Arhaus, Inc. Presents Second Quarter 2025 Financial Results

August 7, 2025  by Karen Parrish in Business Strategy, Industry   

Second Quarter 2025 Highlights

Net revenue increased 15.7% to $358 million, compared to the second quarter of 2024

Gross margin increased 19.1% to $148 million, compared to the second quarter of 2024

Selling, general and administrative expenses increased 6.8% to $101 million, compared to the second quarter of 2024

Net and comprehensive income increased 57.7% to $35 million, compared to the second quarter of 2024

Adjusted EBITDA increased 51.2% to $60 million, compared to the second quarter of 2024

Comparable growth⁽¹⁾ of 10.5%

Total Showroom Projects⁽²⁾ of 3 locations, inclusive of 2 relocations and 1 renovation

John Reed, Co-Founder and Chief Executive Officer, said, “We achieved the highest quarterly net revenue in Arhaus’ history, exceeding $358 million, reflecting an increase of 15.7%. This record reflects the strength of our brand, the loyalty of our clients, and the exceptional execution of teams across the business.”

“During the quarter, we successfully brought operations of our Dallas Distribution Center in-house which ramped ahead of schedule. This transition enabled us to convert strong first quarter demand into net revenue more efficiently, and at a higher volume, than expected. As a result, Comparable growth⁽¹⁾ was 10.5%.”

“While second-quarter Demand comparable growth⁽³⁾ was (3.6)%, due to macro headwinds, July rebounded sharply, with Demand comparable growth⁽³⁾ up an impressive 15.7%, highlighting strong client engagement and the enduring appeal of our products. Year-to-date, including July, Demand comparable growth⁽³⁾ was up 2.2%.”

“Additionally, I’m proud to announce the launch of our Arhaus Bath Collection. This thoughtful expansion into a deeply personal space in the home reflects our commitment to timeless design, artisan craftsmanship, and functional beauty.”

“With a resilient high-end client base, debt-free balance sheet, and a clear strategic plan, we are navigating the current environment from a position of strength, focused on what we can control: disciplined execution, intentional growth, and continued investment in the systems, products, and talent that will drive our next phase.”

Reed concluded, “Thank you to our teams, your creativity, care, and commitment make moments like this possible. Your passion is what brings Arhaus to life.”

Business Highlights

Arhaus delivered strong second-quarter results, with net revenue exceeding $358 million, up 15.7% and setting a new record for the highest quarterly net revenue in Company history. In the second quarter, Comparable growth⁽¹⁾ was 10.5%, driven by the successful conversion of strong first-quarter demand, while Demand comparable growth⁽³⁾ was (3.6)%, reflecting macroeconomic volatility and external headwinds.

Looking ahead, Demand comparable growth⁽³⁾ in July was up 15.7%, reflecting strong client engagement and the strength of the Arhaus product assortment. Year-to-date, including July, Demand comparable growth⁽³⁾ was 2.2%.

Showroom Highlights

At the end of the second quarter of 2025, Arhaus operated 103 Showrooms across 30 states and all four geographic regions. During the quarter, the Company completed 3 Total Showroom Projects⁽²⁾, including 2 relocations and 1 renovation. Notable updates include:

• Wexford, Pennsylvania – A relocated showroom opened in Wexford Plaza, a premium open-air retail destination. The expansive, newly designed space features a dedicated design room and extensive fabric library, serving a key affluent suburb of Pittsburgh and reinforcing Arhaus’ luxury positioning.
   
• Scottsdale, Arizona – A fully renovated showroom at Kierland Commons. Originally opened in 2015, this renovated space more closely reflects the Arhaus aesthetic, blending international design elements with American craftsmanship to create an eclectic, elevated experience.

Year-to-date through the second quarter, Arhaus has completed 8 showroom projects, including 1 new opening, 6 relocations, and 1 renovation. The Company continues to expect the completion of approximately 12 to 15 Total Showroom Projects⁽²⁾ in 2025, consisting of 4 to 6 new openings and 8 to 9 relocations, renovations, or expansions.

Balance Sheet and Liquidity

As of June 30, 2025, the Company reported the following:

• No long-term debt.
• Cash and cash equivalents totaled $235 million.
• Net merchandise inventory of $311 million, a 4.7% increase from December 31, 2024 to June 30, 2025.
• Client deposits of $233 million, a 5.5% increase from December 31, 2024 to June 30, 2025.
• Net cash provided by operating activities totaled $81 million for the six months ended June 30, 2025.
• Net cash used in investing activities was approximately $42 million for the six months ended June 30, 2025. Company-funded capital expenditures⁽⁴⁾ were approximately $31 million and landlord contributions were approximately $11 million.

Outlook

The table below reaffirms Arhaus’ previously provided expectations for selected full-year 2025 financial and operating metrics. This outlook reflects currently implemented tariff actions as of the date of this release. The Company has also modestly reduced its full-year capital expenditures outlook by $10 million to reflect updated timing on select investments. In addition, Arhaus is introducing third-quarter 2025 guidance for select financial metrics, as detailed below.