Arhaus Reports $1.271 Billion Revenue for Fiscal Year 2024, Net Income Drops to $68.6 Million

Arhaus, Inc. reported a net revenue of $1.271 billion for the fiscal year ended December 31, 2024, a decrease of 1.3% from $1.288 billion in 2023. The decline was attributed primarily to the non-recurrence of backlog deliveries that had positively impacted the previous year’s figures. The company's gross margin also fell to 39.4%, down from 42.0% in the prior year, reflecting increased occupancy costs and higher delivery expenses. Net income for 2024 was $68.6 million, a significant drop from $125.2 million in 2023, driven by the factors mentioned above.

In terms of operational metrics, Arhaus experienced a comparable sales decline of 8.0% in 2024, following a modest growth of 1.4% in 2023. Demand comparable growth also decreased by 2.2%, compared to a 7.6% increase in the previous year. The company operated 103 showrooms across 30 states as of December 31, 2024, an increase from 92 showrooms in 2023, which included the addition of 16 new showrooms and the closure of five for relocations. The total square footage of showrooms expanded to approximately 1.676 million square feet.

Strategically, Arhaus has focused on enhancing its omni-channel capabilities, with significant investments in digital marketing and eCommerce, which accounted for approximately 17% of total net revenue in 2024. The company aims to continue expanding its showroom footprint, targeting an increase to over 165 locations in the U.S. in the coming years. Additionally, Arhaus has been investing in its supply chain and technology infrastructure to improve operational efficiency and support future growth.

The company’s workforce grew to approximately 2,510 employees by the end of 2024, up from 2,400 in 2023. However, Arhaus acknowledged challenges in managing its supply chain and sourcing products effectively, which have impacted its ability to meet client demand. The company is also addressing material weaknesses in its internal controls over financial reporting, which were identified during the audit process, and is implementing a remediation plan to enhance its financial reporting processes.

Looking ahead, Arhaus remains optimistic about its growth potential, despite the current economic uncertainties affecting consumer spending. The company plans to leverage its unique product offerings and direct sourcing model to capture market share in the fragmented $100 billion U.S. premium home furnishings market. However, it cautions that fluctuations in economic conditions, housing market trends, and consumer preferences could significantly impact its future performance.