Investment Thesis
Arhaus demonstrates solid fundamental strength with revenue growth of 8.5% YoY and healthy profitability margins (38.9% gross, 6.4% operating), supported by strong cash generation (FCF of $59M) and a fortress balance sheet with zero debt. However, net income declined slightly YoY despite revenue growth, and modest operating margins limit margin expansion potential in a competitive retail environment.
ARHS Strengths
- Strong balance sheet with $253.4M cash, zero long-term debt, and Debt/Equity of 0.00x providing financial flexibility
- Robust profitability with 38.9% gross margin and solid ROE of 16.1%, demonstrating efficient capital deployment
- Consistent cash generation with operating cash flow of $136.8M and free cash flow of $59M (4.3% FCF margin)
- Revenue growth of 8.5% YoY in competitive furniture retail sector shows market traction and execution capability
ARHS Risks
- Net income declined 1.9% YoY despite 8.5% revenue growth, suggesting margin compression or operational headwinds
- Quick ratio of 0.62x indicates potential liquidity constraints relative to current liabilities despite adequate current ratio
- Operating margin of only 6.4% provides limited buffer against cost pressures, supply chain disruptions, or economic downturn
- Furniture retail sector exposure to consumer discretionary spending and economic sensitivity
Key Metrics to Watch
- Gross margin trend - monitor for pricing power retention or input cost pressures
- Operating income growth rate relative to revenue growth to assess operational leverage
- Free cash flow conversion and maintenance of capital discipline given $77.9M capex
- Consumer demand indicators and same-store sales trends in furniture retail
ARHS Financial Metrics
ARHS Profitability Ratios
ARHS Balance Sheet & Liquidity
ARHS 5-Year Financial Trend
5-Year Trend Summary: Arhaus, Inc.'s revenue has grown significantly by 73% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.89 reflects profitable operations.
ARHS Growth Metrics (YoY)
ARHS Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $319.1M | $9.9M | $0.07 |
| Q2 2025 | $309.8M | $22.2M | $0.16 |
| Q1 2025 | $295.2M | $4.9M | $0.03 |
| Q3 2024 | $319.1M | N/A | $0.07 |
| Q2 2024 | $309.8M | N/A | $0.16 |
| Q1 2024 | $295.2M | N/A | $0.11 |
| Q3 2023 | $320.0M | N/A | $0.14 |
| Q2 2023 | $306.3M | N/A | $0.26 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ARHS Capital Allocation
ARHS SEC Filings
Access official SEC EDGAR filings for Arhaus, Inc. (CIK: 0001875444)