Q3 2024 Arhaus Inc Earnings Call Transcript
Key Points
- Arhaus Inc (ARHS) launched compelling new product collections, including the Astor Collection, which has been well-received for its design and craftsmanship.
- The company set a new record for total demand in September, marking it as the biggest demand month in Arhaus history.
- Arhaus Inc (ARHS) is on track to meet the high end of its 2024 showroom opening goals, with 10 new showrooms opened this year and plans for further expansion.
- The company is making strategic investments in infrastructure and technology, including a new warehouse management system and planning system, to support long-term growth.
- Arhaus Inc (ARHS) maintains a debt-free balance sheet, providing a competitive advantage and allowing for responsible investments in growth opportunities.
- Arhaus Inc (ARHS) experienced a decline in demand, with a comparable growth decline of 11.3% in the third quarter.
- The company lowered its full-year sales and earnings outlook due to a continued tempered consumer environment.
- Gross margin decreased to 38.6% due to higher showroom costs, delivery and transportation costs, and deleverage on lower net revenue.
- Third-quarter net income decreased to $10 million, with adjusted EBITDA falling to $23 million from $34 million in the previous year.
- The company anticipates a low-double-digit demand comp decline for the fourth quarter, reflecting ongoing macroeconomic pressures.
Good morning and welcome to the Arhaus third-quarter 2024 earnings conference call. (Operator Instructions) Please note that this call is being recorded and the reproduction of any part of this call is not permitted without written authorization from the company. I will now turn the call over to your host, John Reed, Co-Founder, Chairman, and Chief Executive Officer. Please go ahead.
Good morning, everyone, and welcome to the Arhaus third-quarter conference call. On with me today are Dawn Phillipson, Chief Financial Officer; and Tara Atwood, our new Vice President of Investor Relations. Tara is a seasoned Investor Relations professional, and we are excited to welcome her to the Arhaus team. Now, I'll hand it over to Tara.
Good morning and thank you for joining the Arhaus third-quarter 2024 earnings call. After our prepared remarks, we will be joined by Jen
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