ARHS

MKT CAP $3.1BP/E 22.4DIV YIELD —FCF YIELD 1.33%REV TTM $1.4B +5.4%NET INCOME $69.2M −2.8%NET CASH —52W 5.75 – 11.87SEC XBRL · TTM TO Invalid Date

How ARHS rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Business Overview Founded in 1986 by John Reed, our Chief Executive Officer (“CE O”), and his father, Arhaus, Inc.
(“Arhaus”, “Company”, “we”, “us” or “our”) is a premium home furnishings brand built on a simple idea: furniture and décor should be responsibly sourced, lovingly made, and built to last.
We operate a vertically integrated model, designing and sourcing products directly from skilled artisans and carefully selected manufacturing vendors around the world, including domestic upholstery production at our own North Carolina manufacturing facility.
This approach enables us to offer a highly exclusive and customizable assortment of heirloom-quality furniture and décor designed to be used and enjoyed for generations.
Design is at the core of everything Arhaus does.
With more than 100 Showroom locations across the United States, our integrated omni-channel model connects every client touchpoint, from Showroom and interior design to eCommerce and catalog, allowing us to meet clients wherever and however they choose to shop while delivering a highly personalized client-first experience from discovery through delivery.
On November 4, 2021 , the Company completed its initial public offering (“IPO”) of its Class A common stock, which is traded on the Nasdaq Global Select Market (the “Nasdaq”) under the symbol “ ARHS ”.
Our vertically integrated model, inclusive of design and product development teams, upholstery manufacturing capabilities, direct vendor sourcing, direct-to-consumer and direct-to-trade selling, allows Arhaus to maintain greater control over product quality, design integrity, and value.
We offer merchandise across a broad range of categories, including furniture, outdoor, bath, lighting, textiles and décor.
Our curated assortments are presented across our sales channels in sophisticated, family-friendly and lifestyle-oriented settings.
Based on third-party reports, publicly available data, and our internal research, we believe the United States premium home furnishings market is approximately $100 billion.
This highly fragmented market is served by a large number of independent retailers, which we believe provides us a meaningful opportunity to increase market share over time.
We believe that we are well positioned to grow market share through our differentiated brand positioning, scale, and strong resonance with affluent clients who value quality, craftsmanship, and design.
Products are designed for use throughout the home and are sourced directly from a global network of nearly 400 vendors .
Through close collaboration with Arhaus product development teams and sourcing relationships, and supported by our vertically integrated model, we believe we are able to deliver high-quality products at a compelling value.
Arhaus strives to deliver a welcoming and inspirational experience across both Showrooms and eCommerce, guided by our belief that retail is theater.
Showrooms are immersive, design-forward spaces that serve as an important driver of brand awareness and client engagement, while our eCommerce channel functions as a seamless extension of the physical Showroom experience.
Our experienced design consultants and interior designers provide expert guidance and personalized service, supporting clients throughout their shopping journey.
As of December 31, 2025, the Company operated 107 Showrooms in 31 states, consisting of 90 Traditional Showrooms, 9 Design Studios and 8 Lofts.
Our financial and operating performance are summarized in the following table: Year Ended December 31, 2025 2024 2023 Net revenue $ 1,379,222 $ 1,271,107 $ 1,287,704 Net revenue growth (decline) 8.5 % (1.3) % 4.8 % Gross margin as a % of net revenue 38.9 % 39.4 % 42.0 % Net and comprehensive income as a % of revenue 4.9 % 5.4 % 9.7 % Our Competitive Strengths A Design-Led, Artisan-Crafted Concept Delivering Livable Luxury We offer a differentiated concept within the premium home furnishing and décor market by combining design-led products, quality craftsmanship, compelling value, and an integrated omni-channel model.
Our artisan-crafted, globally curated products are designed to balance elevated style with durability and everyday livability.
We engage clients through an omni-channel model grounded in our long-standing conviction that retail is theater, with physical Showrooms serving as immersive, inspirational brand environments and our eCommerce channel functioning as a natural extension of those spaces.
In a highly fragmented market with limited scale, we believe our premium positioning, vertically integrated model, service-oriented approach, and curated product assortment position us well to expand brand awareness and gain market share over time.
Highly Experiential, Integrated Omni-Channel Model Our integrated omni-channel model supports a premium, high-touch client experience and the execution of our growth strategy.
By combining immersive Showrooms with digital engagement, interior design services, exclusive artisan-crafted products, and white-glove fulfillment, our omni-channel model offers purchasing and personalized service at scale.
This integrated approach allows product, service, and engagement channels to reinforce one another, supporting higher client engagement, repeat behavior, and durable revenue growth over time.
For more information, see the “ Omni-Channel Model ” section herein.
Our Customer Mix Our business is supported by a mix of customers, i ncluding our core customer, customers that work with our Arhaus interior designers, and trade.
Interior designer-assisted projects generally exhibit higher average order values (“AOVs”), repeat purchasing behavior, and increased visibility into future projects.
This customer mix is supported by our omni-channel model and service-oriented approach.
Industry-Leading Personalization and Customization Our omni-channel model supports extensive personalization and customization, allowing clients and designers to tailor products across hundreds of silhouettes, fabrics, and leathers.
These capabilities are supported in Traditional Showrooms, Design Studios, and eCommerce and are enabled by our vertically integrated sourcing model and domestic manufacturing capabilities.
A significant portion of our upholstery assortment is produced domestically in the United States, with approximately 70% sourced domestically based on merchandise receipts in 2025.
The largest portion of this production occurs at our own manufacturing facility in North Carolina, which provides enhanced control over design, quality, and lead time.
We believe these capabilities differentiate Arhaus, support deeper client engagement, and reinforce our ability to deliver highly personalized, lifestyle-driven products.
Strong Direct Global Sourcing Relationships Our direct global sourcing relationships enable us to offer high-quality, differentiated products with compelling value.
We maintain long-standing relationships with a network of global vendors and artisans, supporting consistent product quality, supply chain resilience, and a high degree of product exclusivity.
As of 2025, over 90% of our products, based on net revenue, are exclusive to Arhaus.
Our in-house design and product development teams work closely with our sourcing relationships to innovate and bring new assortments to market.
For more information, see the “ Our Premium, Artisan-Crafted Products ” section herein.

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Business Overview Founded in 1986 by John Reed, our current Chief Executive Officer (“CEO”) and his father, Arhaus, Inc.
(“Arhaus,” “Company,” “we,” “us” or “our”) is a growing lifestyle brand and omni-channel retailer of artisan-crafted home furnishings.
We were founded on a simple idea: furniture should be responsibly sourced, lovingly made and built to last.
Today, we partner with artisans around the world who share our vision, creating beautiful, premium and heirloom-quality home furnishings that clients can use for generations.
On November 4, 2021 , the Company completed its initial public offering (“IPO”) of its Class A common stock, which is traded on the Nasdaq Global Select Market (the “Nasdaq”) under the symbol “ ARHS. ” Our vertical model, consisting of our design and product development teams, upholstery manufacturing capabilities, direct vendor sourcing, and direct-to-consumer selling, allows us to offer a differentiated approach to furniture and décor.
We offer merchandise in a number of categories, including furniture, outdoor, lighting, textiles and décor.
Our curated assortments are presented across our merchandise sales channels in sophisticated, family friendly and unique lifestyle settings.
Based on third-party reports, publicly available data and our internal research, we estimate the United States premium home furnishing market is approximately $100 billion.
This attractive market is highly fragmented, served by many small independent furniture stores, which favorably positions us to grow profitably and gain market share.
We believe we are well positioned within this market due to our unique approach, momentum, scale and growth strategies.
Our products are designed to be used and enjoyed throughout the home and are sourced directly from a network of more than 400 vendors with no wholesale or dealer markup.
Our product development teams work alongside our direct sourcing partners to bring to m arket proprietary merchandise that is a great value to clients.
These relationships, along with our vertical model, allow us to provide higher quality products at more competitive prices than both smaller independent operators and larger competitors.
We believe in p roviding a dynamic and welcoming experience in our Showrooms and online with the conviction that retail is theater.
Our Showrooms are highly inspirational and function as an invaluable brand awareness vehicle, while our eCommerce sales channel acts as a virtual extension of our Showrooms.
Our seasoned sales associates and in-home designers provide expert advice and assistance to our client base that drives significant client engagement.
Our omni-channel model allows clients to begin or end their shopping journey online, while also experiencing our theater-like Showrooms throughout the shopping journey.
As of December 31, 2024, we operated 103 Showrooms in 30 states, consisting of 85 Traditional Showrooms, 11 Design Studios and 7 Outlets.
Our business witnessed healthy performance over the last three years.
Our performance is summarized in the following table: Year Ended December 31, 2024 2024 2023 2022 Net revenue $1,271,107 $1,287,704 $1,228,928 Demand comparable growth (decline) (2.2) % 7.6 % 13.8 % Comparable growth (decline) (8.0) % 1.4 % 51.6 % Our long-standing direct sourcing partnerships were a significant contributor to our success, as many of our vendors increased capacity to help facilitate our net revenue growth.
We benefited from these important, long-term relationships as our vendors worked with us to help meet the unprecedented increase in client demand and relieve significant backlog that we had experienced in recent years.
Our Competitive Strengths A Differentiated Concept Delivering Livable Luxury We provide a differentiated concept, redefining the premium home furnishing market by offering an attractive combination of design, quality, value and convenience.
Artisan-crafted and globally curated, our products are highly differentiated from both small and large competitors.
We create merchandise that offers livable luxury style with elements of durability and practicality.
We serve our clients through our Showrooms and eCommerce sales channels, print and digital media and high-quality client service.
In a market characterized by small, independent competitors, we believe our premium lifestyle positioning, artisan-crafted style, superior quality, significant scale and level of convenience will enable us to increase our market share.
Highly Experiential Omni-Channel Approach We strive to offer our products to our clients via our omni-channel approach and operate our business in a channel agnostic way.
Leveraging our proprietary data and technology, we are able to meet our clients wherever they want to shop, whether online or in one of our 103 Showrooms.
Our product development and omni-channel go-to-market capabilities, together with our infrastructure and significant scale, enable us to offer a compelling combination of design, quality and value that we believe provides an unmatched experience.
Our theater-like Showrooms act as an exceptionally strong brand-building tool and drive significant traffic.
Our Traditional Showrooms average approximately 16,600 square feet.
Our smaller format Design Studios, which are located in areas such as affluent second home markets where a lower square footage format is preferred, average approximately 5,400 square feet. eCommerce .
Our online capabilities are an important entry point into our ecosystem, providing our clients with research and discovery tools and allowing them to begin or complete transactions online.
Our online design service professionals and virtual tools complement our eCommerce sales channel by engaging clients and providing them with expert design advice and capabilities.
Driven by investment in our digital platform, we believe we can increase our eCommerce penetration over time.
We distribute two large catalogs each year, a spring and a fall edition, in both an online and physical format to millions of households, which have yielded strong results.
We also distribute smaller mailers and postcards throughout the year to targeted audiences.
In addition, we advertise consistently across digital platforms and regularly partner with social media influencers to drive brand awareness.
Our print and digital media strategy drives both Showroom and eCommerce net revenue as it raises brand awareness and showcases new merchandise.
We welcome all clients to use our complimentary in-home designer services with no appointment required.

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