Arhaus, Inc. ARHS, a premium home furnishings retailer, has announced an upward revision to its revenue expectations for the fourth quarter and fiscal 2024, showcasing positive momentum and robust demand comparable growth. Despite a low-single-digit demand comparable decline in October, the company achieved a 6% increase in demand comparable growth in the final quarter. 

This performance underscores the success of Arhaus’ investments in new product offerings, showroom expansion and enhanced omni-channel capabilities.

ARHS’ Upgraded Outlook for Q4 and FY24

Building on this strong performance, Arhaus has raised its revenue guidance for the fourth quarter and fiscal 2024. For the fourth quarter, the company now expects net revenues to range from $343 million to $353 million, up from the previous expectation of $306 million to $326 million. Comparable growth for the quarter is now anticipated to decline between 6% and 7%, an improvement from the previously expected low double-digit demand comp decline.

For fiscal 2024, Arhaus expects net revenues to fall between $1.27 billion and $1.28 billion, indicating an increase of approximately $35 million from a previous projection of $1.23 billion to $1.25 billion.

However, despite the upward revision, this Zacks Rank #3 (Hold) company anticipates a comparable growth decline of 8-9% for the full year due to lapping last year’s abnormal backlog deliveries. This is an improvement over the previously forecasted decline of 11-12%.

ARHS’ Leadership Transition

Arhaus also announced the resignation of chief financial officer Dawn Phillipson, who is leaving to pursue a new opportunity. Acknowledging her nine-year tenure, the company’s co-founder and chief executive officer highlighted her instrumental role in driving the company’s success.

More on ARHS

Arhaus faces a series of unfavorable dynamics, including shifting consumer dynamics, margin compression, rising costs and intensifying competition. Nonetheless, management remains optimistic about long-term growth, driven by strategic investments and product innovation.

Arhaus is making significant investments in its infrastructure, technology and operational efficiency to support sustained growth. The company is currently upgrading its warehouse management system and implementing new enterprise resource planning systems at ARHS’ upholstery manufacturing facility. These upgrades will enhance margin visibility and improve production capabilities, laying the foundation for continued growth in the years to come.

Arhaus is strategically expanding its footprint to reach new customer bases and strengthen the company’s presence in key markets. As of the third quarter of 2024, Arhaus launched 10 new showrooms, reinforcing its goal of reaching 165 traditional locations in the years ahead. With a footprint of more than 100 showrooms and design centers across the United States, the company is well-positioned to expand its presence in the $100 billion premium home furnishings market.

Shares of Arhaus have lost 16.1% in the past month compared with the industry and S&P 500's decline of 2.9% and 2.7%, respectively.

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Stocks to Consider

Five Below, Inc. FIVE operates as a specialty value retailer that offers a range of accessories. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Five Below’s current financial-year sales indicates growth of 8.5% from the year-ago reported numbers. FIVE delivered a trailing four-quarter earnings surprise of 39%, on average. 

Williams-Sonoma, Inc. WSM operates as an omni-channel specialty retailer of various products for home, currently carrying a Zacks Rank #2 (Buy). WSM delivered a trailing four-quarter average earnings surprise of 17.8%. 

The Zacks Consensus Estimate for Williams-Sonoma’s current financial-year earnings indicates a rise of around 11.6% from the year-earlier levels. 

Ollie’s Bargain Outlet Holdings, Inc. OLLI, operates as a retailer of brand-name merchandise in the United States which offers housewares, bed and bath, food, floor coverings, health and beauty aids, books and stationery, toys, and electronics, and other products. The company currently holds a Zacks Rank #2.

The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings indicates a rise of around 8.3% and 13.1%, respectively, from the year-earlier levels. OLLI delivered a trailing four-quarter earnings surprise of 5%, on average.

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