Latest news with #ARHS
Yahoo
05-06-2025
- Business
- Yahoo
ARHS Q1 Earnings Call: Tariffs, Showroom Growth, and Guidance Above Expectations for Q2
Luxury furniture retailer Arhaus (NASDAQ:ARHS) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 5.5% year on year to $311.4 million. Its non-GAAP EPS of $0.03 per share was 51% below analysts' consensus estimates. Is now the time to buy ARHS? Find out in our full research report (it's free). Revenue: $311.4 million (5.5% year-on-year growth) Adjusted EPS: $0.03 vs analyst expectations of $0.06 (51% miss) Revenue Guidance for Q2 CY2025 is $335 million at the midpoint, above analyst estimates of $331.3 million EBITDA guidance for the full year is $134 million at the midpoint, below analyst estimates of $144 million Operating Margin: 1.7%, down from 6.2% in the same quarter last year Locations: 103 at quarter end, up from 92 in the same quarter last year Same-Store Sales fell 1.5% year on year (-9.5% in the same quarter last year) Market Capitalization: $1.25 billion Arhaus's first quarter results were shaped by continued expansion of its showroom footprint and a resilient affluent customer base, despite volatility in consumer demand. Management pointed to strong engagement in both retail and e-commerce channels, with designer-led services driving higher average order values. CEO John Reed attributed the quarter's performance to the company's diversified supply chain, noting that over 70% of upholstery products were sourced and manufactured in the United States, minimizing exposure to shifting tariffs. Reed also emphasized the importance of long-standing vendor partnerships, which have allowed Arhaus to adapt sourcing strategies quickly in response to global trade developments. The company remained disciplined in its promotional and pricing approach, focusing on product quality and customer experience rather than broad-based discounts. Looking ahead, management expects near-term volatility due to evolving tariff policies and shifts in consumer sentiment, but remains focused on strategic investments and showroom growth to drive long-term performance. CEO John Reed stated that Arhaus will continue to prioritize expanding its physical footprint, with 12 to 15 showroom projects planned for the year and additional relocations to enhance brand visibility. CFO Ryan Brody outlined plans to mitigate the estimated $10 million impact from new tariffs through further sourcing diversification and vendor concessions, rather than broad price increases. Management highlighted ongoing investments in technology and operational infrastructure, such as upgraded warehouse management and payment systems, to support scalability and enhance client experience. They believe these efforts, combined with a debt-free balance sheet, will position Arhaus to navigate uncertainty and capitalize on future demand. Management cited showroom expansion, supply chain agility, and a loyal client base as key factors supporting the quarter's growth, while tariff-related cost pressures and consumer uncertainty weighed on margins. Showroom-driven demand growth: New and relocated showrooms generated meaningful client engagement, with management noting that approximately 90% of clients live within 50 miles of a location. These projects not only expanded market presence but also contributed to higher average order values, especially for transactions exceeding $5,000 and $10,000. Sourcing diversification strategy: The company's supply chain is now spread across North America, Europe, and South Asia, reducing reliance on China. Management expects receipts from China to fall to about 1% by year-end, and highlighted investments in domestic manufacturing—particularly in upholstery—to control quality and costs. Tariff impact and mitigation: Leadership estimated a $10 million profit and loss impact from newly implemented tariffs but anticipates offsetting much of this through strategic sourcing shifts and vendor cost concessions. Management emphasized that the majority of Arhaus's products are not affected by the highest tariffs due to the company's existing U.S. production base. Omnichannel and e-commerce investments: The company continued to invest in technology for both online and showroom experiences, rolling out a new payment platform and enhancing its e-commerce site to drive engagement. Digital and content strategies, including catalog storytelling, remain central to Arhaus's brand positioning. Steady client behavior: Despite macroeconomic headwinds and a choppy demand environment, Arhaus reported no significant change in cancellation rates or delivery delays. Clients remained responsive to both large and small purchases, and the company maintained a flexible promotional approach based on customer response to thresholds in its 'buy more, save more' program. Arhaus's outlook for the next quarter and the full year is shaped by tariff costs, continued showroom expansion, and operational investments to support growth and margin resilience. Tariff mitigation and sourcing shifts: The company anticipates ongoing cost pressure from global tariffs, particularly those affecting Chinese imports. However, management believes strategic sourcing adjustments and strong vendor relationships will help offset much of the anticipated $10 million impact, limiting the need for broad price increases. Showroom expansion as a growth driver: With 12 to 15 showroom projects planned for the year, including new openings and relocations, Arhaus expects these investments to enhance brand visibility, attract new clientele, and capture greater market share. Management underscored that new showrooms are evaluated for long-term returns and are not subject to short-term demand fluctuations. Operational investments and margin focus: Continued investment in technology—such as upgraded warehouse management systems and payment platforms—is expected to improve efficiency and scalability. Management also aims to keep gross margin roughly flat year-over-year by balancing fixed occupancy costs with product margin improvements, even as revenue growth remains volatile. Going forward, the StockStory team will be monitoring (1) the impact of further tariff mitigation and sourcing diversification on margins; (2) execution and returns from new showroom openings and relocations; and (3) the effectiveness of operational investments in technology and supply chain infrastructure. Shifts in consumer sentiment and the company's ability to sustain higher average order values will also be important signposts. Arhaus currently trades at a forward P/E ratio of 17.7×. In the wake of earnings, is it a buy or sell? The answer lies in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
25-04-2025
- Business
- Yahoo
3 Value Stocks That Concern Us
Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune by purchasing wonderful businesses at reasonable prices. But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues. Separating the winners from the value traps is a tough challenge, and that's where StockStory comes in. Our job is to find you high-quality companies that will stand the test of time. That said, here are three value stocks with little support and some other investments you should consider instead. Forward P/E Ratio: 15.9x With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ:ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases. Why Are We Wary of ARHS? Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations Smaller revenue base of $1.27 billion means it hasn't achieved the economies of scale that some industry juggernauts enjoy Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 5.9 percentage points Arhaus is trading at $8.94 per share, or 15.9x forward price-to-earnings. To fully understand why you should be careful with ARHS, check out our full research report (it's free). Forward P/E Ratio: 14.5x Known for mattresses that can be adjusted with regards to firmness, Sleep Number (NASDAQ:SNBR) manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows. Why Are We Hesitant About SNBR? Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations Estimated sales decline of 6.6% for the next 12 months implies an even more challenging demand environment High net-debt-to-EBITDA ratio of 8× increases the risk of forced asset sales or dilutive financing if operational performance weakens At $6.69 per share, Sleep Number trades at 14.5x forward price-to-earnings. Check out our free in-depth research report to learn more about why SNBR doesn't pass our bar. Forward P/E Ratio: 11.7x Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ:QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems. Why Should You Dump QDEL? Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track Free cash flow margin shrank by 20.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive Eroding returns on capital suggest its historical profit centers are aging QuidelOrtho's stock price of $27.37 implies a valuation ratio of 11.7x forward price-to-earnings. Read our free research report to see why you should think twice about including QDEL in your portfolio, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
Yahoo
01-04-2025
- Business
- Yahoo
Will Weakness in Arhaus, Inc.'s (NASDAQ:ARHS) Stock Prove Temporary Given Strong Fundamentals?
Arhaus (NASDAQ:ARHS) has had a rough week with its share price down 12%. However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Specifically, we decided to study Arhaus' ROE in this article. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital. ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Arhaus is: 20% = US$69m ÷ US$344m (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. That means that for every $1 worth of shareholders' equity, the company generated $0.20 in profit. See our latest analysis for Arhaus Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. To start with, Arhaus' ROE looks acceptable. Even when compared to the industry average of 18% the company's ROE looks quite decent. This certainly adds some context to Arhaus' exceptional 40% net income growth seen over the past five years. We believe that there might also be other aspects that are positively influencing the company's earnings growth. Such as - high earnings retention or an efficient management in place. Next, on comparing with the industry net income growth, we found that Arhaus' growth is quite high when compared to the industry average growth of 14% in the same period, which is great to see. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. What is ARHS worth today? The intrinsic value infographic in our free research report helps visualize whether ARHS is currently mispriced by the market. Arhaus doesn't pay any regular dividends to its shareholders, meaning that the company has been reinvesting all of its profits into the business. This is likely what's driving the high earnings growth number discussed above. In total, we are pretty happy with Arhaus' performance. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
11-02-2025
- Business
- Yahoo
Why Arhaus Inc (ARHS) Is Skyrocketing
We recently compiled a list of the . In this article, we are going to take a look at where Arhaus Inc (NASDAQ:ARHS) stands against the other retail stocks. The retail industry in 2025 has been doing surprisingly well. Growth has started to accelerate for many companies and AI is allowing a lot more efficiency in the supply chain. The macros have also cooperated with the retail industry as the strong labor market with positive wage growth has pushed more consumer spending. Retailers are capitalizing on this by expanding into new markets and spending more on AI-powered supply chains and checkout systems. Plus, there's chatter of interest rates coming down this year, especially with pressure from the Trump administration. This could boost the sector even more. The convergence of these factors has created fertile ground for retail stocks. It is worth looking into those that have performed the best so far this year, as the market has rewarded these companies for good reasons. Methodology For this article, I screened the top-performing retail stocks year-to-date. Stocks that I have covered recently will be excluded from this list. I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). A professional interior designer selecting items from the company including textiles, accessories, and outdoor lighting. Number of Hedge Fund Holders In Q3 2024: 13 Arhaus Inc (NASDAQ:ARHS) is a retailer of artisan-crafted home furnishings. The stock has delivered stellar returns so far in 2024 after it raised its 2024 guidance. It raised its full-year 2024 net revenue forecast to $1.27 billion to $1.28 billion. This is up $35 million from prior guidance. The company cited stronger-than-expected Q4 demand. Demand comparable growth reached 6% in Q4, with November+December comps surging 10% despite a weak October. Full-year comparable growth is still negative but has been improving. In addition, CFO Dawn Phillipson stepped down in January, but analysts are confident the finance team can continue to do well. The transition didn't derail the bullish sentiment here. The consensus price target of $12.18 implies 0.07% downside. ARHS stock is up 29.68% year-to-date. Overall ARHS ranks 4th on our list of the retail stocks that are skyrocketing so far in 2025. While we acknowledge the potential of ARHS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ARHS but that trades at less than 5 times its earnings, check out our report about the . READ NEXT: and Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
