Why Is Rent The Runway Stock Down 30% Today? - Rent the Runway (NASDAQ:RENT)

Rent The Runway Inc RENT shares are trading lower Tuesday after the company issued guidance below analyst estimates and announced a 24% workforce reduction.

Q2 Results: Second-quarter revenue increased 64% year-over-year to $76.5 million, which beat average analyst estimates of $73.26 million, according to Benzinga Pro. The company reported a quarterly net loss of 53 cents per share, which beat average analyst estimates of 65 cents per share.

Rent The Runway also announced a restructuring plan to reduce costs, streamline its organizational structure and drive operational efficiencies. The plan primarily includes a total workforce reduction of approximately 24% of corporate employees, reorganizing certain functions, and reallocating resources to continue to focus on customer experience and growth initiatives.

Outlook: Rent The Runway expects third-quarter revenue to be between $72 million and $74 million versus the estimate of $79.72 million. The company expects full-year revenue to be between $285 million and $290 million versus the estimate of $303.84 million.

Analyst Assessment: Several analysts adjusted ratings and price targets on the stock following the company's quarterly results.

Credit Suisse analyst Michael Binetti downgraded Rent The Runway from Outperform to Neutral and lowered the price target from $7 to $4.
Piper Sandler analyst Edward Yruma maintained Rent The Runway with an Overweight and lowered the price target from $10 to $6.
Barclays analyst Ross Sandler maintained Rent The Runway with an Overweight and lowered the price target from $7 to $6.
Morgan Stanley analyst Lauren Schenk maintained Rent The Runway with an Overweight and lowered the price target from $14 to $13.

RENT Price Action: Rent The Runway has a 52-week high of $8.51 and a 52-week low of $2.99.

The stock was down 30% at $3.45 Tuesday morning.

Photo: Ahmad Ardity from Pixabay.

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