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Jun 30
Arhaus Q2 2025 Earnings Report
Arhaus reported strong second quarter 2025 financial results, with record net revenue and significant increases in gross margin, net income, and adjusted EBITDA.
Key Takeaways
Arhaus achieved its highest quarterly net revenue in history, exceeding $358 million, driven by strong brand performance and efficient operations. The company saw significant increases in net income and adjusted EBITDA, reflecting effective conversion of demand despite macroeconomic headwinds. Arhaus also expanded its product offerings and continued its showroom project initiatives, maintaining a strong financial position with no long-term debt.
Net revenue increased 15.7% to a record $358 million, marking the highest quarterly net revenue in Arhaus' history.
Net and comprehensive income surged by 57.7% to $35 million, demonstrating strong profitability.
Adjusted EBITDA increased by 51.2% to $60 million, highlighting improved operational efficiency.
Comparable growth was 10.5%, driven by successful conversion of first-quarter demand, while Demand comparable growth was (3.6)% due to macro headwinds, though July rebounded sharply.
Arhaus
Arhaus
Forward Guidance
Arhaus reaffirms its full-year 2025 financial and operating metrics, with a modest reduction in capital expenditures outlook. The company also provided guidance for the third quarter of 2025.
Positive Outlook
- Full-year 2025 net revenue is projected to be between $1.29 billion and $1.38 billion.
- Full-year 2025 net revenue growth is expected to range from 1.5% to 8.6%.
- Full-year 2025 Adjusted EBITDA is anticipated to be between $123 million and $145 million.
- The company expects to complete 12 to 15 Total Showroom Projects in 2025, including 4 to 6 new showroom openings.
- Third-quarter 2025 net revenue is guided to be between $320 million and $350 million.
Challenges Ahead
- Full-year 2025 comparable growth is projected to be between (5)% and 1.5%, indicating potential for negative growth.
- Third-quarter 2025 comparable growth is guided to be between (4)% and 5%, also indicating potential for negative growth.
- Full-year 2025 net income is projected to be between $48 million and $68 million, which is a wide range.
- The company modestly reduced its full-year capital expenditures outlook by $10 million, which could indicate a slowdown in investment.
- The outlook reflects currently implemented tariff actions, which could pose a risk if tariffs change.