Rent the Runway Q2 Earnings Call Highlights

Rent the Runway reported record second-quarter revenue and expanded profitability as the fashion rental platform emphasized its core rental, resale and customer-experience initiatives while pausing several noncore pilots. The company generated $97.7 million in second-quarter revenue, up 20.8% from a year earlier and 8.7% sequentially. Interim CFO and Treasurer Dave Loretta said the result represented an all-time revenue record for the company, supported by higher revenue per subscriber, increased add-on bookings and the effect of subscription price increases implemented in August 2025.

Rent the Runway also announced a leadership transition. Paige Thomas will become chief executive officer, president and a board member effective Sept. 14. Thomas joined the company in June 2026 as chief commercial officer and previously held leadership positions at Signet Jewelers, Saks OFF 5TH and Nordstrom. Interim CEO Teri Bariquit will become non-executive chair of the board on Sept. 14. “The strategy is set, the team is in place, and the work is underway,” Bariquit said.

Rental revenue increased $14.6 million, or 21% year over year, during the quarter. Loretta attributed the increase primarily to higher average revenue per subscriber and a greater volume of add-on bookings, partly offset by lower Reserve revenue compared with the prior-year period. Other revenue, which includes resale, rose $2.2 million, or 18.8%, from the second quarter of 2025. Loretta said resale revenue grew significantly and described the category as a substantial growth opportunity, citing demand for resale apparel and the company’s ability to create room for new inventory while improving gross margins.

Gross profit margin rose to 36.1% from 30% a year earlier, a 609-basis-point increase. The company said the improvement reflected lower rental product depreciation and revenue-share costs as a percentage of revenue, along with better fulfillment-cost leverage. Fulfillment costs were $23.5 million, compared with $22.5 million a year earlier. Fulfillment costs declined to 24.1% of revenue from 27.8% of revenue.

Operating expenses fell 2% year over year, driven by lower general and administrative expenses. Total operating expenses represented 42% of revenue, compared with 51.7% in the prior-year quarter. Adjusted EBITDA increased to $12.6 million, or 12.9% of revenue, from $3.6 million, or 4.4% of revenue. Year-to-date free cash flow was negative $21.6 million, improving from negative $32.9 million in the comparable 2025 period. The company said the improvement was driven by lower inventory-related capital expenditures and increased operating income, partially offset by reduced working-capital benefits.