Cash generation has deteriorated significantly, evidenced by a negative FCF margin of -8.5% and a negative OCF/NI ratio of -4.37 in 2026Q1, largely driven by a $47.6 million working capital outflow.
| Cash from Operations | 80.63M | 136.6M | 147.11M | 172.3M | 77.46M | 139.83M | 148.26M | 20.04M |
| Operating CF Margin % | - | 9.9% | 11.57% | 13.38% | 6.3% | 17.55% | 29.22% | 4.05% |
| Operating CF Growth % | -169.78% | -7.14% | -14.62% | 122.43% | -44.6% | -5.68% | 639.87% | - |
| Net Income | 64.6M | 67.26M | 68.55M | 125.24M | 136.63M | 36.93M | 17.04M | 15.84M |
| Depreciation & Amortization | 92.4M | 89.58M | 76.02M | 62.75M | 53.95M | 23.92M | 16.96M | 15.96M |
| Stock-Based Compensation | 10.23M | 0 | 7.64M | 7.91M | 4.29M | 6.38M | 403K | 272K |
| Deferred Taxes | 2.59M | 1.55M | -1.96M | -2.29M | 9.77M | -10.22M | 0 | 0 |
| Other Non-Cash Items | 33.25M | 41.5M | 27.07M | 22.51M | 12.35M | 42.08M | 13.63M | -3.82M |
| Working Capital Changes | -122.44M | -63.28M | -30.21M | -43.82M | -139.53M | 40.73M | 100.23M | -8.22M |
| Change in Receivables | 618K | 589K | 1.14M | -660K | -1.51M | 372K | -160K | -180K |
| Change in Inventory | -68.05M | -41.8M | -42.72M | 32.07M | -78.08M | -100.32M | 2.05M | -7.82M |
| Change in Payables | 6.65M | 9.86M | 5.62M | 1.22M | 10.3M | 14.51M | 1.61M | 2.13M |
| Cash from Investing | -66.08M | -77.82M | -99.53M | -96.72M | -55.67M | -41.46M | -13.01M | -9.87M |
| Capital Expenditures | -67.13M | -77.87M | -107.37M | -97.06M | -55.67M | -41.46M | -13.01M | -9.88M |
| CapEx % of Revenue | 4.86% | 5.65% | 8.45% | 7.54% | 4.53% | 5.2% | 2.56% | 2% |
| Acquisitions | 54K | 54K | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | 1M | 0 | 7.84M | 333K | 0 | 0 | 0 | 12K |
| Cash from Financing | -52.13M | -3.48M | -72.95M | -1.8M | -177K | -31.47M | -91.31M | -14.33M |
| Debt Issued (Net) | -677K | -705K | -927K | -763K | -177K | -107K | -59.22M | -9.2M |
| Equity Issued (Net) | -1.58M | -2.17M | -1.77M | -1.04M | 0 | 157.26M | -12.5M | 0 |
| Dividends Paid | -49.63M | -361K | -70.25M | 0 | 0 | -61.91M | -8.55M | 0 |
| Share Repurchases | -1.58M | -2.17M | -1.77M | -1.04M | 0 | 0 | 0 | 0 |
| Other Financing | -245K | -245K | 0 | 0 | 0 | -126.7M | -11.04M | -5.13M |
| Net Change in Cash | -37.58M | 55.55M | -25.38M | 73.78M | 21.62M | 66.91M | 43.94M | -4.15M |
| Free Cash Flow | 13.5M | 58.98M | 39.74M | 75.24M | 21.8M | 98.37M | 135.25M | 10.16M |
| FCF Margin % | 0.98% | 4.28% | 3.13% | 5.84% | 1.77% | 12.34% | 26.65% | 2.05% |
| FCF Growth % | -71.72% | 48.41% | -47.19% | 245.22% | -77.84% | -27.27% | 1230.95% | - |
| FCF per Share | 0.10 | 0.42 | 0.28 | 0.54 | 0.16 | 0.72 | 0.99 | 0.36 |
| FCF Conversion (FCF/Net Income) | 0.21x | 2.03x | 2.15x | 1.38x | 0.57x | 6.62x | 24.38x | 2.66x |
| Interest Paid | 1.25M | 0 | 4.67M | 5.3M | 5.16M | 5.12M | 9.29M | 11.26M |
| Taxes Paid | 12.49M | 0 | 8.78M | 47.13M | 34.94M | 1.4M | 1.3M | 538K |
High fixed cost sensitivity
According to the latest quarterly data, Arhaus reported a negative OCF/NI ratio of -4.37 in 2026Q1, signaling a sharp disconnect between accounting profits and actual cash generation that warrants immediate investor scrutiny regarding the sustainability of reported earnings during periods of slowing top-line growth.
The stark divergence between net income and operating cash flow suggests that the company's earnings quality is currently compromised by non-cash accruals or working capital absorption. Investors should interpret this negative conversion as a potential warning sign that the business model is struggling to translate sales into liquidity under current operational pressures.
As reported in financial statements, Arhaus experienced a significant FCF margin contraction to -8.5% in 2026Q1, a stark reversal from the positive cash flow generation observed in previous quarters, indicating that the company's capital-intensive showroom strategy is increasingly difficult to fund through internal operations alone.
The shift toward negative free cash flow appears to be driven by a combination of decelerating revenue and persistent capital expenditure requirements. This trajectory suggests that the company may face liquidity constraints if the current trend of cash burn continues to outpace the ability to optimize showroom-related costs.
Based on Arhaus's reported figures, the company maintained a CapEx/Revenue ratio of 5.4% in 2026Q1, reflecting a continued commitment to physical showroom expansion despite the evident cooling in consumer discretionary spending and the resulting pressure on overall operating margins.
The persistent level of capital intensity suggests that management is prioritizing long-term footprint expansion over immediate cash preservation. This strategy may be risky if the revenue per square foot does not improve, as it locks the company into high fixed-cost obligations that are difficult to unwind.
Analysis of recent filings reveals a substantial working capital outflow of $47.6 million in 2026Q1, which appears to be the primary driver behind the company's negative operating cash flow and suggests potential inefficiencies in inventory management or a slowdown in the collection of customer deposits.
The significant cash drain from working capital indicates that the company is likely carrying excess inventory or experiencing a mismatch in the timing of cash receipts versus delivery recognition. This dynamic warrants further investigation into whether the current inventory levels are aligned with the actual pace of consumer demand.
Quick answers to the most common questions about buying ARHS stock.
Arhaus, Inc. (ARHS) generated $136.6M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Arhaus, Inc. (ARHS) generated $59.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Arhaus, Inc. (ARHS) spent $77.9M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Arhaus, Inc. (ARHS) returned $0.4M to shareholders via cash dividends and spent $2.2M on share repurchases. This shows the company's commitment to returning capital to its equity investors.