Arhaus, Inc.

What they do

Arhaus designs and sources furniture, outdoor, bath, lighting, textiles and decor directly from a global network of nearly 400 vendors, and makes some upholstery at its own North Carolina facility. It sells through physical Showrooms, eCommerce and catalog, supported by design consultants and interior designers. As of December 31, 2025 it operated 107 Showrooms (90 Traditional, 9 Design Studios, 8 Lofts), and as of the end of Q2 2026 it operated 109 Showrooms across 31 states.

Revenue drivers

• Showroom retail — Physical Showrooms are the primary brand and sales channel; the Company operated 109 Showrooms across 31 states at the end of Q2 2026, including 90 Traditional Showrooms, 9 Design Studios and 8 Lofts as of December 31, 2025.
• eCommerce and catalog — eCommerce functions as an extension of the Showroom experience and is one of the company's integrated client touchpoints alongside Showroom and interior design.
• Product categories — Merchandise spans furniture, outdoor, bath, lighting, textiles and decor, with customization and custom upholstery called out as gaining momentum in Q2 2026.

Recent performance

For Q2 2026, net revenue rose 7.4% to $385 million, above the high end of guidance, and comparable delivered sales rose 4.0% while comparable written sales rose 12.5%. Gross margin increased 16.1% to $172 million and included a $23.8 million benefit from IEEPA tariff recoveries, of which $15.5 million related to inventory sold prior to April 2026. Net and comprehensive income rose 13.1% to $40 million, and adjusted EBITDA rose 16.8% to $70 million. Full-year 2025 net revenue was $1.38 billion with net income of $67.3 million, and gross margin declined to 38.9% from 39.4% in 2024.

Strategy

Management is focused on opening and repositioning Showrooms, with about 10 to 14 total Showroom projects expected in 2026, consisting of 4 to 6 new openings and 6 to 8 relocations, renovations or expansions, for mid-single-digit net unit growth. The company is investing in digital transformation and operational efficiency, and cited progress on those initiatives in Q2 2026. It continues to pursue customization and new product collections to drive client engagement. The company has no long-term debt and returned capital via a $49 million special cash dividend paid in March 2026.

Risks

• Tariff and trade policy exposure — Arhaus relies on foreign manufacturers and vendors for a significant portion of merchandise, and the Q2 2026 gross margin included a $23.8 million benefit from IEEPA tariff recoveries following a February 2026 Supreme Court ruling invalidating certain tariffs.
• Margin pressure — Gross margin declined to 38.9% in 2025 from 39.4% in 2024 and 42.0% in 2023, and net income fell to $67.3 million in 2025 from $125.2 million in 2023.
• Technology upgrade execution — The 10-Q risk factors cite challenges with planning or implementation of technology upgrades, including a new enterprise resource planning system.
• Consumer spending and housing — The 10-K and 10-Q cite declines in general economic conditions, consumer confidence and spending, and changes in the high-end housing market as risks that could reduce revenue.

Outlook

Management said Q2 2026 results came in above the high end of guidance across key financial metrics and expects to complete approximately 10 to 14 total Showroom projects in 2026, representing mid-single-digit net unit growth. The company expects to continue investing in digital transformation and operational efficiency. No specific numerical revenue or earnings guidance was disclosed in the excerpted materials.