Arhaus, Inc. (NASDAQ:ARHS) Q2 2024 Results Conference Call August 8, 2024 8:30 AM ET Company Participants Wendy Watson - Senior Vice President of Investor Relations John Reed - Co-Founder, Chairman and Chief Executive Officer Dawn Phillipson - Chief Financial Officer Jennifer Porter - Chief Marketing Officer Conference Call Participants Simeon Gutman - Morgan Stanley Max Rakhlenko - TD Cowen Steven Forbes - Guggenheim Securities Seth Sigman - Barclays Robby Ohmes - Bank of America Sabrina Baxamusa - William ...

Arhaus, Inc. (ARHS) came out with quarterly earnings of $0.16 per share, beating the Zacks Consensus Estimate of $0.13 per share. This compares to earnings of $0.29 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 23.08%. A quarter ago, it was expected that this company would post earnings of $0.02 per share when it actually produced earnings of $0.11, delivering a surprise of 450%.Over the last four quarters, the company has s ...

Financial Performance - For the six months ended June 30, 2024, the company generated $605.0 million in net revenue, with a gross margin of $239.4 million and a net income of $37.3 million[106]. - For the three months ended June 30, 2024, net revenue was $309.8 million, gross margin was $124.4 million, and net income was $22.2 million[106]. - Net revenue decreased by $12.5 million, or 2.0%, to $605.0 million for the six months ended June 30, 2024, compared to $617.5 million for the same period in 2023[126]. - Gross margin decreased by $29.0 million, or 10.8%, to $239.4 million for the six months ended June 30, 2024, with a gross margin percentage of 39.6% compared to 43.5% in 2023[127][128]. - Net and comprehensive income decreased by $37.0 million to $37.3 million for the six months ended June 30, 2024, compared to $74.3 million in 2023[132]. - For the three months ended June 30, 2024, net revenue decreased by $3.1 million, or 1.0%, to $309.8 million compared to $312.9 million in 2023[133]. Showroom Operations - As of June 30, 2024, the company operated 97 Showrooms, an increase from 92 Showrooms at December 31, 2023[105]. - The total square footage of Showroom locations increased to 1,550 thousand square feet as of June 30, 2024, compared to 1,438 thousand square feet at December 31, 2023[106]. - Total showrooms increased from 92 at the beginning of the period to 97 at the end of the period[124]. Expenses and Costs - Selling, general and administrative (SG&A) expenses increased by $22.8 million, or 13.5%, to $191.7 million for the six months ended June 30, 2024, representing 31.7% of net revenue[129]. - SG&A expenses for the three months ended June 30, 2024, increased by $8.9 million, or 10.3%, to $95.0 million, representing 30.7% of net revenue[135][136]. - Selling, general and administrative expenses are expected to increase as the company opens new Showrooms and develops new product categories[114]. Cash Flow and Investments - For the six months ended June 30, 2024, net cash provided by operating activities was $84.3 million, an increase of 31.5% compared to $64.2 million for the same period in 2023[148][149]. - The net cash used in investing activities for the six months ended June 30, 2024, was $62.2 million, up from $34.9 million in the same period of 2023, reflecting increased investments in Showrooms and supply chain[150][151]. - Total capital expenditures, net of landlord contributions, increased by $16.0 million to $40.2 million for the six months ended June 30, 2024, compared to $24.3 million in 2023[153]. - Net cash used in financing activities was $71.1 million for the six months ended June 30, 2024, primarily due to the payment of a special dividend, compared to $0.5 million in 2023[155]. - The company anticipates total company-funded capital expenditures to be between $80 million and $100 million in fiscal year 2024, primarily for opening new Showrooms[154]. Financial Position and Risks - As of June 30, 2024, the company had cash and cash equivalents of $174.2 million[140]. - The company faces risks including supply chain constraints, competition, and changes in consumer preferences that could impact future performance[101]. - The company has not drawn upon the 2021 Credit Facility as of June 30, 2024, indicating a stable financial position regarding interest rate risk[160]. - The company does not currently use derivative instruments to manage foreign currency exchange or interest rate risks, which may expose it to potential cost increases[159][160]. Other Financial Metrics - Adjusted EBITDA for the six months ended June 30, 2024, was $68.999 million, down from $118.586 million for the same period in 2023[118]. - Interest income, net increased to $2.0 million for the six months ended June 30, 2024, compared to $0.7 million in 2023[130]. - Income tax expense decreased to $12.6 million for the six months ended June 30, 2024, compared to $26.5 million in 2023[131]. - The increase in cash from operating activities was driven by a net income of $37.3 million and an increase in non-cash items of $57.6 million for the six months ended June 30, 2024[148]. - Cash used from working capital for the six months ended June 30, 2024, was primarily due to a $19.3 million increase in merchandise inventory and a $11.5 million increase in prepaid and other assets[148]. - The company experienced a significant increase in client deposits of $36.5 million and accounts payable of $4.6 million during the six months ended June 30, 2024[148].

ARHAUS vour home ARHAUS ANNOUNCES SECOND QUARTER 2024 FINANCIAL RESULTS Net Revenue of $310 million, Net Income of $22 million and Adjusted EBITDA of $40 million Opened Five New Showrooms in the Second Quarter Lowering Full Year 2024 Outlook BOSTON HEIGHTS, Ohio—August 8, 2024—Arhaus, Inc. (NASDAQ: ARHS; "Arhaus" or the "Company"), a rapidly growing lifestyle brand and omni-channel retailer of premium artisan-crafted home furnishings, reported financial results for the second quarter ended June 30, 2024. | ...

BOSTON HEIGHTS, Ohio, Aug. 02, 2024 (GLOBE NEWSWIRE) -- Arhaus, a leader in artisan-crafted furniture and home décor, announces the opening of its new 7,085 square-foot Studio at The Avenue Peachtree City in Peachtree City, Georgia. Located in South Metro Atlanta, Arhaus promises an inspiring destination for high-quality furniture and home décor alongside the center's shopping, dining and entertainment offerings. Arhaus' Peachtree City Studio marks the brand's first Design Studio in Georgia and is the third ...

BOSTON HEIGHTS, Ohio, Aug. 02, 2024 (GLOBE NEWSWIRE) -- Arhaus, a leader in artisan-crafted furniture and home décor, announces the opening of its new 7,085 square-foot Studio at The Avenue Peachtree City in Peachtree City, Georgia. Located in South Metro Atlanta, Arhaus promises an inspiring destination for high-quality furniture and home décor alongside the center’s shopping, dining and entertainment offerings. Arhaus’ Peachtree City Studio marks the brand’s first Design Studio in Georgia and is the third ...

Group 1 - Arhaus will release its second quarter 2024 financial results on August 8, 2024, before market open [1] - A conference call will be held at 8:30 a.m. Eastern Time on the same day to discuss financial and operational results [1] - Investors can access the press release and conference call webcast on the Company's website [1] Group 2 - Arhaus is a rapidly growing lifestyle brand and omni-channel retailer of premium home furnishings, founded in 1986 [3] - The company offers a unique assortment of heirloom quality products that are sustainably sourced and built to last [3] - Arhaus operates more than 95 showroom and design studio locations across the United States and provides complimentary in-home design services [3]

Company Overview - Arhaus is a leader in artisan-crafted furniture and home décor, founded in 1986, and operates as a rapidly growing lifestyle brand and omni-channel retailer [4] - The company has more than 95 showroom and design studio locations across the United States, offering a differentiated proprietary model that directly designs and sources products from leading manufacturers and artisans [4] New Showroom Opening - Arhaus has opened a new 16,160 square-foot showroom at Stanford Shopping Center in Palo Alto, California, marking its thirteenth location in California and seventh opened within the past year as part of its West Coast expansion [1] - The showroom is positioned as an inspiring destination for high-quality furniture and home décor, complementing the open-air center's array of premier shops and eateries [1] Design Services - The Palo Alto location offers complimentary design services to clients, assisting with home projects of any scale, from single spaces to entire homes [2] - A team of seasoned design consultants is available to provide guidance both in-store and online [2] Community Contribution - In celebration of the showroom opening, Arhaus will contribute $10,000 to American Forests, the oldest nonprofit conservation organization in the U.S., as part of its Green Initiative [2] - The company emphasizes its commitment to sustainable principles and support for American Forests and its mission [2]

Core Insights - Arhaus has opened a new 16,160 square-foot showroom at Stanford Shopping Center in Palo Alto, California, marking its thirteenth location in California and seventh opened in the past year as part of its West Coast expansion [1][2] Company Overview - Founded in 1986, Arhaus is a rapidly growing lifestyle brand and omni-channel retailer specializing in premium home furnishings, offering a unique assortment of heirloom quality products that are sustainably sourced and built to last [4] - The company operates more than 95 showroom and design studio locations across the United States and provides complimentary in-home design services through a team of interior designers [4] Services Offered - The Palo Alto location provides complimentary design services to assist clients with home projects of any scale, whether it involves reviving a single space or furnishing an entire home [2] Community Engagement - To celebrate the showroom opening, Arhaus will contribute $10,000 to American Forests, supporting its mission of nurturing healthy and resilient forests [2]

Group 1 - Stifel analyst Andrew Carter initiated coverage on Arhaus, Inc. (ARHS) with a Buy rating and a price forecast of $19.5, citing successful execution and revenue growth post-COVID [1] - The current discount to retail peers undervalues Arhaus's growth outlook, as the company is in the midst of its primary expansion initiative [1] - The analyst also initiated coverage on RH (RH) with a Buy rating and a forecast of $315, noting that RH capitalized on the COVID surge but has faced scrutiny due to a 68% decline in shares from the August 2021 peak [1] Group 2 - The current discount valuation to specialty retail peers on an FY25E EBITDA basis is compelling, with ARHS at 9.4x, RH at 9.5x, and specialty retail peers at 11.3x [2] - Both companies are distinguished by their premium focus, scale, and national networks, enabling above-average retail operating margins with estimated product margins in the mid-to-high 60s [2] - 57% of U.S. households are within 50 miles of ARHS/RH showrooms, which are difficult to replicate, and both companies are expanding from strong positions [2] Group 3 - For Arhaus, the estimated FY26E revenue is $1.6 billion, with a CAGR of 7.4% from FY23 to FY26, while the operating margin is expected to remain relatively flat due to ongoing investments [3] - For RH, the estimated FY26E revenue is $3.96 billion, with a CAGR of 8.6% from FY23 to FY26, and an operating margin increase of 340 bps, constrained by ongoing investments including international expansion losses [3] - As of the latest check, RH shares are trading lower by 0.21% to $241.48, while ARHS shares are trading higher by 0.14% to $14.78 [3]