Arhaus Inc. published the transcript of its fourth-quarter and full-year 2025 earnings conference call held February 26, 2026. The call featured prepared remarks from Founder, Chairman and CEO John Reed and CFO Michael Lee, with SVP of Investor Relations Tara Atwood-Saja hosting and Chief Marketing and eCommerce Officer Jen Porter joining for Q&A. Analysts participating included representatives from Morgan Stanley, Jefferies, Guggenheim Securities, and Barclays. Management highlighted record 2025 net revenue of $1.38 billion, up 8.5% year-over-year, driven by showroom growth, product newness and customization, and strength in upholstery and interior design-related projects. Reed said, “In 2025, the Arhaus team delivered record net revenue of $1.38 billion,” adding, “When demand becomes more considered, differentiation matters more, and when clients invest with intention, they invest in quality.” Lee detailed margin dynamics and investment priorities, noting full-year gross margin declined 50 basis points to 38.9% largely due to higher showroom occupancy costs, while adjusted EBITDA rose 8.9% to $145 million with a flat 10.5% margin. In the fourth quarter, results were pressured by a higher inventory reserve tied to obsolete inventory and continued occupancy and technology investment costs. “We made the business decision to really take the loss and move on,” Lee said regarding the obsolete inventory charge. The company discussed its outlook for 2026, guiding net revenue of $1.43 billion to $1.47 billion and adjusted EBITDA of $150 million to $161 million, while continuing a multi-year technology transformation expected to total about $30 million through 2030. Lee also addressed tariff uncertainty, estimating 2026 tariff impacts of $30 million to $40 million, and said the company is using sourcing shifts, vendor negotiations, pricing and promotions to protect margins: “We’ve been very nimble through our price and promotions.” Arhaus also reiterated its showroom expansion plans and disclosed it ended 2025 with 107 showrooms after 13 projects, while expecting 10 to 14 projects in 2026. Reed discussed learnings from a larger-format Pasadena location but emphasized flexibility: “We have no strategy to go to only 40,000 square foot stores in the future.” The company also pointed to growth opportunities in its trade program, with Reed calling it “a big, big growth area.” The full transcript can be accessed through the link below.
Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Arhaus Inc. published the original content used to generate this news brief on February 26, 2026, and is solely responsible for the information contained therein.
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