Third Quarter 2026
Filed Nov 5, 2026Arhaus reports third-quarter net revenue growth and raises full-year Net revenue and Comparable Delivered Sales outlook while quarterly net income and Adjusted EBITDA declined.
Third-quarter Net revenue and Comparable Written Sales increased, and the Company raised its full-year Net revenue and Comparable Delivered Sales outlook. However, selling, general and administrative expenses increased faster than revenue, while Net and comprehensive income and Adjusted EBITDA decreased.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 Net revenueGAAP | $368.1M | – | 6.8% |
| Q3 2026 Cost of goods soldGAAP | 223,696 | – | – |
| Q3 2026 Gross marginGAAP | $144.4M | – | 8.2% |
| Q3 2026 Selling, general and administrative expensesGAAP | 134,340 | – | 14.8% |
| Q3 2026 Loss (gain) on disposal of assetsGAAP | 12 | – | – |
| Q3 2026 Income from operationsGAAP | $10.07M | – | – |
| Q3 2026 Interest income, netGAAP | (1,009) | – | – |
| Q3 2026 Other incomeGAAP | (622) | – | – |
| Q3 2026 Income before taxesGAAP | 11,699 | – | – |
| Q3 2026 Income tax expenseGAAP | 3,880 | – | – |
| Q3 2026 Net and comprehensive incomeGAAP | $7.82M | – | (36.0)% |
| Q3 2026 Net and comprehensive income per share, basicGAAP | $ 0.06 | – | – |
| Q3 2026 Weighted-average number of common shares outstanding, basicGAAP | 141,619,661 | – | – |
| Q3 2026 Net and comprehensive income per share, dilutedGAAP | $ 0.05 | – | – |
| Q3 2026 Weighted-average number of common shares outstanding, dilutedGAAP | 142,275,176 | – | – |
| Q3 2026 Net and comprehensive income as a % of net revenueGAAP | 2.1 % | – | – |
| Q3 2026 Adjusted EBITDAnon-GAAP | $27.39M | – | (12.3)% |
| Q3 2026 Adjusted EBITDA as a % of net revenuenon-GAAP | 7.4 % | – | – |
| Q3 2026 Comparable Delivered Salesother | 2.6% | – | 2.6% |
| Q3 2026 Comparable Written Salesother | 13.9% | – | 13.9% |
| Nine months ended September 30, 2026 Net revenueGAAP | $1.07B | – | – |
| Nine months ended September 30, 2026 Gross marginGAAP | 430,928 | – | – |
| Nine months ended September 30, 2026 Selling, general and administrative expensesGAAP | 364,342 | – | – |
| Nine months ended September 30, 2026 Income from operationsGAAP | $66.47M | – | – |
| Nine months ended September 30, 2026 Net and comprehensive incomeGAAP | $49.69M | – | – |
| Nine months ended September 30, 2026 Net and comprehensive income per share, dilutedGAAP | $ 0.35 | – | – |
| Nine months ended September 30, 2026 Adjusted EBITDAnon-GAAP | $115.9M | – | – |
| Nine months ended September 30, 2026 Adjusted EBITDA as a % of net revenuenon-GAAP | 10.9 % | – | – |
| Nine months ended September 30, 2026 Net cash provided by operating activitiesGAAP | 172,960 | – | – |
| Nine months ended September 30, 2026 Net cash used in investing activitiesGAAP | (58,139) | – | – |
| Nine months ended September 30, 2026 Free cash flownon-GAAP | $114.8M | – | – |
| Year-to-date Comparable Delivered Salesother | 1.8% | – | 1.8% |
| Year-to-date Comparable Written Salesother | 6.7% | – | 6.7% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Full-Year 2026 and Q4 2026 outlook
- RevenueFull-Year 2026 Net revenue: $1.465 billion to $1.485 billion; Q4 2026 Net revenue: $398 million to $418 million
- Tax rate~ 29.0%
- NoteFull-Year 2026 Net revenue growth: 6.2% to 7.7%
- NoteQ4 2026 Net revenue growth: 9.1% to 14.6%
- NoteFull-Year 2026 Comparable delivered sales: 2.5% to 4%
- NoteQ4 2026 Comparable delivered sales: 6% to 12%
- NoteFull-Year 2026 Net income: $71 million to $80 million
- NoteQ4 2026 Net income: $21 million to $30 million
- NoteFull-Year 2026 Adjusted EBITDA: $160 million to $171 million
- NoteQ4 2026 Adjusted EBITDA: $44 million to $55 million
- NoteCompany-funded capital expenditures: $70 million to $90 million
- NoteDepreciation & amortization: $50 million to $55 million
- NoteFully diluted shares: ~ 142 million
- NoteShowroom openings: 4 to 6 new Showrooms
- NoteTotal Showroom Projects: 10 to 14 Showroom Projects
- NoteNet Unit Growth: Mid-Single-Digit
Capital returns
- Nine months ended September 30, 2026 repurchase of shares for payment of withholding taxes for equity based compensation: (1,681).
- Nine months ended September 30, 2026 cash dividend payments: (49,590).
What drove it
- Comparable Written Sales increased 13.9% in the third quarter.
- Comparable Delivered Sales increased 2.6% in the third quarter.
- The Company cited strength in client demand and momentum in Comparable Written Sales.
- The Company completed 2 Total Showroom Projects, consisting of 1 relocated Showroom in Charlotte, North Carolina, and 1 renovated Showroom in Atlanta, Georgia.
- Arhaus operated 109 Showrooms across 31 states at the end of the third quarter of 2026.
Concerns
- Selling, general and administrative expenses increased 14.8%, compared with Net revenue growth of 6.8%.
- Net and comprehensive income decreased 36.0% to $8 million.
- Adjusted EBITDA decreased 12.3% to $27 million.
- The Company cited continued fuel and transportation cost pressures.
- The Company cited strategic investment into expanded marketing initiatives to support future growth.
What to watch
- Q4 2026 Comparable delivered sales guidance of 6% to 12%.
- Q4 2026 Net revenue guidance of $398 million to $418 million.
- Q4 2026 Net income guidance of $21 million to $30 million and Adjusted EBITDA guidance of $44 million to $55 million.
- Execution against 4 to 6 new Showroom openings and 10 to 14 Total Showroom Projects for full-year 2026.
- Fuel and transportation cost pressures and expanded marketing initiatives.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $ 318,039, compared with $ 253,356 as of December 31, 2025.
- No long-term debt.
- Merchandise inventory, net as of September 30, 2026: 360,496, compared with 338,806 as of December 31, 2025.
- Client deposits as of September 30, 2026: 324,988, compared with 235,943 as of December 31, 2025.
- Total assets as of September 30, 2026: $ 1,538,738, compared with $ 1,394,746 as of December 31, 2025.
- Total liabilities as of September 30, 2026: $ 1,113,544, compared with $ 976,518 as of December 31, 2025.
- Total stockholders’ equity as of September 30, 2026: 425,194, compared with 418,228 as of December 31, 2025.
- Nine months ended September 30, 2026 purchases of property, furniture and equipment: (59,391).
- Nine months ended September 30, 2026 company-funded capital expenditures: $46 million; landlord contributions: $12 million.
Analysis
Third-quarter demand indicators improved. Net revenue increased 6.8% to $368 million, while Comparable Delivered Sales increased 2.6% and Comparable Written Sales increased 13.9%. The Company said third-quarter Net revenue and Comparable Delivered Sales were within its guidance range. Year-to-date Comparable Delivered Sales was 1.8%, and year-to-date Comparable Written Sales was 6.7%.
Profitability was weaker than the revenue result. Gross margin increased 8.2% to $144 million, but selling, general and administrative expenses increased 14.8% to $134 million. Income from operations was $10,068, compared with $16,434, and Net and comprehensive income was $7,819, compared with $12,218. Adjusted EBITDA was $27,385, compared with $31,236, while Adjusted EBITDA as a percentage of net revenue was 7.4 %, compared with 9.1 %.
The balance sheet and cash generation remained supported by cash and client deposits. Cash and cash equivalents were $ 318,039 as of September 30, 2026, and the Company reported no long-term debt. For the nine months ended September 30, 2026, Net cash provided by operating activities was 172,960 and Free cash flow was $ 114,821. Cash dividend payments were (49,590), while repurchases for withholding taxes on equity-based compensation were (1,681).
The physical footprint reached 109 Showrooms across 31 states, after 2 Total Showroom Projects in the quarter. The Company continues to expect 4 to 6 new Showroom openings and 10 to 14 Total Showroom Projects for full-year 2026. It raised full-year Net revenue and Comparable Delivered Sales outlook, citing strength in client demand and Comparable Written Sales momentum, while maintaining Net income and Adjusted EBITDA outlook following an increase last quarter.
The guide calls for Q4 2026 Net revenue of $398 million to $418 million, Comparable delivered sales of 6% to 12%, Net income of $21 million to $30 million, and Adjusted EBITDA of $44 million to $55 million. Management said the unchanged profit outlook reflects continued fuel and transportation cost pressures and strategic investment into expanded marketing initiatives. The key reported tension is stronger written demand and a higher revenue outlook alongside lower third-quarter earnings and Adjusted EBITDA.
Management, verbatim
For 40 years, Arhaus has been defined by exceptional craftsmanship, timeless design, and distinctive products. Our continued investment in compelling new collections and expanded customization is resonating with clients, as reflected in third-quarter Comparable Written Sales (2) growth of 13.9%. As we celebrate our 40th anniversary, we remain excited about the opportunity to bring our unique product offering to more clients and build on our momentum.
John Reed, Co-Founder and Chief Executive Officer
We are pleased with our third-quarter performance, which reflects strong client demand, disciplined execution, and continued progress across our strategic priorities. Our investments in our people, infrastructure, and technology are strengthening our foundation and positioning Arhaus for sustainable, profitable long-term growth. I want to thank our entire Arhaus team for their dedication, passion, and continued commitment to delivering an exceptional client experience.
Michael Lee, Chief Financial Officer
Not in the filing
stated, not guessed- Prior-quarter comparisons were not reported for the financial statement metrics.
- Q3 2026 operating cash flow, investing cash flow, financing cash flow, free cash flow, capital expenditures, dividends, and share repurchases were not reported as standalone quarterly figures.
- Segment revenue was not reported.
- Gross margin, operating expense, and tax-rate guidance were not reported, except for the effective tax rate estimate of ~ 29.0%.
- Prior-period outlook was not provided; therefore, no actual-versus-prior-guidance comparison is available.
- A GAAP reconciliation for Adjusted EBITDA guidance was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.