Arhaus Inc (ARHS, Financial), a rapidly growing lifestyle brand and omni-channel retailer of premium artisan-crafted home furnishings, announced its financial results for the third quarter ended September 30, 2023, on November 2, 2023. The company reported a net revenue of $326 million, a slight increase from the $320 million reported in the same quarter of 2022. However, the company's net and comprehensive income decreased to $20 million from $37 million in Q3 2022.
Financial Highlights
Arhaus Inc (ARHS, Financial) reported a year-to-date net revenue of $944 million, with a net and comprehensive income of $94 million. The company's adjusted EBITDA for the period was $152 million. The company updated its 2023 outlook, expecting a net revenue of $1,265 million to $1,285 million, and a net and comprehensive income of $112.5 million to $117.5 million.
John Reed, Co-Founder and Chief Executive Officer, commented, “We are very pleased with our third quarter financial performance and are raising the midpoint of our full year outlook for net revenue, net income and adjusted EBITDA. We had another exceptional quarter of demand comparable growth(2) in the third quarter, up 11.7%. We experienced strong demand across all regions, products and channels."
Financial Analysis
Despite the increase in net revenue, Arhaus Inc (ARHS, Financial) saw a decrease in gross margin from $136 million in Q3 2022 to $131 million in Q3 2023. Selling, general and administrative expenses increased by 20.0% to $107 million, compared to $89 million in the third quarter of 2022. The decrease in net and comprehensive income was driven by these factors.
Balance Sheet and Cash Flow Highlights
As of September 30, 2023, Arhaus Inc (ARHS, Financial) had cash and cash equivalents totaling $237 million, with no long-term debt. Net merchandise inventory decreased by 6.1% to $269 million, compared to $286 million as of December 31, 2022. For the nine months ended September 30, 2023, net cash provided by operating activities was $131 million, compared to $58 million for the same period in 2022.
Outlook
Arhaus Inc (ARHS, Financial) updated its 2023 outlook, expecting a net revenue of $1,265 million to $1,285 million, and a net and comprehensive income of $112.5 million to $117.5 million. The company also expects an adjusted EBITDA of $192.5 million to $197.5 million.
Explore the complete 8-K earnings release (here) from Arhaus Inc for further details.
