Arhaus Reports Third Quarter 2026 Financial Results

(NASDAQ:ARHS) Arhaus, Inc. reported third quarter 2026 results for the period ended September 30, 2026. Net revenue for the third quarter increased 6.8% to $368 million compared to the third quarter of 2025. Gross margin rose 8.2% to $144 million, while selling, general and administrative expenses increased 14.8% to $134 million. Net and comprehensive income decreased 36.0% to $8 million. Adjusted EBITDA decreased 12.3% to $27 million. Comparable Delivered Sales increased 2.6% in the third quarter, bringing year-to-date Comparable Delivered Sales to 1.8%. Comparable Written Sales increased 13.9% in the third quarter, bringing year-to-date Comparable Written Sales to 6.7%. At the end of the third quarter, Arhaus operated 109 Showrooms across 31 states. During the quarter, the company completed 2 Total Showroom Projects, including 1 relocated Showroom in Charlotte, North Carolina, and 1 renovated Showroom in Atlanta, Georgia. The Charlotte, North Carolina showroom now spans approximately 35,000 square feet and is Arhaus’ second-largest Traditional Showroom. As of September 30, 2026, Arhaus reported no long-term debt, cash and cash equivalents of $318 million (a 25.5% increase from December 31, 2025), net merchandise inventory of $360 million (a 6.4% increase), and client deposits of $325 million (a 37.7% increase). Net cash provided by operating activities was $173 million for the nine months ended September 30, 2026, while net cash used in investing activities was $58 million. Company-funded capital expenditures were $46 million and landlord contributions were $12 million. For full-year 2026, Arhaus raised its net revenue and Comparable Delivered Sales outlook, now expecting net revenue of $1.465 billion to $1.485 billion and Comparable Delivered Sales growth of 2.5% to 4%. For Q4 2026, net revenue is projected at $398 million to $418 million, with Comparable Delivered Sales growth of 6% to 12%. Full-year net income is expected to be $71 million to $80 million, and Adjusted EBITDA is forecast at $160 million to $171 million. Q4 net income is expected to be $21 million to $30 million, and Adjusted EBITDA is projected at $44 million to $55 million. Other estimates for 2026 include company-funded capital expenditures of $70 million to $90 million, depreciation and amortization of $50 million to $55 million, and approximately 142 million fully diluted shares. The effective tax rate is estimated at approximately 29.0%. The company expects 4 to 6 new showroom openings and 10 to 14 Total Showroom Projects in 2026, representing mid-single-digit Net Unit Growth. John Reed is Co-Founder and Chief Executive Officer, and Michael Lee is Chief Financial Officer. The company continues to focus on disciplined expense management, operational efficiencies, and long-term profitable growth.