Arhaus Inc
NASDAQ:ARHS
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Arhaus Inc
Arhaus Inc., a name synonymous with refined elegance in the realm of luxury home furnishings, has carved out a distinctive niche in the marketplace. Established in 1986, this Ohio-born company quickly made a mark by offering unique furniture pieces that combine timeless design with sustainability—a forward-thinking approach that has garnered a loyal customer base. Arhaus thrives on its commitment to craftsmanship, partnering with artisans globally who adhere to rigorous quality and ethical standards. This not only ensures the creation of exquisite furniture but also supports sustainable practices by using renewable and recycled materials. By maintaining control over both design and manufacturing processes, Arhaus consistently delivers exclusive, handcrafted items that resonate with their well-heeled clientele.
How Arhaus turns a profit is a testament to its robust business model centered around a multi-channel strategy. The company effectively operates a network of showrooms across the United States, which serve as immersive settings where potential buyers can experience the elegance of its collections first-hand. Complementing these physical locations is a sophisticated online platform, allowing Arhaus to reach a broader audience and providing a seamless omnichannel shopping experience. Their revenue stream is bolstered not only by direct sales but also through high-touch customer service, as interior designers collaborate directly with clients. Providing tailored design services enhances the customer experience, fostering brand loyalty and encouraging repeat purchases, thereby driving steady financial growth for the company.
Arhaus Inc., a name synonymous with refined elegance in the realm of luxury home furnishings, has carved out a distinctive niche in the marketplace. Established in 1986, this Ohio-born company quickly made a mark by offering unique furniture pieces that combine timeless design with sustainability—a forward-thinking approach that has garnered a loyal customer base. Arhaus thrives on its commitment to craftsmanship, partnering with artisans globally who adhere to rigorous quality and ethical standards. This not only ensures the creation of exquisite furniture but also supports sustainable practices by using renewable and recycled materials. By maintaining control over both design and manufacturing processes, Arhaus consistently delivers exclusive, handcrafted items that resonate with their well-heeled clientele.
How Arhaus turns a profit is a testament to its robust business model centered around a multi-channel strategy. The company effectively operates a network of showrooms across the United States, which serve as immersive settings where potential buyers can experience the elegance of its collections first-hand. Complementing these physical locations is a sophisticated online platform, allowing Arhaus to reach a broader audience and providing a seamless omnichannel shopping experience. Their revenue stream is bolstered not only by direct sales but also through high-touch customer service, as interior designers collaborate directly with clients. Providing tailored design services enhances the customer experience, fostering brand loyalty and encouraging repeat purchases, thereby driving steady financial growth for the company.
Record Revenue: Net revenue reached $345 million, up 8% year-over-year and near the top end of guidance, marking the highest Q3 revenue in company history.
Strong Demand: Comparable growth was 4.1%, and demand comparable growth (written orders) jumped 7.4%, reflecting healthy client activity, especially among high-end clients.
Margin Expansion: Gross margin improved by 10 basis points to 38.7%, and adjusted EBITDA margin expanded 180 basis points to 9.1%.
Guidance Updated: Full-year 2025 guidance raised at the low end for revenue and profit; 2025 net revenue now expected to be $1.35–$1.38 billion, and net income $58–$68 million.
Tariff Impact Managed: 2026 tariff headwind now expected at $50–$60 million, but management reiterated plans to offset most or all via pricing, sourcing, and vendor collaboration.
Showroom Expansion: Largest showroom to date opened in Pasadena, CA; company expects 12–15 showroom projects in 2025.
Digital Transformation: An 18-month, $30 million systems upgrade is underway, targeting significant efficiency gains and 50 bps SG&A improvement by 2030.
Macro Uncertainty: Management observed some demand volatility, particularly tied to promotional calendar shifts, but expressed confidence in resilience of high-end client base.