Shares of luxury furniture retailer Arhaus, Inc. (NASDAQ:ARHS) surged over 5% in pre-market trading on Tuesday, despite the company reporting disappointing fiscal third-quarter results and issuing a weak outlook for the current quarter and full year.

For Q3 2024, Arhaus posted revenue of $319.1 million, missing analysts' estimates of $328.9 million. Earnings of $0.07 per share also fell short of expectations at $0.08. Looking ahead, the company guided for Q4 revenue of $316 million, below the consensus forecast of $327.5 million. Full-year EBITDA guidance of $120 million was likewise below the $131 million analysts projected.

Beyond the headline numbers, Arhaus saw a worrying 9.2% decline in same-store sales, reversing from solid growth in prior periods. The company operated 100 locations at quarter-end, up from 86 a year ago as it continues an aggressive expansion of its physical footprint. However, margins compressed significantly, with gross margin down nearly 8 percentage points year-over-year.