Arhaus (ARHS) Q4 2024 earnings summary

Executive summary

• Achieved record showroom growth in 2024, expanding to 103 locations across 30 states, with 11 new openings and five relocations, marking the largest expansion in nearly 40 years.

• Maintained strong brand differentiation through artisan-crafted products, direct sourcing, and a vertically integrated model, driving customer loyalty and sustainable performance.

• Omnichannel strategy and marketing initiatives fueled higher engagement, with e-commerce as the fastest-growing revenue channel and in-home design services delivering 4x higher order values.

• Product innovation and new launches remain a core focus, with a robust pipeline of new designs and customization options planned for 2025.

• Ended 2024 with $198 million in cash and no long-term debt, positioning for continued investment in growth.

Financial highlights

• Q4 2024 net revenue was $347 million, up 0.9% year-over-year; full year net revenue was $1.271 billion, down 1.3% year-over-year.

• Q4 demand comparable growth was 5.7%, but full year demand comp declined 2.2% due to softness in Q2 and Q3.

• Q4 gross margin declined 1.8% to $139 million, with gross margin as a percentage of net revenue down 100 bps to 40.0%.

• Q4 net income decreased 31.8% to $21 million; Adjusted EBITDA declined 19.6% to $41 million (margin 11.9%).

• Full year net income decreased 45.3% to $69 million; Adjusted EBITDA declined 34.5% to $133 million (margin 10.5%).

• SG&A expenses rose 11.1% in Q4 and 10.5% for the year, totaling $111 million and $415 million, respectively.

Outlook and guidance

• 2025 net revenue expected between $1.36 billion and $1.40 billion, with comparable growth of 0%-3%.

• Q1 2025 net revenue guidance is $303–$323 million, with comparable growth of -6% to +1%.

• Full year 2025 Adjusted EBITDA expected between $140 million and $150 million; Q1 Adjusted EBITDA between $17 million and $27 million.

• 2025 net income projected at $63–$73 million.

• Guidance incorporates known tariff impacts and assumes a macro environment similar to 2024.