Rent the Runway Q1 2024 Update

TL;DR

**RTR Q1 2024: Financials and strategy update filed.**

AI Summary

Rent the Runway, Inc. filed its 10-Q for the period ending April 30, 2024. The filing details financial performance and operational updates for the first quarter of fiscal year 2024. Key financial figures and business segments are presented, reflecting the company's ongoing strategy and market position.

Why It Matters

This filing provides insight into Rent the Runway's financial health and strategic direction, which can impact investors and the broader fashion rental market.

Risk Assessment

Risk Level: medium — The company operates in a competitive and evolving market, with potential risks related to customer acquisition, retention, and inventory management.

Key Players & Entities

• Rent the Runway, Inc. (company) — Filer of the 10-Q
• 2024-04-30 (date) — End of reporting period
• 2024-01-31 (date) — Previous fiscal year end
• 2023-04-30 (date) — Prior year comparative period end

FAQ

Key Financial Figures

• $0.001 — stered Class A common stock, par value $0.001 per share RENT The Nasdaq Global Market

Filing Documents

• rent-20240430.htm (10-Q) — 1199KB
• exhibit311q1fy24.htm (EX-31.1) — 11KB
• exhibit312q1fy24.htm (EX-31.2) — 11KB
• exhibit321q1fy24.htm (EX-32.1) — 5KB
• exhibit322q1fy24.htm (EX-32.2) — 5KB
• 0001468327-24-000168.txt ( ) — 5881KB
• rent-20240430.xsd (EX-101.SCH) — 51KB
• rent-20240430_cal.xml (EX-101.CAL) — 63KB
• rent-20240430_def.xml (EX-101.DEF) — 221KB
• rent-20240430_lab.xml (EX-101.LAB) — 561KB
• rent-20240430_pre.xml (EX-101.PRE) — 392KB
• rent-20240430_htm.xml (XML) — 611KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 4 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 44 Item 4.

Controls and Procedures

Controls and Procedures 45 Part II Item 1.

Legal Proceedings

Legal Proceedings 47 Item 1A.

Risk Factors

Risk Factors 47 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 91 Item 3. Defaults Upon Senior Securities 91 Item 4. Mine Safety Disclosures 91 Item 5. Other Information 91 Item 6. Exhibits 92

Signatures

Signatures 93 Unless the context otherwise requires, we use the terms the "Company," "RTR," "Rent the Runway," "we," "us" and "our" in this Quarterly Report on Form 10-Q, or Quarterly Report, to refer to Rent the Runway, Inc. and, where appropriate, our consolidated subsidiaries. 1 Risk Factor Summary Investing in our Class A common stock involves numerous risks, including the risks described in Part II, Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q. You should carefully consider these risks before making an investment. Below are some of these risks, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects. We have grown rapidly in recent years and have limited experience at our current scale of operations and our historical growth rates are not necessarily indicative of our future performance. If we are unable to drive future growth or manage our growth effectively, our brand, company culture, and financial performance may suffer. The global fashion industry is highly competitive and rapidly changing, and we may not be able to compete effectively. We rely on consumer discretionary spending and have been, and may in the future be, adversely affected by economic downturns and other macroeconomic conditions or trends. Our continued growth depends on our ability to attract new, and retain existing, customers, which may require significant investment in paid marketing channels. If we are unable to cost-effectively grow our customer base, our business, financial condition and results of operations would be harmed. If we fail to retain customers, our business, financial condition, and results of operations would be harmed. If we are unable to acquire and manage our products effectively and plan for future expenses, our operating results could be adversely affected. We face risks arising from the restructuring of our operations, which could adversely affect our financial conditi

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "aims," "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "forecasts," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, share-based compensation, business strategy and initiatives, including rental product depth strategy, sustainability initiatives, business plans, promotional and marketing strategy and onboarding initiatives, impacts from our January 2024 restructuring plan, our 2023 transportation deal with a major national carrier and other cost-savings initiatives, anticipated future expenditures, product acquisition expectations, compliance with our debt covenants, market growth and our objectives for future operations. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors

- Financial Information

Part I - Financial Information

Financial Statements

Item 1. Financial Statements Page Condensed Consolidated Balance Sheets - Unaudited as of April 30, 2024 and Audited as of January 31, 2024 5 Condensed Consolidated Statements of Operations - Unaudited for the three months ended April 30, 2024 and 2023 6 Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - Unaudited for the three months ended April 30, 2024 and 2023 7 Condensed Consolidated Statements of Cash Flows - Unaudited for the three months ended April 30, 2024 and 2023 8 Notes to Condensed Consolidated Financial Statements 1. Business 10 2. Summary of Significant Accounting Policies 10 3. Liquidity 16 4. Restructuring and Related Charges 17 5. Leases - Lessee Accounting 18 6. Rental Product, Net 18 7. Long-Term Debt 19 8. Income Taxes 21 9. Accrued Expenses and Other Current Liabilities 21 10. Fair Value Measurements 21 11. Stockholders' Equity 22 12. Share-based Compensation Plans 23 13. Net Loss per Share Attributable to Common Stockholders 26 14. Commitments and Contingencies 27 4 Table of Contents RENT THE RUNWAY, INC. Condensed Consolidated Balance Sheets (In millions, except share and per share amounts, unaudited) April 30, January 31, 2024 2024 Assets Current assets: Cash and cash equivalents $ 82.0 $ 84.0 Restricted cash, current 5.2 5.2 Prepaid expenses and other current assets 12.1 13.0 Total current assets 99.3 102.2 Restricted cash 4.8 4.8 Rental product, net 99.7 94.0 Fixed assets, net 33.4 35.7 Intangible assets, net 3.1 3.4 Operating lease right-of-use assets 33.2 33.9 Other assets 4.9 4.5 Total assets $ 278.4 $ 278.5 Liabilities and Stockholders' Equity (Deficit) Current liabilities: Accounts payable $ 16.4 $ 5.8 Accrued expenses and other current liabilities 22.2 21.7 Deferred revenue 13.3 10.9 Customer credit liabilities 6.0 6.3 Operating lease liabilities 3.7 3.4 Total current liabilities 61.6 48.1 Long