Arhaus (ARHS) AI Stock Analysis

• Market Cap: $1.23B
• Dividend Yield: N/A
• Average Volume (3M): 1.70M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 1.49
• Revenue Growth: 0.71%
• EPS Growth: -45.31%
• Country: US
• Employees: 2,390
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Home Improvement
• EPS (TTM): 0.03
• Shares Outstanding: 53,818,123
• 10 Day Avg. Volume: 1,082,332
• 30 Day Avg. Volume: 1,702,737
• PEG Ratio: 0.04
• Price to Book (P/B): 6.42
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 61.77
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 3.16
• Enterprise Value/Ebitda: 2.58
• 1Y Price Target: $10.27
• Price Target Upside: 17.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 68 Neutral
• Price Target: $9.50 ▲(8.70%Upside)

The overall score reflects solid financial performance and strategic growth plans but is tempered by concerns over declining margins and valuation. Technical indicators suggest cautious market sentiment, while the earnings call provides mixed guidance amid external challenges.

Positive Factors

Financial Stability

The company’s healthy cash flow and strong balance sheet should provide some flexibility amid all the uncertainty around tariffs, where the company is already well positioned with only 13% of goods sourced from China.

Leadership and Management

The recent executive appointments should help stabilize leadership, ease concerns over potential disruptions amid heavy investments in IT and operations, and help restore momentum.

Market Positioning

ARHS is well positioned in the high-end segment of the furniture market with a differentiated and high quality product offering which could lead to continued share growth.

Negative Factors

Demand Volatility

Management expects first-quarter comps between a 6% decline and 1% growth, where the abnormally wide range underscores the exceedingly choppy demand environment.

Leadership Departures

Arhaus lost its CFO, COO, and SVP of IR in 2.5 months, which adds execution risk and impacts communication with the Street.

Profitability Challenges

The margin guide came in below expectations, suggesting potential challenges for the company's profitability.

Arhaus Business Overview & Revenue Model

Company Description

Arhaus, Inc. operates as a lifestyle brand and premium retailer in the home furnishings market. It provides merchandise assortments across various categories, including furniture, lighting, textiles, décor, and outdoor. The company's furniture products comprise bedroom, dining room, living room, and home office furnishings, which includes sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases and modular storage, etc.; and outdoor products include outdoor dining tables, chairs, chaises and other furniture, lighting, textiles, décor, umbrellas, and fire pits. It also offers lighting products, such as various distinct and artistic lighting fixtures, including chandeliers, pendants, table and floor lamps, and sconces; textile products comprising handcrafted indoor and outdoor rugs, bed linens, and pillows and throws; and décor products, including various wall art to mirrors, vases to candles, and other decorative accessories. The company distributes its products through an omni-channel model comprising showrooms, e-commerce platform, catalog, and in-home designer services. As of December 31, 2021, it operated through a network of 71 traditional showrooms, 5 Design Studios, and 3 Outlets, as well as 58 showrooms with in-home interior designers. The company was founded in 1986 and is headquartered in Boston Heights, Ohio.

How the Company Makes Money

Arhaus generates revenue primarily through the sale of its home furnishings and decor products. The company's key revenue streams include in-store sales from its network of retail locations and online sales through its website. Arhaus focuses on providing a differentiated shopping experience by offering exclusive, high-quality products that appeal to consumers seeking unique and sustainable home furnishings. Additionally, the company may engage in partnerships with global artisans, enhancing its product offerings and market appeal. Arhaus's focus on craftsmanship and sustainability helps differentiate its brand in the competitive retail market, driving customer loyalty and repeat business.

Arhaus Financial Statement Overview

Summary

Arhaus demonstrates solid revenue growth and strong cash flow generation. However, declining profit margins and high reliance on debt present risks. Focus on improving profitability and managing debt levels is essential for long-term stability.

Income Statement

Arhaus has demonstrated consistent revenue growth over the years, with a solid revenue increase from 2021 to TTM (Trailing-Twelve-Months). However, there has been a decline in EBIT margin and net profit margin in the TTM, which suggests rising operational costs or pricing pressures. The gross profit margin remains strong, indicating effective cost management in production.

Balance Sheet

The balance sheet shows a stable equity base with an improving debt-to-equity ratio, indicating balanced leverage. However, the equity ratio is relatively low, suggesting that the company relies significantly on debt for financing. Return on equity has seen a decline in recent periods, which could impact investor confidence if not addressed.

Cash Flow

Arhaus displays robust operating cash flow, consistently covering its capital expenditures. The free cash flow has shown positive growth, although the free cash flow to net income ratio indicates some volatility in cash generation relative to profits. Overall, cash flow health remains strong, supporting ongoing operations and growth initiatives.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.29B	1.27B	1.29B	1.23B	796.92M	507.43M
	Gross Profit
501.76M	501.23M	540.42M	525.06M	329.93M	199.50M
	EBIT
74.06M	87.00M	164.31M	184.67M	33.35M	31.16M
	EBITDA
136.79M	161.83M	227.06M	238.62M	57.74M	48.12M
	Net Income Common Stockholders
58.33M	68.55M	125.24M	136.63M	36.93M	17.84M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
214.39M	197.51M	223.10M	145.18M	123.78M	50.74M
	Total Assets
1.26B	1.21B	1.11B	931.79M	586.55M	315.94M
	Total Debt
524.91M	499.50M	462.93M	381.98M	50.52M	47.60M
	Net Debt
310.52M	301.99M	239.83M	236.80M	-73.25M	-3.14M
	Total Liabilities
916.11M	862.57M	773.86M	722.10M	516.78M	352.04M
	Stockholders Equity
348.83M	343.75M	340.24M	209.69M	69.77M	-36.09M
Cash Flow		Free Cash Flow
47.74M	39.74M	75.24M	21.80M	98.37M	137.42M
	Operating Cash Flow
156.80M	147.11M	172.30M	74.45M	146.24M	150.44M
	Investing Cash Flow
-101.22M	-99.53M	-96.72M	-52.66M	-47.87M	-13.01M
	Financing Cash Flow
-74.10M	-72.95M	-1.80M	-177.00K	-31.47M	-98.33M

Arhaus Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.74
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARHS, the sentiment is Negative. The current price of 8.74 is above the 20-day moving average (MA) of 8.69, above the 50-day MA of 8.37, and below the 200-day MA of 9.88, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 47.87 is Neutral, neither overbought nor oversold. The STOCH value of 38.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARHS.

Arhaus Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LZB	72 Outperform	$1.56B	16.28	9.84%	2.30%	1.81%	8.09%
HVT.A	71 Outperform	$327.16M	15.87	6.97%	5.91%	-12.29%	-55.73%
HVT	70 Outperform	$327.16M	15.83	6.97%	6.32%	-12.29%	-55.73%
ARHS	68 Neutral	$1.23B	20.54	18.39%	―	0.71%	-45.31%
Sector *	62 Neutral	$6.76B	11.07	2.80%	6.34%	2.68%	-24.87%
TTSH	60 Neutral	$276.88M	337.50	0.66%	―	-6.41%	-91.36%
MLKN	58 Neutral	$1.15B	39.82	2.28%	4.43%	-2.68%	-56.16%

Arhaus Corporate Events

Arhaus Announces Departure of Chief Merchandising Officer

On May 16, 2025, Arhaus, Inc. announced the separation of Lisa Chi, who previously served as the Chief Merchandising Officer. During the Annual Meeting of Stockholders held on May 15, 2025, Albert Adams, Stuart Burgdoerfer, John Kyees, and John Roth were elected as Directors, and the compensation for named executive officers and the selection of PricewaterhouseCoopers LLP as independent accountants were approved.

The most recent analyst rating on (ARHS) stock is a Hold with a $8.50 price target. To see the full list of analyst forecasts on Arhaus stock, see the ARHS Stock Forecast page.

Arhaus Reports Q1 2025 Revenue Increase Amid Challenges

Arhaus reported a 5.5% increase in net revenue to $311 million for the first quarter of 2025, despite a 67.6% drop in net income to $5 million. The company plans to expand its showroom projects and reduce China sourcing, reflecting a cautious outlook due to macroeconomic volatility and tariff-related challenges.

Arhaus Appoints Michael Lee as New CFO

On April 22, 2025, Arhaus, Inc. announced the appointment of Michael Lee as Chief Financial Officer, effective May 12, 2025. Michael Lee brings extensive experience from his previous roles at Ste. Michelle Wine Estates and Canopy Growth Corporation. His compensation package includes a base salary of $550,000, a sign-on bonus, and eligibility for incentive awards and stock units. This strategic appointment is expected to enhance Arhaus’s financial leadership and operational efficiency.

Arhaus Appoints New CIO Amid Leadership Changes

On April 7, 2025, Arhaus, Inc. announced the appointment of Allison Sutley as Chief Information Officer, effective April 14, 2025. Ms. Sutley brings extensive experience from her previous roles at Express, Inc., Cardinal Health, Inc., and Designer Brands Inc. This strategic appointment is expected to enhance Arhaus’s technological capabilities and operational efficiency. In connection with her new role, Ms. Sutley will receive a comprehensive compensation package, including a base salary, cash incentive awards, and stock units. The transition also involves the separation of Mr. Venkat Nachiappan from the company, who will receive severance and support for transitioning responsibilities.