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- **Revenue Milestone**: 2025 net revenue of $1.38 billion (+8.5% YoY) underscores showroom expansion and product differentiation.
- **Margin Challenges**: Gross margin down 190 bps in Q4 2025 due to inventory reserves and occupancy costs, offset by $145 million adjusted EBITDA (+8.9% YoY).
- **Strategic Investments**: $0.35/share special dividend highlights financial strength, alongside $12 million digital transformation spend in 2026.
- **Trade Growth Catalyst**: Targeting $27 billion U.S. design market with one-stop trade platform, driving 4x AOV for interior designer projects.
- **Product Innovation**: 2025 upholstery and customization growth reflects shift to richer, traditional aesthetics, supported by domestic manufacturing expansion.

**【CEO Summary Section】**
- **Record Revenue Growth**: 2025 net revenue reached $1.38 billion, up 8.5% YoY, driven by showroom expansion and differentiated product offerings.
- **New Leadership**: Introduction of Michael Rengel as Chief Merchandising Officer to strengthen product strategy and cross-functional collaboration.
- **Upholstery and Customization Strength**: Upholstery achieved highest total written sales in history, with customization growth reflecting intentional client investments.
- **Interior Design Impact**: Interior designer-assisted projects generate 4x higher AOV, with 40% of clients becoming repeat purchasers.
- **Trade Channel Expansion**: Targeting the $27 billion U.S. interior design market, leveraging Arhaus as a one-stop shop for trade professionals.
- **Product Innovation**: 2025 saw record product launches, with a shift towards richer colors, patterns, and traditional aesthetics, supported by expanded domestic upholstery manufacturing.

**【CFO Financial Commentary】**
- **Full Year 2025 Results**: 
  - Net revenue: $1.38 billion (+8.5% YoY)
  - Gross profit: $536 million (+7% YoY)
  - Net income: $67 million (-1.9% YoY)
  - Adjusted EBITDA: $145 million (+8.9% YoY)
- **Q4 2025 Performance**: 
  - Net revenue: $365 million (+5.1% YoY)
  - Gross margin: 38.1% (-190 bps YoY) due to inventory reserves and showroom costs
  - Adjusted EBITDA: $35 million (-15.1% YoY)
- **Strategic Investments**: 
  - $12 million in digital transformation costs for 2026
  - Free cash flow: $59 million for 2025, supporting a $0.35/share special dividend
- **Showroom Expansion**: 13 total projects in 2025, net unit growth of 3.9%, targeting 10-14 projects in 2026.

**【Q&A Highlights】**
- **Guidance and Margin Leverage**: 2026 net revenue guide of $1.43-$1.47 billion reflects cautious macro outlook, with EBITDA margin expansion driven by delivery efficiencies and product mix improvements.
- **Tariff Mitigation**: 2026 tariff impact estimated at $30-$40 million, partially offset by vendor negotiations and pricing actions.
- **Obsolete Inventory Management**: Q4 2025 inventory reserves of $14 million reflect strategic write-offs to focus on sellable goods.
- **Trade Channel Growth**: Trade sales growth supported by enhanced designer incentives and one-stop shopping convenience.
- **Digital Transformation Progress**: Transportation management system rollouts expected to improve freight efficiencies in 2026.

Arhaus, Inc. (ARHS) Q4 2025 Earnings Call Transcript

- **Revenue Growth**: Q3 net revenue up 8% YoY to $345 million, driven by showroom expansion and high-end client demand.
- **Product Success**: Fall Collection achieved record demand, with September being the highest total demand month. Upholstery sales grew 15%.
- **Showroom Expansion**: 12-15 new showrooms in 2025, including largest in Pasadena, CA. 70% of upholstery sourced domestically to mitigate tariffs.
- **Financial Strength**: Adjusted EBITDA up 35.2% YoY to $31.2 million; debt-free with $262 million cash.
- **Tariff Mitigation**: 2026 impact projected at $50-60 million, with pricing adjustments and vendor collaboration to offset costs.
- **Digital Transformation**: $30 million investment to modernize systems, targeting 50 basis points SG&A improvement by 2030.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 net revenue of $345 million, up 8% YoY, driven by showroom expansion and strong demand from high-end clients. Comparable growth of 4.1% reflects healthy client engagement.
- **Product Success**: Fall 2025 Collection achieved record demand, with September being the highest total demand month in company history. Upholstery sales grew 15%, and custom orders hit a new high.
- **Showroom Expansion**: Opened largest traditional showroom in Pasadena, CA, and first Montana showroom in Bozeman. 2025 plans include 12-15 showroom projects, with 70% of upholstery sourced domestically to mitigate tariffs.
- **Sustainability**: Emphasized responsibly sourced materials and artisan craftsmanship, aligning with brand values.
- **Tariff Strategy**: 3-point plan includes vendor negotiations, sourcing diversification, and operational efficiency. 2026 tariff impact estimated at $50-60 million, net of mitigation.

**【CFO Financial Commentary】**
- **Financial Highlights**: Q3 gross profit $133.4 million (+8.4% YoY), gross margin 38.7%, and adjusted EBITDA $31.2 million (+35.2% YoY). Net income $12.2 million (+23.1% YoY).
- **Cost Management**: SG&A expenses grew 4.1% to $117 million, with 34% of net revenue, reflecting strong cost leverage. Tariff mitigation efforts reduced 2025 impact to $12 million.
- **Balance Sheet**: $262 million cash, debt-free, supporting disciplined growth. Inventory up 10.7% to $329 million, reflecting investment in bestsellers.
- **Tariff Impact**: 2026 impact projected at $50-60 million, with pricing adjustments and vendor collaboration to offset costs.

**【Q&A Key Highlights】**
- **Bath Collection Launch**: Initial feedback positive, with new product introductions planned for 2026. Designers report 4x higher order values for clients using in-home services.
- **Showroom Productivity**: Pasadena showroom exceeded expectations, with 90% of clients within 50 miles of a showroom. 2025 capex reduced to $70 million (from $90M) due to delayed tech projects.
- **Demand Volatility**: October demand down 14.8% YoY due to promotional calendar shift, but Q3 demand comp +7.4% and year-to-date +2.8%. Deferred demand seen as a key driver.
- **Tariff Mitigation**: 70% of upholstery sourced domestically; 2026 tariff impact to be offset via pricing, vendor savings, and operational efficiency. Spring 2026 collection designed with tariffs factored in.
- **Digital Transformation**: $30 million investment in new systems to improve SG&A by 50 basis points by 2030, with 2025 spend of $2 million and 2026 spend of $12 million.


Arhaus, Inc. (ARHS) Q3 2025 Earnings Call Transcript

- **Record Revenue Growth**: Q2 net revenue up 15.7% YoY to $358 million, driven by Dallas DC transition and strong demand conversion.
- **Bath Collection Launch**: Comprehensive new product line expands into high-margin bath space, supported by multi-year development.
- **Profitability Expansion**: Gross margin improved 130 bps to 41.4%, net income up 57.7% YoY, and adjusted EBITDA up 51.2%.
- **Showroom Expansion**: 12-15 Showroom projects in 2025, targeting 165 traditional and 50 Design Studios long-term.
- **Resilient Demand**: July demand rebounded 15.7% YoY, with year-to-date demand up 2.2% despite macro volatility.

**【CEO Summary Section】**
- Achieved record net revenue of $358 million, up 15.7% YoY, driven by the Dallas Distribution Center transition and strong first-quarter demand conversion.
- Comparable sales growth of 10.5%, with July demand rebounding 15.7% YoY, reflecting resilience in high-end client base.
- Launched the Arhaus Bath Collection, a comprehensive expansion into the bath space, available in Showrooms and online this fall.
- Emphasized product innovation, including 600 fabrics and 90 leathers for upholstery customization, and a focus on timeless, globally inspired designs.
- Showroom expansion strategy targets 5-7 new locations annually, with Design Studios for higher-margin opportunities.

**【CFO Financial Commentary】**
- Gross profit expanded 130 basis points to 41.4%, driven by Showroom occupancy cost reductions and product margin improvements.
- SG&A expenses grew 6.8% to $101 million but decreased 240 basis points as a percentage of net revenue, reflecting cost control.
- Net income of $35 million (57.7% YoY growth) and adjusted EBITDA of $60 million (51.2% YoY growth) highlighted earnings leverage.
- Balance sheet remains strong with $235 million in cash and no debt, supporting disciplined expansion.
- Full-year outlook: Net revenue $1.29-$1.38 billion, comparable sales -5% to +1.5%, net income $48-$68 million.

**【Q&A Key Highlights】**
- **Bath Collection Potential**: Modeled after successful outdoor furniture line, expected to drive incremental revenue through Showroom and online channels.
- **Demand Volatility**: July demand rebounded 15.7% YoY, but Q4 faces headwinds from tariffs and macro uncertainty.
- **SG&A Efficiency**: 2025 investments of $10 million in ERP and distribution systems aim to improve scalability and reduce headcount growth rate.
- **Market Share Growth**: CEO cites product uniqueness and trade designer engagement as key differentiators, with interior designer orders up 4x average ticket.
- **Tariff Mitigation**: Sourcing diversification reduced China exposure to 5% of receipts, offsetting $12 million annual tariff impact.

Arhaus (ARHS)-7 Aug 25-2025 Q2 Earnings call transcript

- **Resilient Growth**: 5.5% YoY revenue growth despite April sales dip, driven by showroom expansion and client loyalty.
- **Sourcing Shift Success**: China sourcing reduced to 1% by Q4, mitigating tariff risks and supporting margin stability.
- **Showroom Expansion**: 12-15 new projects in 2025, targeting high-traffic locations for long-term market share gain.
- **Financial Strength**: Debt-free with $214M cash, enabling strategic investments in supply chain resilience.
- **Tariff Impact Management**: $10M P&L impact offset by vendor partnerships and sourcing diversification.

**【CEO Opening Remarks】**
- Q1 2025 net revenue grew 5.5% YoY to $311 million, driven by showroom expansion and strong client engagement.
- Demand comparable growth of 4.1% reflects resilience despite macro volatility, with April sales down 10% due to tariff news and stock market volatility.
- China sourcing reduced to 13% in Q1, expected to drop to 5% in Q3 and 1% in Q4, supporting margin stability.
- 2025 showroom projects raised to 12-15, including 4-6 new locations, targeting premier markets with strong foot traffic.
- Financial strength: $214M cash, debt-free, enabling strategic investments in supply chain and technology.

**【CFO Financial Highlights】**
- Gross margin decreased 190bps to 37.1% due to higher showroom occupancy and product costs.
- SG&A rose 13.9% YoY to $110M, driven by warehouse expenses, marketing, and new showroom openings.
- Adjusted EBITDA of $19M (6.0% margin) reflects short-term macro challenges.
- Full-year 2025 guidance revised to $1.29B-$1.38B net revenue, with $10M tariff impact factored in.
- Q2 2025 net revenue expected $320M-$350M, reflecting cautious outlook.

**【Q&A Key Takeaways】**
- Tariff mitigation: $10M P&L impact, partially offset by sourcing diversification and vendor concessions.
- Consumer behavior: Average order value up, no cancellations despite macro uncertainty.
- Showroom strategy: 28 projects in pipeline through 2027, prioritizing ROI and brand visibility.
- Pricing strategy: No immediate price increases, focusing on value proposition and client trust.
- Inventory management: Strong backlogs, no delays in delivery timelines.

Arhaus, Inc. (ARHS) Q1 2025 Earnings Call Transcript

- **Showroom Expansion Success**: 11 new locations in 2024, with 3-5 openings planned for 2025. Q4 demand comparable growth of 5.7% highlights showroom-driven momentum.
- **Financial Resilience**: Full-year adjusted EBITDA of $133 million despite macro challenges. 2025 guidance targets $140-$150 million adjusted EBITDA.
- **Innovation Focus**: 2025 product pipeline includes customizable furniture and advanced motion tech, supported by a new ERP system for operational efficiency.
- **Risk Management**: Diversified supply chain and strategic inventory builds position the company to navigate macroeconomic uncertainty.


**【CEO Summary Section】**
- **Showroom Expansion Milestone**: Opened 11 new showrooms in 2024, reaching 103 locations across 30 states. Key openings include Greenwich, Connecticut; Oklahoma City, Oklahoma; and The Grove in Los Angeles. 
- **Demand Growth**: Q4 2024 demand comparable growth of 5.7%, with full-year demand comparable growth of 2.2% despite macroeconomic headwinds. Three-year stack basis demand growth at 5.5% underscores resilience.
- **2025 Strategy**: Plan to open 3-5 new showrooms, expand product innovation (e.g., customizable wood furniture), and launch a new ERP system to optimize operations.

**【CFO Financial Commentary】**
- **Q4 2024 Financials**: Net revenue $347 million (+0.9% YoY), adjusted EBITDA $41 million (11.9% margin). Full-year net revenue $1.27 billion (-1.3% YoY), adjusted EBITDA $133 million (10.5% margin).
- **Gross Margin Challenges**: 40.0% Q4 gross margin (-100bps YoY) due to higher showroom occupancy costs. Full-year gross margin 39.4% (-260bps YoY).
- **2025 Outlook**: Net revenue $1.36-$1.40 billion (0-3% comparable growth), adjusted EBITDA $140-$150 million. Q1 2025 net revenue $303-$323 million (-6% to +1% comparable growth).

**【Q&A Key Highlights】**
- **Product Pipeline**: 2025 will feature expanded wood furniture, power motion innovations, and a focus on craftsmanship differentiation. Management confident in new product reception.
- **Promotional Strategy**: Maintained premium pricing focus, with Q4 demand growth reflecting effective marketing. 2025 strategy will balance promotions with brand positioning.
- **Tariff Mitigation**: Diversified supply chain (US accounts for largest share) and vendor partnerships to offset potential tariff impacts. 2025 guidance includes known tariff risks.
- **Inventory Management**: 17% YoY inventory increase driven by new showroom openings and outdoor season stockpiling. Management views inventory as strategic investment.


Actual	0.1835	0.1401	0.12	0.28	0.27	0.34	0.25	0.29	0.14	0.22	0.11	0.16	0.07	0.1414	0.0308	0.25	0.0898	0.1106
Forecast	0.1314	0.0437	0.0889	0.1188	0.1444	0.2033	0.1971	0.2554	0.1179	0.1645	0.017	0.1179	0.0796	0.1223	0.0608	0.1494	0.0795	0.0921
Surprise	+39.65%	+220.59%	+34.98%	+135.69%	+86.98%	+67.24%	+26.84%	+13.55%	+18.74%	+33.74%	+547.06%	+35.71%	-12.06%	+15.62%	-49.34%	+67.34%	+12.96%	+20.09%

ARHS

ARHS fundamentals

ARHS Q4 2025 Earnings

Earnings Call

You can ask Aime

ARHS

ARHS fundamentals

ARHS Q4 2025 Earnings

Earnings Call

ARHS Earnings Call Summary for Q4/20258:30 AM on Feb 26, 2026

ARHS Earnings Call Summary for Q3/20258:30 AM on Nov 6, 2025

ARHS Earnings Call Summary for Q2/20258:30 AM on Aug 7, 2025

ARHS Earnings Call Summary for Q1/20258:30 AM on May 8, 2025

ARHS Earnings Call Summary for Q4/20248:30 AM on Feb 26, 2025

You can ask Aime