Arhaus, Inc. Reports Fourth Quarter and Full Year 2024 Results

February 26, 2025  by Karen Parrish in Business Strategy, Industry   

— Net revenue was $347 million in the fourth quarter and $1,271 million for the full year of 2024.
— Gross margin decreased 1.8% to $139 million in the fourth quarter and decreased 7.3% to $501 million for the full year of 2024.
— Selling, general and administrative expenses increased 11.1% to $111 million in the fourth quarter and increased 10.5% to $415 million for the full year of 2024.
— Net and comprehensive income of $21 million in the fourth quarter and $69 million for the full year of 2024.
— Adjusted EBITDA was $41 million in the fourth quarter and $133 million for the full year of 2024.
— Comparable growth(1) of (6.4)% in the fourth quarter and (8.0)% for the full year of 2024.
— Demand comparable growth(2) of 5.7% in the fourth quarter and (2.2)% for the full year of 2024.
— Showroom growth to 103 locations, as of December 31, 2024, inclusive of 11 new showroom openings and 5 strategic relocations in key growth markets for the full year of 2024.

John Reed, co-founder and chief executive officer, said, “2024 was a transformative year for Arhaus, driven by disciplined execution of our strategy, record showroom expansion, and continued brand momentum. We celebrated a historic milestone by opening our 100th showroom, expanding to a total of 103 locations across 30 states at year end—our largest one-year expansion in nearly 40 years through new openings and relocations."

"With $198 million in cash and a debt-free balance sheet, we are well-positioned to invest in our long-term growth strategy. Looking ahead to 2025, demand comparable growth looks solid with positive client engagement. I am incredibly proud of our team's dedication and excited about the opportunities ahead as we continue to elevate the Arhaus brand and deliver exceptional value and a premium product to our clients and shareholders.”

Operational Highlights
Fourth quarter comparable growth(1) was (6.4)%, primarily due to lapping the impact of abnormal backlog fulfillment in the prior year, while demand comparable growth(2) was 5.7%, driven by the strength of the Company’s product assortment, marketing initiatives, and planned promotions.

Full-year comparable growth(1) was (8.0)%, primarily due to lapping the impact of abnormal backlog fulfillment in the prior year, and demand comparable growth(2) was (2.2)% due to softness in the second and third quarters. On a two-year stacked(3) basis, demand comparable growth(2) was 5.5%, underscoring the resilience of the Arhaus brand and omnichannel strategies.

Showroom Highlights
In 2024, the Company expanded its showroom footprint to 103 showrooms across 30 states and all four geographic regions, with 11 new openings and 5 strategic relocations in key growth markets. Showroom highlights include:

Greenwich, Connecticut – The Company’s third location in the state situated just above Greenwich Avenue in the downtown shopping district.

Oklahoma City, Oklahoma – The Company’s first location in the state strategically positioned within a premier mixed-use luxury development.

Palm Desert, California – An expanded showroom located in the heart of the Coachella Valley.

Los Angeles, California – Located at The Grove, an iconic shopping center, further strengthening the Company’s presence in California.

Corte Madera, California – The Company’s largest retail location in the state and the 14th in California.

The Company’s long-term strategy remains focused on opening an average of five to seven new Traditional Showrooms annually, along with additional Design Studios and showroom relocations. The Company has a robust pipeline in place toward its goal of 165 Traditional Showrooms.

Outlook
The Company is providing the following outlook for selected full year and first quarter 2025 financial operating results.

Full Year 2025 Projections: Net revenue is projected to be $1.36 billion to $1.40 billion; Comparable growth, 0% to 3%; Net income, $63 million to $73 million; and Adjusted EBITDA, $140 million to $150 million.

The Q1 2025 Projections are: Net revenue is projected to be $303 million to $323 million; Comparable growth, (6)% to 1%; Net income, $3 million to $10 million, and Adjusted EBITDA, $17 million to $27 million.

Other Estimates
Company-funded capital expenditures from $90 million to $110 million
Fully diluted shares of ~141 million
Effective tax rate of ~26%
& Showroom openings of 3 to 5 new showrooms

Conference Call
A recorded replay of the conference call will be available online at http://ir.arhaus.com for approximately twelve months.