Arhaus (ARHS) Q4 2025 earnings summary

Executive summary

• Achieved record net revenue of $1.38 billion in 2025, up 8.5% year-over-year, nearly tripling since 2019, driven by showroom expansion, high-end client demand, and omni-channel engagement.

• Net income reached $67 million, quadrupling since 2019, with adjusted EBITDA at $145 million, up 8.9% year-over-year and 190% since 2019.

• Ended 2025 with $253 million in cash and no long-term debt, supporting disciplined growth and capital allocation.

• Expanded to 107 showrooms, a 53% increase since 2019, with 13 showroom projects completed and significant runway for further expansion.

• Announced a special cash dividend of $0.35 per share, the second since IPO, reflecting strong free cash flow and disciplined capital allocation.

Financial highlights

• Gross profit reached $536 million, up 7% year-over-year; gross margin declined 50 bps to 38.9% due to higher showroom occupancy costs.

• Q4 2025 net revenue was $365 million, up 5.1% year-over-year, setting a new quarterly record.

• Comparable Written Sales grew 1.3% and Comparable Delivered Sales rose 3.6% for the year.

• Free cash flow was $59 million; cash and equivalents totaled $253 million, up 28.3% year-over-year.

• Adjusted EBITDA was $145 million, up 8.9% year-over-year; adjusted EBITDA margin flat at 10.5%.

Outlook and guidance

• 2026 net revenue expected between $1.43 billion and $1.47 billion (+3.7% to +6.6% year-over-year); net income guidance $66 million–$75 million; adjusted EBITDA $150 million–$161 million.

• Comparable Delivered Sales expected to grow 0%–3% in 2026.

• Q1 2026 net revenue expected between $300 million and $320 million (-3.7% to +2.8% year-over-year), with softness attributed to weather and catalog delays.

• Plans for 10–14 showroom projects in 2026, including 4–6 new openings and mid-single-digit net unit growth.

• Tariff impacts for 2026 estimated at $30–$40 million, with ongoing mitigation through sourcing and pricing.