company is prioritizing reaching profitability, in addition to winning new customers, though the exact timing on that mark remains unclear.

As the CEO, my top priority is to ensure profitability, she stated.

Find the full financial press release from Rent the Runway here.