Rent The Runway Stocks Plummets 27% After-Hours On Mounting Losses, Surging Costs — Retail Traders Still Bullish

Rent The Runway shares gave up nearly all of their 30% gains from Thursday's regular session following the release of its quarterly report, which showed rising costs and shrinking profits.

After the stock gained in the session, seemingly without a catalyst, shares fell 27% in extended trading when the company published its second-quarter earnings report.

The fashion-rental company posted a loss of $26.4 million for Q2, up from $15.6 million a year ago, as total costs swelled 14%. Revenue ticked up 2.5% to $80.9 million, with the company reporting a 13% increase in active subscribers to 146,373.

Rent The Runway lets customers rent designer clothes and accessories through a subscription plan. It also offers one-off rentals and purchases.

The company went public in October 2021, although its market capitalization is now a fraction of the over $1 billion valuation it had at the time. Last year, Rent The Runway completed a 1-for-20 reverse split to address Nasdaq's minimum-price listing concerns, and also cut its workforce by 10%.

Last month, it announced plans to convert a substantial portion of its debt, about $243 million, to equity and extend the tenure of some of the remaining liabilities.

On Stocktwits, the retail sentiment shifted to 'bullish' from 'bearish' following the results, although some watchers expressed concerns with the company's financial position.

As of the last close, Rent The Runway stock is down 7% year-to-date, valuing the firm at $32.3 million.

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