Rent the Runway 2026 Q2 Earnings Continued Losses Amid Strategic Recapitalization

Rent the Runway’s Q2 2026 results reflected a modest revenue increase but widened losses, with the company continuing to implement its transformative recapitalization plan. The report revealed a 1.0% year-over-year revenue growth to $69.20 million in subscription and Reserve rental revenue, though net losses expanded to $6.55 per share, a 57.1% increase from the prior year. Management emphasized long-term strategic momentum despite near-term financial challenges.

Revenue
Total revenue for Q2 2026 reached $80.90 million, driven by subscription and Reserve rental revenue of $69.20 million and additional revenue of $11.70 million. This marks a 1.0% increase compared to the same period in 2025, reflecting the company’s continued focus on its core rental business and diversifying other revenue streams.

Earnings/Net Income
Rent the Runway’s net losses worsened to $26.40 million in Q2 2026, a 69.2% increase from $15.60 million in the prior year. Earnings per share dropped to a loss of $6.55, a 57.1% wider loss compared to $4.17 in 2025 Q2. Despite a slight revenue uptick, the company remains unprofitable for the fifth consecutive year in the quarter, signaling ongoing operational challenges.

Price Action
Following the earnings release, Rent the Runway’s stock experienced significant volatility. The stock price plummeted 24.96% on the day of the report, 17.16% over the following week, but showed a 15.67% rebound month-to-date, highlighting mixed investor sentiment and market reaction to the company’s strategic and financial developments.

Post-Earnings Price Action Review
Despite the earnings miss and continued losses, Rent the Runway’s recapitalization plan and progress in customer satisfaction metrics have sparked cautious optimism among investors. The stock's short-term volatility reflects uncertainty, but the long-term strategy of debt reduction and inventory expansion appears to be gaining traction. The company’s ability to balance growth with profitability remains a key focus for market observers.

CEO Commentary
CEO Jennifer Hyman emphasized the importance of the recapitalization plan in strengthening Rent the Runway’s balance sheet, reducing total debt to approximately $120 million with an extended maturity to 2029. She also highlighted a 13.4% year-over-year increase in active subscribers and a 77% rise in average subscription Net Promoter Score, underscoring the company’s progress in customer engagement and retention. Hyman described this phase as “IPO 2.0,” expressing confidence in the long-term potential of the business.

Guidance
Rent the Runway provided Q3 2025 revenue guidance between $82 million and $84 million, with an adjusted EBITDA margin projected to range between -2% and +2%. For the full fiscal year 2025, the company expects double-digit growth in ending active subscribers but anticipates free cash flow to remain below -$40 million, primarily due to recapitalization costs and ongoing operational investments.

Additional News
In late August 2025, Rent the Runway announced a transformative recapitalization plan led by its existing lender, Aranda Principal Strategies, in partnership with STORY 3 Capital Partners and Nexus Capital Management. This strategic move is expected to reduce the company’s debt from $340 million to $120 million and extend the maturity to 2029. In addition to the debt restructuring, the company has significantly expanded its inventory, adding thousands of new styles and 56 new brands in the first half of FY 2025. Customer engagement metrics also improved, with a 84% increase in inventory share of views and a 57% rise in new units at home in Q2. The company also introduced new exclusive brand collaborations and enhanced its subscription experience with a personalized home screen and tiered rewards program. These initiatives, alongside a modest price increase of $2 per item on August 1st, reflect Rent the Runway’s broader strategy to strengthen its market position and deliver long-term value.