Arhaus (ARHS) Q2 2026 earnings summary

Executive summary

• Q2 2026 net revenue reached a record $385 million, up 7.4% year-over-year, with 12.5% growth in Comparable Written Sales and 4.0% in Comparable Delivered Sales, reflecting strong demand and broad-based growth across channels and regions.

• Gross margin increased 16.1% to $172 million, benefiting from a $23.8 million IEEPA tariff recovery, and net income rose 13.1% to $40 million.

• Adjusted EBITDA was $70 million, up 16.8% year-over-year; excluding the one-time tariff benefit, adjusted EBITDA was $55 million, down 8.9%.

• Strong engagement from core customers, interior design, and trade channels, with no evidence of trade-down and thousands of new trade members added monthly.

• Continued showroom expansion, including new and relocated locations, supporting brand awareness and conversion, with 109 showrooms in 31 states as of June 2026.

Financial highlights

• Net revenue for Q2 2026 was $385 million, the highest in company history, up 7.4% year-over-year.

• Gross margin for Q2 2026 was 44.7% (including tariff benefit); normalized at 40.7%, down 70 bps year-over-year due to higher fuel and shipping costs.

• Net income margin for Q2 2026 was 10.3%; adjusted EBITDA margin was 18.3% (including tariff benefit), normalized at 14.3%, down 250 bps year-over-year.

• SG&A expenses rose 16.1% year-over-year, driven by investments in technology, new showrooms, and marketing.

• Ended Q2 with $226 million in cash and $354 million in inventory; client deposits up 11.8% year-over-year.

Outlook and guidance

• Full-year 2026 net revenue expected between $1.43 billion and $1.47 billion, up 3.7%–6.6% year-over-year.

• Net income guidance raised to $71–$80 million and adjusted EBITDA to $160–$171 million, reflecting tariff recovery.

• Q3 2026 net revenue expected at $355–$375 million, with net income of $8–$13 million and adjusted EBITDA of $26–$34 million.

• Guidance assumes no significant improvement in housing turnover or macroeconomic environment.

• Capital expenditures for 2026 projected at $70–$90 million, focused on new showrooms and IT infrastructure.