Arhaus (ARHS) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 net revenue of $345 million, up 8% year-over-year, driven by showroom expansion and strong demand from high-end clients; net and comprehensive income rose 23.1% to $12.2 million, with adjusted EBITDA up 35.2% to $31.2 million.

• Comparable growth was 4.1% for the quarter and 4.5% for the nine months, with demand comparable growth at 7.4% in Q3.

• September marked the highest total demand month in company history, fueled by new product launches and strong performance in upholstery and customization.

• Expanded showroom footprint, including the largest showroom in Pasadena, CA, and the first Montana showroom in Bozeman, with 103 showrooms in operation as of September 30, 2025.

• Remains debt-free with $262 million in cash and strong liquidity.

Financial highlights

• Gross profit for Q3 was $133.4 million, up 8.4% year-over-year; gross margin for the nine months was $397.2 million (39.2% of net revenue), flat year-over-year.

• SG&A expenses grew 4.1% to $117 million in Q3, with SG&A as a percentage of revenue at 32.4% for the nine months.

• Net income reached $12.2 million in Q3, up 23.1% year-over-year; net income for the nine months was $52.2 million.

• Adjusted EBITDA was $31.2 million in Q3 (9.1% margin), and $110.1 million for the nine months (10.9% margin).

• Net merchandising inventory increased 10.7% to $329 million since year-end 2024.

Outlook and guidance

• Full-year 2025 net revenue expected between $1.35B and $1.38B (+6.2%-8.6% YoY), with comparable growth flat to +2.5%.

• Net income guidance for 2025 is $58M-$68M; adjusted EBITDA $135M-$145M.

• Q4 2025 net revenue expected between $336M and $366M, with net income of $6M-$16M.

• Tariff impact for 2025 estimated at $12M, rising to $50M-$60M in 2026, net of mitigation but not pricing actions.

• Management expects operating cash flows to be sufficient for working capital and capital needs for at least the next 12 months.