Q4 2025 Arhaus Inc Earnings Call Transcript
Key Points
- Arhaus Inc (ARHS) delivered record net revenue of $1.38 billion in 2025, up 8.5% year over year, demonstrating the strength and durability of its business model.
- The company achieved record total written sales, supported by the growth of its showroom footprint and continued demand for its products.
- Customization and interior design services saw impressive growth, highlighting the company's ability to cater to high-end clients seeking personalized and high-quality home furnishings.
- Arhaus Inc (ARHS) maintained a strong balance sheet with cash and cash equivalents totaling $253 million, up 28.3% year over year, and remains debt-free.
- The company is making strategic investments in technology and distribution to support long-term growth, including a multi-year digital transformation and bringing distribution management in-house.
- Gross margin decreased by 50 basis points to 38.9% in 2025, primarily due to higher showroom occupancy costs associated with expansion.
- Net income decreased by 1.9% to $67 million, reflecting the costs of showroom expansion and continued investment in the business.
- The fourth quarter saw a decline in comparable written sales by 2.8%, driven by temporary softness in October due to promotional timing shifts.
- Higher showroom occupancy costs and strategic investments in technology contributed to increased selling, general, and administrative expenses.
- The company faced challenges with obsolete inventory, leading to an increase in inventory reserves and impacting gross margin in the fourth quarter.
Good morning and welcome to the Our House 4th quarter and full year 2025 earnings conference call.
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, Tara Atwoodasia, Vice President of Investor relations.
Please go ahead.
Good morning and thank you for joining us for the our house 4th quarter and full year 2025 earnings call.
Joining me on today's call for prepared remarks are John Reed, our founder, Chairman, and Chief Executive Officer, and Michael Lee, our Chief Financial Officer. Jennifer Porter, our chief marketing and e-commerce officer, will join us for the Q&A portion of the call.
We issued our earnings press release in Form 100 for the year ended December 31, 2025 before the market opened today.
Those documents are available on our investor relations website at Iir.arhouse.com. A
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