Arhaus (ARHS) Q2 2025 earnings summary

Executive summary

• Achieved record quarterly net revenue of $358.4 million in Q2 2025, up 15.7% year-over-year, driven by operational improvements, strong brand positioning, and new showroom openings.

• Net and comprehensive income rose 57.7% to $35.1 million in Q2 2025, with adjusted EBITDA up 51.2% to $60.3 million and margin at 16.8%.

• Launched the Arhaus Bath Collection, marking a significant product category expansion.

• Operated 103 showrooms as of June 30, 2025, with continued disciplined expansion and eight projects completed year-to-date.

• Maintained a debt-free balance sheet with $235 million in cash and strong liquidity.

Financial highlights

• Comparable growth increased 10.5% year-over-year in Q2 2025, while demand comparable growth declined 3.6% but rebounded to 15.7% in July.

• Gross margin for Q2 2025 rose 19.1% to $148 million, with gross profit margin expanding 130 basis points to 41.4%.

• SG&A expenses grew 6.8% to $101 million in Q2 2025, with SG&A load decreasing to 28.3% of net revenue.

• Net merchandising inventory increased 4.7% to $311 million since year-end.

• Net income per diluted share was $0.25 for Q2 2025, up from $0.16 in Q2 2024.

Outlook and guidance

• Reaffirmed full-year 2025 guidance: net revenue $1.29–$1.38 billion, comparable growth -5% to +8.6%, net income $48–$68 million, Adjusted EBITDA $123–$145 million.

• Q3 2025 outlook: net revenue $320–$350 million, comparable growth -4% to +5%, net income $7–$17 million, Adjusted EBITDA $23–$33 million.

• Capital expenditures outlook for 2025 is $80–$100 million, reduced by $10 million due to updated investment timing.

• Outlook incorporates $12 million in incremental 2025 tariffs, mostly offset by sourcing shifts and vendor concessions.

• Operating cash flows expected to meet working capital and capital needs for at least the next 12 months.