Arhaus (ARHS) investor relations material

Executive summary

• Q2 2026 achieved record net revenue of $385 million, up 7.4% year-over-year, with 12.5% growth in Comparable Written Sales and 4.0% in Comparable Delivered Sales, driven by strong demand, showroom expansion, and robust engagement from high-end consumers.

• Gross margin increased 16.1% to $172 million, benefiting from $23.8 million in IEEPA tariff recoveries.

• Net and comprehensive income for Q2 2026 was $40 million, up 13.1% year-over-year; adjusted EBITDA reached $70 million, up 16.8%.

• Showroom expansion continued, with new and relocated locations performing ahead of expectations and 109 showrooms operating in 31 states.

• Strong engagement from core customers, interior design, and trade channels, with no evidence of trade-down.

Financial highlights

• Net revenue for Q2 2026 reached $385 million, the highest in company history, up 7.4% year-over-year.

• Gross profit was $172 million, up 16.1% year-over-year, including a $23.8 million benefit from IEEPA tariff recovery.

• Net income reached $40 million, up 13.1% year-over-year; adjusted EBITDA was $70 million, up 16.8%.

• Gross margin for Q2 2026 was 44.7% (up 330 bps); normalized at 40.7% (down 70 bps) excluding tariff benefit.

• SG&A expenses rose 16.1% year-over-year, driven by investments in technology, marketing, and new showrooms.

Outlook and guidance

• Full-year 2026 net revenue expected between $1.43 billion and $1.47 billion, up 3.7% to 6.6%.

• Net income guidance raised to $71–$80 million; adjusted EBITDA expected at $160–$171 million, reflecting one-time tariff recovery.

• Q3 2026 net revenue expected between $355 million and $375 million, with net income of $8–$13 million and adjusted EBITDA of $26–$34 million.

• Guidance assumes no significant improvement in housing turnover or macroeconomic environment.

• Capital expenditures for 2026 projected at $70–$90 million, focused on new showrooms and IT infrastructure.