Operating margins plummeted to 0.7% in 2026Q1 from 13.0% in 2025Q2, reflecting a high fixed-cost structure that struggles to scale during periods of slowing top-line growth.
| Sales/Revenue | 1.38B | 1.38B | 1.27B | 1.29B | 1.23B | 796.92M | 507.43M | 494.54M |
| Revenue Growth % | 7.36% | 8.51% | -1.29% | 4.78% | 54.21% | 57.05% | 2.61% | - |
| Cost of Goods Sold | 847.41M | 842.81M | 769.88M | 747.28M | 703.87M | 466.99M | 307.93M | 318.55M |
| COGS % of Revenue | - | 61.11% | 60.57% | 58.03% | 57.27% | 58.6% | 60.68% | 64.41% |
| Gross Profit | 534.72M | 536.41M | 501.23M | 540.42M | 525.06M | 329.93M | 199.5M | 175.99M |
| Gross Margin % | 38.69% | 38.89% | 39.43% | 41.97% | 42.73% | 41.4% | 39.32% | 35.59% |
| Gross Profit Growth % | - | 7.02% | -7.25% | 2.93% | 59.14% | 65.38% | 13.36% | - |
| Operating Expenses | 449.04M | 447.44M | 414.22M | 376.11M | 340.39M | 296.58M | 168.62M | 146.33M |
| OpEx % of Revenue | - | 32.44% | 32.59% | 29.21% | 27.7% | 37.22% | 33.23% | 29.59% |
| Selling, General & Admin | 449.04M | 447.44M | 415.43M | 376.11M | 340.39M | 296.12M | 168.62M | 146.31M |
| SG&A % of Revenue | - | 32.44% | 32.68% | 29.21% | 27.7% | 37.16% | 33.23% | 29.58% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | 0 | -1.2M | 0 | 0 | 466K | 8K | 23K |
| Operating Income | 85.7M | 88.89M | 87M | 164.31M | 184.67M | 33.35M | 30.88M | 29.66M |
| Operating Margin % | 6.2% | 6.44% | 6.84% | 12.76% | 15.03% | 4.18% | 6.09% | 6% |
| Operating Income Growth % | - | 2.16% | -47.05% | -11.03% | 453.74% | 8% | 4.12% | - |
| EBITDA | 178.1M | 178.47M | 163.03M | 227.06M | 238.62M | 57.27M | 47.84M | 45.62M |
| EBITDA Margin % | 12.89% | 12.94% | 12.83% | 17.63% | 19.42% | 7.19% | 9.43% | 9.23% |
| EBITDA Growth % | 32.44% | 9.47% | -28.2% | -4.85% | 316.65% | 19.72% | 4.85% | - |
| D&A (Non-Cash Add-back) | 92.4M | 89.58M | 76.02M | 62.75M | 53.95M | 23.92M | 16.96M | 15.96M |
| EBIT | 89.42M | 91.98M | 85.8M | 164.31M | 184.67M | 33.82M | 30.88M | 29.66M |
| Net Interest Income | 1.2M | 0 | 3.16M | 3.35M | -3.39M | -5.43M | -13.06M | -13.45M |
| Interest Income | 3.75M | 0 | 8.6M | 8.8M | 0 | 0 | 0 | 0 |
| Interest Expense | 2.55M | 0 | 5.44M | 5.45M | 3.39M | 5.43M | 13.06M | 13.45M |
| Other Income/Expense | 3.63M | 3.09M | 3.92M | 4.38M | -2.09M | -6.56M | -13.06M | -13.45M |
| Pretax Income | 89.34M | 91.98M | 90.92M | 168.69M | 182.58M | 26.79M | 17.82M | 16.21M |
| Pretax Margin % | 6.46% | 6.67% | 7.15% | 13.1% | 14.86% | 3.36% | 3.51% | 3.28% |
| Income Tax | 24.74M | 24.72M | 22.37M | 43.45M | 45.94M | -10.14M | 783K | 368K |
| Effective Tax Rate % | 27.69% | 26.88% | 24.61% | 25.76% | 25.16% | -37.87% | 4.39% | 2.27% |
| Net Income | 64.6M | 67.26M | 68.55M | 125.24M | 136.63M | 21.12M | 6.08M | 7.53M |
| Net Margin % | 4.67% | 4.88% | 5.39% | 9.73% | 11.12% | 2.65% | 1.2% | 1.52% |
| Net Income Growth % | 10.74% | -1.89% | -45.26% | -8.34% | 547.03% | 247.2% | -19.2% | - |
| Net Income (Continuing) | 64.6M | 67.26M | 68.55M | 125.24M | 136.63M | 36.93M | 17.04M | 15.84M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | -7.69M | 0 |
| EPS (Diluted) | 0.46 | 0.48 | 0.49 | 0.89 | 0.98 | 0.27 | 0.13 | 0.56 |
| EPS Growth % | 13.45% | -2.04% | -44.94% | -9.18% | 262.96% | 107.69% | -76.79% | - |
| EPS (Basic) | - | 0.48 | 0.49 | 0.90 | 0.99 | 0.27 | 0.13 | 0.56 |
| Diluted Shares Outstanding | 141.74M | 141.41M | 140.69M | 140.1M | 139.61M | 136.95M | 136.95M | 28.43M |
| Basic Shares Outstanding | 140.97M | 140.7M | 140.07M | 139.47M | 138.09M | 136.95M | 136.95M | 28.43M |
| Dividend Payout Ratio | - | 0.54% | 102.49% | - | - | 293.2% | - | - |
High fixed cost sensitivity
According to the provided income statement data, Arhaus experienced a revenue growth rate of 0.9% in 2026Q1, reflecting a significant deceleration from the 15.7% peak observed in 2025Q2, which suggests that the company's top-line expansion is highly sensitive to shifting consumer discretionary spending patterns in the current environment.
The erratic nature of revenue growth, oscillating between negative territory in 2024 and mid-teen growth in 2025, indicates that Arhaus remains vulnerable to the timing of project-based furniture cycles. Investors should monitor whether the recent deceleration represents a structural cooling of demand or merely a temporary lull in the high-ticket home furnishings market.
As reported in the financial statements, Arhaus saw its gross margin contract to 36.4% in 2026Q1 from a high of 41.2% in 2025Q2, indicating that the company may be struggling to maintain premium pricing power amidst rising logistics costs and a more competitive retail landscape for luxury goods.
The inability to sustain gross margins above the 40% threshold suggests that the company's artisan-sourced supply chain may be facing inflationary pressures that are difficult to pass on to the consumer. This margin volatility highlights the risk inherent in a business model that relies on complex, global logistics for high-end inventory.
Based on the quarterly income statement figures, operating margins plummeted to 0.7% in 2026Q1 from 13.0% in 2025Q2, demonstrating that Arhaus possesses a high fixed-cost structure that severely limits profitability when top-line growth fails to scale sufficiently to cover showroom occupancy and labor expenses.
The sharp drop in operating income during periods of modest revenue growth underscores the company's sensitivity to its expansive physical footprint. The current data suggests that the firm lacks the necessary operating leverage to protect bottom-line results during cyclical downturns, making cost discipline a critical factor for future performance.
Analysis of the reported income statements reveals that SG&A expenses have remained stubbornly high, consuming nearly the entirety of gross profit in 2026Q1, which implies that management's efforts to optimize the showroom-heavy cost structure have yet to yield the intended efficiency gains in a lower-growth environment.
The persistence of high SG&A relative to revenue suggests that the company's transition toward smaller-format Design Studios has not yet offset the fixed costs associated with its traditional, large-scale showroom model. Investors should investigate whether these elevated expenses are structural or if they reflect temporary investments in market expansion.
Quick answers to the most common questions about buying ARHS stock.
For fiscal year 2025, Arhaus, Inc. (ARHS) reported total revenue of $1.38B. This represents a 178.9% increase compared to $494.5M in 2019.
Arhaus, Inc. (ARHS) is profitable, generating $67.3M in net income for the fiscal year ending 2025 with a net profit margin of 4.9%.
Arhaus, Inc. (ARHS) reported an operating income of $88.9M, resulting in an operating profit margin of 6.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Arhaus, Inc. (ARHS) generated $536.4M in gross profit for the year, representing a gross profit margin of 38.9%. This demonstrates the company's core pricing power and production efficiency.