Arhaus Reports First Quarter Financial Results

May 10, 2026  by Karen Parrish in Business Strategy, Industry   

First Quarter 2026 Highlights
Compared to the first quarter of 2025:

- Net revenue increased 0.9% to $314 million

- Gross margin decreased 1.0% to $114 million

- Selling, general and administrative expenses increased 1.9% to $112 million

- Net and comprehensive income decreased 54.5% to $2 million

- Adjusted EBITDA decreased 3.1% to $18 million

- Comparable Delivered Sales⁽¹⁾ decreased 1.7%

- Comparable Written Sales⁽²⁾ decreased 5.7%
 

John Reed, co-founder and CEO said, “We achieved the highest first-quarter net revenue in Arhaus history, reflecting the strength of our operating model, the resilience of our client base, and the disciplined execution of our team. While broader macro uncertainty created some near-term pressure on Comparable Written Sales, we saw meaningful improvement as the quarter progressed and remain confident in our long-term strategy, differentiated product leadership, and the significant opportunity ahead for Arhaus.”

Michael Lee, chief financial officer said, “While the operating environment is challenging, we remain disciplined in how we are managing the business, with a focus on controlling costs, prioritizing high-return investments, and maintaining flexibility while continuing to invest in the long-term growth of Arhaus. Based on the strength of our business and improving Comparable Written Sales trends, we remain confident in our full-year 2026 outlook and we are reaffirming our guidance. We want to thank our teams across Arhaus for their continued dedication and execution, and our shareholders for their ongoing support as we remain focused on driving long-term shareholder value.”

Business Highlights
First quarter net revenue was $314 million, an increase of 0.9% year-over-year and above the midpoint of the Company’s guidance range.

Comparable Delivered Sales⁽¹⁾ decreased 1.7% in the first quarter, above the midpoint of the Company’s guidance range. Comparable Written Sales⁽²⁾ decreased 5.7% in the first quarter.

Showroom Highlights
At the end of the first quarter of 2026, Arhaus operated 107 Showrooms across 31 states. In April, the Company opened a new Traditional Showroom in Ashburn, Virginia and in early May, Arhaus completed an expansion of its Park Meadows, Colorado showroom.

For 2026, the Company continues to expect to complete approximately 10 to 14 Total Showroom Projects⁽³⁾, 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 the year.

Balance Sheet and Liquidity
As of March 31, 2026, the Company reported the following:

- No long-term debt.

- Cash and cash equivalents totaled $177 million, a 30.1% decrease from December 31, 2025 to March 31, 2026. This primarily reflects the $49 million special cash dividend paid in March.

- Net merchandise inventory of $369 million, a 9.0% increase from December 31, 2025 to March 31, 2026.

- Client deposits of $271 million, a 15.0% increase from December 31, 2025 to March 31, 2026.

- Net cash used in operating activities totaled $10 million for the three months ended March 31, 2026.

- Net cash used in investing activities was $16 million for the three months ended March 31, 2026. Company-funded capital expenditures⁽⁵⁾ were $13 million and landlord contributions were $3 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. This was paid on March 31, 2026, to shareholders of record at the close of business on March 18, 2026.

Outlook
The Company is reaffirming its full-year 2026 outlook and providing second quarter 2026 guidance. While the Company continues to operate in a challenging environment, the Company remains confident in its full-year 2026 outlook.

As a reminder, the Company is also lapping a particularly strong second quarter in the prior year, where the Company successfully brought operations of its Dallas Distribution Center in-house which ramped ahead of schedule. This transition enabled the Company to convert strong first quarter demand into net revenue more efficiently and at a higher volume than expected. As a result, second quarter performance should be viewed in the context of this strong prior-year comparison.

Additionally, the Company’s current outlook does not include any benefit from potential IEEPA tariff refunds. As there is greater clarity and confirmation regarding those refunds, the Company will evaluate any impact and update guidance if necessary.

 Conference Call
Arhaus has scheduled a conference call to discuss the first quarter 2026 financial results scheduled for May 7 at 8:30 a.m. Eastern Time. 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.