Rent the Runway (NASDAQ:RENT) shares fell Thursday after the company booked widening third-quarter losses, despite sales that shot up 66% year over year, in its first financial report since going public in late October.
The fashion rental platform’s market capitalization has been nearly cut in half since its public debut, when it fetched a more than $1.7 billion valuation. Shares are down roughly 50% since they started trading at $23 apiece on Oct. 27. On Wednesday, the stock closed down 10% at $11.50.
Among investors’ concerns, Rent the Runway has yet to turn a profit. It didn’t do so in the latest quarter, either, as costs associated with its recent public offering and the repayment of debt weighed on profits.
Its active subscriber count has also yet to return to pre-pandemic levels, as Rent the Runway awaits a bigger return among Americans to offices, weddings and concerts in 2022.
Rent the Runway’s net loss for the three-month period ended Oct. 31 nearly doubled to $87.8 million, or $6.72 per share, from a loss of $44.3 million, or $3.98 a share, a year earlier.
Excluding the one-time costs associated with its IPO, Rent the Runway said its net loss was lower year over year.
Revenue grew 66% to $59 million from $35.5 million.
The company ended the quarter with 116,833 active subscribers, excluding those who have put their memberships on pause, up 78% year over year. Rent the Runway said that accounts for about 87% of the active subscriber base the company had back in 2019.
RENT shares jettisoned $1.54, or 13.4% to $9.96.
