Rent the Runway slips after another unfashionable quarter

Rent the Runway is so last season, at least on Wall Street.

The fashion subscription service reported earnings on Monday that were in line with analysts’ estimates, but that didn’t stop investors from selling off, sending its stock down more than 20%. It’s now down more than 97% from where it was trading after its 2021 initial public offering.

Rent the Runway’s revenue has been virtually flat since 2022, bouncing under $80 million each quarter. Rent the Runway, which has been around since 2009, has never reported a profitable quarter and has swelling debt.

The economics of a fashion subscription service are tricky given the high costs of operation. But while Rent the Runway has been flailing, Urban Outfitters introduced its own competitor in 2019, Nuuly, that appears to be beating the legacy company at its own game.

Nuuly has gone from making $2 million in revenue in 2019 to over $97 million in its most recent quarter. According to Urban Outfitters, Nuuly has been profitable since November 2023.

While things aren’t looking great for Rent the Runway, it is losing less money than it used to. So far this year, it has reported a net loss of $56.5 million. That’s actually an improvement, considering it hemorrhaged $113 million last year and even more than that each year since at least 2021, when it launched its IPO.