Arhaus (NASDAQ:ARHS) Issues Earnings Results

Arhaus (NASDAQ:ARHS) issued its quarterly earnings data on Thursday. The company reported $0.11 EPS for the quarter, topping the consensus estimate of $0.10 by $0.01, FiscalAI reports. Arhaus had a net margin of 4.88% and a return on equity of 17.78%. The business had revenue of $364.85 million during the quarter, compared to analyst estimates of $351.53 million. During the same period in the prior year, the business earned $0.15 EPS. The company’s revenue for the quarter was up 5.1% on a year-over-year basis.

Here are the key takeaways from Arhaus’ conference call:

• Record FY‑2025 results: Net revenue reached $1.38 billion (+8.5% YoY) and adjusted EBITDA was $145 million (+8.9%), which management cites as proof the company’s premium, customization‑led model is working.
• Q4 margin and earnings pressure: Q4 gross margin and net income were hurt by an increase in inventory reserves for obsolete stock and higher showroom occupancy costs, causing Q4 adjusted EBITDA to decline versus last year.
• Tariff headwind for 2026: Management now estimates incremental tariff impacts of roughly $30–$40 million next year, and expects to mitigate some of that through sourcing shifts, vendor negotiations and selective pricing.
• Showroom and design channel growth: Arhaus ended 2025 with 107 showrooms (net growth 3.9%), plans ~10–14 showroom projects in 2026, and is prioritizing the trade/interior designer channel where designer‑led orders have much higher AOVs (≈4x) and drive repeat business.
• Strong liquidity and capital allocation: Cash was $253 million with free cash flow of $59 million, the board declared a $0.35/share special dividend, and the company remains debt‑free while funding a multiyear digital transformation (≈$12M cash in 2026) aimed at improving long‑term operating leverage.

Arhaus Stock Down 10.9%

NASDAQ:ARHS traded down $1.01 during trading hours on Friday, reaching $8.25. 1,656,169 shares of the company traded hands, compared to its average volume of 1,305,484. The company has a current ratio of 1.34, a quick ratio of 0.64 and a debt-to-equity ratio of 0.13. The business’s 50-day moving average price is $10.40 and its two-hundred day moving average price is $10.61. Arhaus has a 1 year low of $6.61 and a 1 year high of $12.98. The stock has a market capitalization of $1.16 billion, a P/E ratio of 17.19, a P/E/G ratio of 4.78 and a beta of 2.51.

Arhaus Announces Dividend

The business also recently disclosed a special dividend, which will be paid on Tuesday, March 31st. Shareholders of record on Wednesday, March 18th will be paid a dividend of $0.35 per share. The ex-dividend date is Wednesday, March 18th.

Analyst Upgrades and Downgrades

A number of equities analysts recently issued reports on the stock. Jefferies Financial Group reissued a “hold” rating and issued a $9.50 price target on shares of Arhaus in a research note on Thursday. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Arhaus in a research report on Monday, December 29th. Zacks Research lowered Arhaus from a “strong-buy” rating to a “hold” rating in a research report on Friday, November 7th. Morgan Stanley raised their target price on Arhaus from $10.50 to $12.00 and gave the company an “equal weight” rating in a research note on Thursday, January 15th. Finally, Wall Street Zen lowered Arhaus from a “buy” rating to a “hold” rating in a research report on Saturday, November 8th. Three equities research analysts have rated the stock with a Buy rating and ten have given a Hold rating to the company’s stock. According to data from MarketBeat, Arhaus has an average rating of “Hold” and a consensus price target of $11.20.

Key Stories Impacting Arhaus

Here are the key news stories impacting Arhaus this week:

• Positive Sentiment: Declared a special cash dividend of $0.35/share payable March 31, rewarding shareholders and signaling strong cash generation. Arhaus press release
• Positive Sentiment: Q4 results beat expectations: revenue $364.8M (above consensus) and EPS $0.11 vs. $0.10 estimate; full-year revenue rose ~8.5% to a record $1.38B and adjusted EBITDA increased — supports longer‑term growth thesis. Earnings beat article
• Positive Sentiment: Company set FY2026 net revenue target of $1.43B–$1.47B and plans 10–14 showroom projects (4–6 new openings), continuing its showroom expansion strategy that drove 2025 growth. Revenue target / expansion
• Positive Sentiment: One analyst (Telsey) raised its target to $13 (from $12), signaling some analyst confidence in the recovery/expansion story. Benzinga note
• Neutral Sentiment: Management will attend investor conferences (Raymond James meetings), increasing access for investors and potential for additional clarity. Investor conference notice
• Neutral Sentiment: Short-interest data reported appears unreliable (zeros/NaN) and should not be interpreted as a material driver today; ignore until corrected.
• Negative Sentiment: Q1 2026 revenue guidance of $300M–$320M is below the consensus (~$327M), implying near-term demand softness and pressuring the stock. Guidance details
• Negative Sentiment: Profitability/momentum mixed: full-year net income declined ~1.9% YoY and comparable written sales grew only 1.3%, suggesting slower demand and pressure on margins despite revenue growth. Earnings release
• Negative Sentiment: TD Cowen trimmed its target to $12 from $13 (but kept a Buy), a modest analyst downgrade that can weigh on sentiment. Analyst note

Hedge Funds Weigh In On Arhaus

A number of hedge funds have recently bought and sold shares of the company. Invesco Ltd. increased its stake in Arhaus by 49.0% during the 4th quarter. Invesco Ltd. now owns 95,939 shares of the company’s stock valued at $1,075,000 after purchasing an additional 31,550 shares in the last quarter. Numerai GP LLC purchased a new stake in shares of Arhaus during the fourth quarter valued at approximately $361,000. Balyasny Asset Management L.P. bought a new stake in shares of Arhaus during the fourth quarter valued at approximately $10,962,000. AQR Capital Management LLC raised its holdings in Arhaus by 20.9% in the 4th quarter. AQR Capital Management LLC now owns 12,993 shares of the company’s stock worth $146,000 after acquiring an additional 2,245 shares during the last quarter. Finally, EFG International AG bought a new position in Arhaus in the 4th quarter valued at approximately $4,334,000. Institutional investors own 27.88% of the company’s stock.

About Arhaus

Arhaus (NASDAQ:ARHS) is a U.S.-based retailer specializing in high-end home furnishings and décor. Since its founding in 1986 in northeastern Ohio, the company has built a reputation for curating unique, design-forward products that blend contemporary aesthetics with artisanal craftsmanship. Headquartered in Boston Heights, Ohio, Arhaus operates a network of brick-and-mortar galleries across the United States alongside a robust e-commerce platform, serving customers from coastal metropolitan areas to interior regions.

The company’s product portfolio encompasses a wide range of furniture categories—including sofas, dining tables, bedroom pieces and storage solutions—complemented by lighting fixtures, rugs, pillows, wall art and decorative accessories.