Arhaus, Inc. Reports First Quarter 2025 Financial Results

May 8, 2025  by Karen Parrish in Business Strategy, Industry   

Net revenue increased 5.5% to $311 million compared to the same period in 2024

Gross margin increased 0.4% to $116 million compared to the same period in 2024

Selling, general and administrative expenses increased 13.9% to $110 million compared to the same period in 2024

Net and comprehensive income decreased 67.6% to $5 million compared to the same period in 2024

Adjusted EBITDA decreased 36.2% to $19 million compared to the same period in 2024

Comparable growth⁽¹⁾ of (1.5)%

Demand comparable growth⁽²⁾ of 4.1%

Total Showroom Projects⁽³⁾ of 5 locations, inclusive of 1 new Traditional Showroom opening and 4 strategic relocations.

John Reed, Co-Founder and Chief Executive Officer, said:

“We’re pleased with our first quarter performance, which met our expectations despite continued macroeconomic volatility—underscoring the strength of our brand and the resilience of our business model.

As we look ahead, we’re focused on what we can control: executing with discipline, investing strategically, and expanding our showroom footprint to support long-term, profitable growth. In 2025, we plan to have 12 to 15 Total Showroom Projects⁽³⁾ and expect to reduce China sourcing to approximately 1% of Total Receipts⁽⁴⁾ in the fourth quarter.

While we revised our full-year outlook to reflect the broader uncertainty, we remain confident in our business—supported by a strong balance sheet, operational agility, and the momentum of our growth strategy. I’m proud of what we’ve accomplished and even more excited about the opportunities ahead.”

Operational Highlights

First quarter comparable growth⁽¹⁾ was (1.5)%, near the midpoint of the Company’s expectations. Demand comparable growth⁽²⁾ was 4.1%, driven by healthy client engagement and the ongoing success of the Company’s product assortment, marketing initiatives, and planned promotions. The Company is pleased with the overall strength of the quarter.

Showroom Highlights

In the first quarter 2025, the Company’s showroom footprint was 103 Showrooms across 30 states and all four geographic regions. The Company completed 5 Showroom Projects, including 1 new showroom opening and 4 strategic relocations. Showroom highlights include:

Winter Park, Florida – A new Traditional showroom opened in Winter Park Village, an upscale lifestyle center.

Sarasota, Florida – A relocated showroom opened in Center Point at Waterside, a key Florida market.

Burlingame, California – A relocated showroom in downtown Burlingame tailored to the local clientele.

Including these 5 Showroom Projects, the Company expects to complete approximately 12 to 15 Total Showroom Projects⁽³⁾ in 2025, opening 4 to 6 new Showrooms, along with 8 to 9 strategic relocations, remodels, or expansions.

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.

Balance Sheet and Liquidity

As of March 31, 2025, the Company reported the following:

No long-term debt.

Cash and cash equivalents totaled $214 million.

Net merchandise inventory of $301 million, a 1.5% increase from December 31, 2024, to March 31, 2025.

Client deposits of $263 million, a 19.2% increase from December 31, 2024, to March 31, 2025.

Net cash provided by operating activities totaled $47 million for the first quarter 2025.

Net cash used in investing activities was approximately $28 million. Company-funded capital expenditures⁽⁵⁾ were approximately $22 million, and landlord contributions were approximately $6 million.

Conference Call

There will be a conference call on May 8, 2025. A recorded replay of the conference call will be available within approximately three hours of the conclusion of the call and can be accessed online at http://ir.arhaus.com for approximately twelve months.