What were the key takeaways from Arhaus's earnings call?

What factors drove the changes in Arhaus's revenue and profit?

What does Arhaus do and what are its main business segments?

What is the market's earnings forecast for Arhaus next quarter?

What is Arhaus's gross profit margin?

What is Arhaus's latest dividend and current dividend yield?

What guidance did Arhaus's management provide for the next earnings period?

What were the key takeaways from Arhaus’s earnings call?

- **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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ARHS

ARHS fundamentals

You can ask Aime