Wedding, event revival boosts Rent the Runway first quarter earnings

Yahoo Finance Live anchors discuss first-quarter earnings for Rent the Runway.

Video transcript

JULIE HYMAN: Rent the Runway, you like that? They are up by 11% today because this company is doing better than estimated. Revenue coming in at about $67 million $64 million is what analysts had been anticipating. The adjusted EBITDA loss is smaller than estimated, or if you look at it on a loss per share basis as well. And the company's forecasts coming in ahead of estimates. So, here is a story that shows that it is not sort of an across the landscape retail issue here, right?

So, Rent the Runway, while its costs are going up because everyone's costs are going up and they ship the stuff to you, so you've got various costs there, but it seems like things like Piper Sandler saying the revival of events like weddings are helping the company here.

BRIAN SOZZI: I do wonder how both of these businesses, Stitch Fix and Rent the Runway, do in a recession. If you are struggling this much in the lead-up to a recession, how are you going--

JULIE HYMAN: Well--

BRAD SMITH: What would it be leaned into more, for Rent the Runway?

JULIE HYMAN: Very specifically here, Barclay saying Rent the Runway could be a, quote, "sneaky recession beneficiary."

BRAD SMITH: Why?

JULIE HYMAN: Because the company, I guess, made some commentary about how it would perform in a recessionary environment.

BRAD SMITH: But wasn't that what it was birthed for, for consumers who didn't want to have the burden of having to purchase something outright, just be able to rent it. And I mean, I would have loved if it was available in the men's category. But I know I sweat too much here on set even for it to even be plausible. And so with that in mind, it really comes back to how much you're getting that value for just a subscription versus an outright purchase in some of those other--

JULIE HYMAN: You are not-- I never would have guessed that. You seem cool as a cucumber. I had no idea.

BRAD SMITH: It's the AC that's directly above my head.

BRIAN SOZZI: I'll just say this. The 15% of the workforce at Stitch Fix that got laid off, if they were using Rent the Runway, they have no use for it right now.

BRAD SMITH: Well--

JULIE HYMAN: OK, that's one way to look at it.

BRIAN SOZZI: But this is what's happening.

JULIE HYMAN: But there's still--

BRIAN SOZZI: People are [INAUDIBLE] off.

JULIE HYMAN: But if--

BRIAN SOZZI: They're not using the service.

JULIE HYMAN: But if they're going to a wedding, they might still rent a dress--

BRIAN SOZZI: Are they still going to go to that wedding?

JULIE HYMAN: I mean, probably.

BRIAN SOZZI: It's just, it's hypothetical.