What Happened?

Shares of luxury furniture retailer Arhaus (NASDAQ:ARHS) fell 8.4% in the afternoon session after the company reported weak fourth-quarter 2024 results: its full-year EBITDA guidance missed significantly and its EBITDA guidance for next quarter fell short of Wall Street's estimates. Revenue growth was flat and comparable sales declined by 6.4%, reflecting weaker consumer demand​. On the other hand, Arhaus beat analysts' EBITDA expectations this quarter and its gross margin outperformed Wall Street's estimates. Overall, this was a weaker quarter.

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What The Market Is Telling Us

Arhaus’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 7 months ago when the stock dropped 26.3% on the news that the company reported second-quarter earnings results. It cited a soft consumer landscape and lowered its full-year revenue and EBITDA guidance, which fell short of Wall Street's estimates. In addition, revenue came in below expectations during the quarter. Overall, this was a weaker quarter for the company.

Arhaus is up 13.7% since the beginning of the year, but at $10.71 per share, it is still trading 45.6% below its 52-week high of $19.68 from June 2024. Investors who bought $1,000 worth of Arhaus’s shares at the IPO in November 2021 would now be looking at an investment worth $836.54.

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