Dive Brief:
- Rent to Runway is making progress with its product discovery enhancements, but the changes haven’t fully staunched the company's active subscriber decline, executives said on a Q2 2026 earnings call Friday.
- The company rolled out Outfit Generation, an AI-powered tool that lets users see complete looks instead of just individual items, to all customers in June, interim CEO Teri Bariquit said. Engagement with the tool is running 35% ahead of expectations.
- During the May pilot, customers who used Outfit Generation added items to their cart 12% more often than those who shopped without it, and more than three-quarters of the time they opened another item within the same look, according to Bariquit.
Dive Insight:
Improved product discovery has become a major pillar of Rent the Runway’s multi-year turnaround effort. However, the business’ financial results remain mixed as a new CEO takes the reins.
Chief Commercial Officer Paige Thomas, who joined the company in June, will become CEO on Sept. 14, the company announced in its earnings release Friday. For now, Thomas says she will maintain the brand’s current focus on its subscribers.
"I'm focused on listening to our customer and making every decision through her lens, doubling down on fashion and what makes this fashion service platform unique, while executing with operational excellence," Thomas said in a prepared statement. "This is not a new direction — it's an acceleration of the strong foundation the team has built."
Rent the Runway’s customer-led strategy includes the personalized product carousels and updated imagery it rolled out in April. In August, the company began testing avatars that let shoppers see how outfits look on a range of figures, as well as virtual try-ons that let shoppers check how a specific item will look before they buy.
“Together, they represent a real shift in how she discovers product,” Bariquit said on the call. “She can find an item, picture herself in it, and see the whole look together.”
The changes weren’t enough to boost Rent the Runway’s flagging subscriber base. The company ended the second quarter of 2026 with about 140,800 active subscribers, down 3.8% year over year, according to the earnings release.
The drop was primarily attributed to an increasing number of customers pausing their subscriptions and a decline in subscriber acquisition due to a reduction in promotions, according to interim CFO Dave Loretta.
Revenue growth was in a better spot, with total revenue up 20.8% year over year to $97.7 million in the second quarter of 2026.
Profitability remains elusive, and Rent the Runway reported a net loss of $12.9 million. This was an improvement from a net loss of $26.4 million in the second quarter of 2025.
