SPX3,781.59-9.34 -0.25%
DIA302.82-0.32 -0.11%
IXIC11,120.73-55.68 -0.50%

Why Is Rent The Runway Stock Down 30% Today?

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

Benzinga · 09/13/2022 10:58

Rent The Runway Inc (NASDAQ: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.

See Also: Elon Musk's Takeover Set To Get Twitter Shareholder Approval By 'Wide Margin' Today: Report

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.