Arhaus Releases Fourth Quarter and Full Year Financial Results

February 26, 2026  by Karen Parrish in Business Strategy, Industry   

Full Year 2025 Highlights

— Net revenue increased 8.5% to $1,379 million, compared to the full year of 2024

— Gross margin increased 7.0% to $536 million, compared to the full year of 2024

— Selling, general and administrative expenses increased 7.7% to $447 million, compared to the full year of 2024

— Net and comprehensive income decreased 1.9% to $67 million, compared to the full year of 2024

— Adjusted EBITDA increased 8.9% to $145 million, compared to the full year of 2024

— Comparable Delivered Sales⁽¹⁾ of 3.6%

— Comparable Written Sales⁽²⁾ of 1.3%

— Total Showroom Projects⁽³⁾ of 13 including 5 new Showroom openings, 7 relocations, and 1 renovation for the full year of 2025

— Net Unit Growth⁽⁴⁾ of 3.9% for 2025

Special cash dividend of $0.35 per share on the Company's Class A and Class B common stock, payable on March 31, 2026, to shareholders of record at the close of business on March 18, 2026

John Reed, Co-Founder and Chief Executive Officer, said:
“The Arhaus team delivered record net revenue of $1.38 billion in 2025, an increase of 8.5%, underscoring the strength and durability of our differentiated model rooted in artisan craftsmanship and heirloom-quality design. This performance was driven by continued expansion of our Showroom footprint and strong client engagement across our integrated omni-channel model.

Comparable Written Sales⁽²⁾ increased 1.3% for the full year and Comparable Delivered Sales⁽¹⁾ increased 3.6%. These results reflect the continued demand of our product and our strong execution across our supply chain and fulfillment network.

Looking ahead to 2026, our Spring collection represents one of the most innovative and expressive assortments we have introduced in our history. It reflects the creative evolution of the Arhaus brand while remaining grounded in the materials, craftsmanship, and timelessness that define us.

Our results this year would not be possible without the extraordinary dedication of our teams across the company. I am deeply grateful for their focus, creativity, and disciplined execution in 2025. Forty years in, and in many ways, we are just getting started.”

Michael Lee, Chief Financial Officer, said:
“This marks the second time Arhaus has issued a special cash dividend since our initial public offering, reflecting our strong financial performance in 2025 and the strength of our cash position and debt-free balance sheet. We generated strong cash flow during the year and finished 2025 with $253 million in cash and cash equivalents, an increase of 28.3% from the prior year, further enhancing our financial flexibility.

Given our strong cash generation and balance sheet position, our Board of Directors approved a special cash dividend of $0.35 per share. This distribution reflects our disciplined capital allocation strategy, balancing investment in showroom growth, technology, and distribution infrastructure with returning excess capital to shareholders.

Following the distribution, we will remain debt-free with substantial liquidity to support our long-term growth strategy. As we enter 2026, we remain focused on driving profitable growth, maintaining financial strength, and delivering sustainable long-term value for our shareholders.”

Business Highlights
In 2025, Arhaus delivered record net revenue of $1,379 million, an increase of 8.5% and at the high-end of the Company’s guidance range. This record net revenue was driven by net revenue contributions from new Showroom openings and increased demand for products.

Comparable Delivered Sales⁽¹⁾ increased 3.6% for the full year, above the high end of the Company’s guidance range, reflecting healthy underlying client demand and strong operational execution across the Company’s distribution network. Ongoing investments in Arhaus’ distribution network and technology infrastructure continue to enhance efficiency and strengthen the overall client experience.

Comparable Written Sales⁽²⁾ increased 1.3% for the full year, reflecting the underlying health and resilience of the business.

Showroom Highlights
In the fourth quarter, the Company opened 4 new Showrooms in Pasadena, California; Bozeman, Montana; San Diego, California; and Stafford, a suburb of Houston, Texas. In addition, the Company relocated 1 Showroom in Edina, a suburb of Minneapolis, Minnesota. Notable updates include:

Pasadena, California – The Company opened its largest Traditional Showroom to date in Pasadena, California, spanning nearly 40,000 square feet in the historic Penn Oil Building. The century-old property was thoughtfully restored to honor its architectural heritage. The Showroom features the Company’s full product assortment, extensive custom upholstery offerings, and best-in-class design team.

Bozeman, Montana – The Company opened a new Traditional Showroom in Bozeman, Montana, located in a lifestyle-rich setting surrounded by mountain views, where design and the outdoors are connected.

San Diego, California – The Company opened a new Traditional Showroom in San Diego, California spanning nearly 20,000 square feet. The Fashion Valley showroom is located in one of Southern California’s premier shopping destinations.

At the end of the fourth quarter of 2025, Arhaus operated 107 Showrooms across 31 states and all four geographic regions. During the year, the Company completed 13 Total Showroom Projects⁽³⁾, including 5 new openings, 7 relocations, and 1 renovation, consistent with the Company’s full-year guidance. Net Unit Growth⁽⁴⁾ was 3.9% for the full year of 2025.

Looking ahead, the Company expects to complete approximately 10 to 14 Total Showroom Projects⁽³⁾ in 2026, consisting of 4 to 6 new openings and 6 to 8 relocations, renovations, or expansions, representing Net Unit Growth⁽⁴⁾ of mid-single-digits for 2026.

Balance Sheet and Liquidity

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

— No long-term debt.

— Cash and cash equivalents totaled $253 million, a 28.3% increase from December 31, 2024, to December 31, 2025.

— Net merchandise inventory of $339 million, a 14.1% increase from December 31, 2024, to December 31, 2025.

— Client deposits of $236 million, a 6.8% increase from December 31, 2024, to December 31, 2025.

— Net cash provided by operating activities totaled $137 million for the full year ended December 31, 2025.

— Net cash used in investing activities was approximately $78 million for the full year ended December 31, 2025. Company-funded capital expenditures⁽⁵⁾ were approximately $57 million, and landlord contributions were approximately $21 million.

Special Cash Dividend

On February 17, 2026, the Board of Directors of the Company declared a special cash dividend on the Company’s Class A and Class B common stock of $0.35 per share, payable on March 31, 2026, to shareholders of record at the close of business on March 18, 2026.

Updates to Disclosures and Reporting

Comparable Sales Metrics

The Company is refining the naming and presentation of its comparable sales metrics.

Comparable Delivered Sales⁽¹⁾ previously referred to as “Comparable Growth” is a key performance indicator and is defined as the year-over-year percentage change of the dollar value of orders delivered (based on purchase price), net of the dollar value of returns (based on amount credited to client), from our comparable Showrooms and eCommerce, including through our catalogs and other mailings.

Comparable Written Sales⁽²⁾ previously referred to as “Demand Comparable Growth” is a key performance indicator and is defined as the year-over-year percentage change of written sales from our comparable Showrooms and eCommerce, including through our catalogs and other mailings.

Showroom Growth and Real Estate Disclosures

The Company has made enhancements to its Showroom growth and real estate disclosures. These updates provide additional context on the Company’s long-term Showroom strategy and economics.

Additional detail is provided in the Company’s Investor Relations presentation which is available on the Company’s website at http://ir.arhaus.com. Supporting schedules are included in this earnings release.

Conference Call

A recorded replay of the conference call is available at the conclusion of the call and can be accessed online at http://ir.arhaus.com for approximately twelve months.