We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Arhaus, Inc. (ARHS - Free Report) reported first-quarter 2024 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. However, both metrics declined from the year-ago quarter. The company saw a decline in comparable growth of 9.5% in the first quarter of 2024.
However, ARHS is actively expanding its physical and digital presence, opening showrooms in strategic locations and enhancing its e-commerce platform to improve customer experience. The company is optimistic about its performance for the remainder of 2024 and into 2025, buoyed by strong consumer demand for its diverse range of high-quality, handcrafted products.
Investments in new warehouse management systems aim to increase operational efficiency, aligning with ongoing efforts to drive sales and improve service delivery in both physical and online markets.
Arhaus posted earnings of 11 cents a share in the first quarter, beating the Zacks Consensus Estimate of 2 cents. This compares with earnings of 25 cents a year ago.
Net revenues were $295.2 million, down 3.1% year over year. However, the top line surpassed the Zacks Consensus Estimate of $263 million.
The gross profit amounted to $115.1 million, down 10.3% from the $128.2 million reported in the year-ago quarter. The gross margin contracted 310 basis points (bps) to 39%. The downside can be attributed to lower net revenues and higher Showroom costs as the company continues to expand its footprint.
Selling and administrative expenses rose 16.8% year over year to $96.7 million. This increase was mainly due to higher selling expenses associated with new Showrooms and robust demand, elevated corporate expenses as the company continues to invest in strategic initiatives to support and fuel business growth, and rising warehouse costs as the Dallas location enhances its productivity. We note that, as a percentage of net revenues, selling and administrative expenses increased 560 bps to 32.8%.
Adjusted EBITDA declined 46.9% to $29.1 million from $54.8 million in the first quarter of 2024. The adjusted EBITDA margin slipped 810 bps to 9.9% in the quarter under review.
Image Source: Zacks Investment Research
Other Financial Details
Arhaus ended the quarter with cash and cash equivalents totaling $233.2 million as of Mar 31, 2024. The company has no long-term debt. Net cash provided by operating activities was $37 million for the three months ended Mar 31, 2024, compared with $11 million for the three months ended Mar 31, 2023.
Guidance
For the second quarter of 2024, Arhaus expects net revenues of $310-$320 million. Comparable growth is anticipated between a 9% and a 7% year-over-year decline. Management expects a net income of $14-$18 million. Adjusted EBITDA is likely to be $33-$38 million.
For 2024, Arhaus expects net revenues of $1.33-$1.37 billion. In 2023, Arhaus reported net revenues of $1.3 billion. Comparable growth is anticipated between a 4% and a 2% year-over-year decline. Management expects a net income of $95-$105 million.
Adjusted EBITDA is likely to be $185-$200 million. The effective tax rate is estimated at ~26% for 2024.
Management anticipates a capital expenditure of $80-$100 million for 2024. In 2024, the company intends to open between nine and 11 Showrooms and will also renovate, relocate and expand several existing locations.
Shares of this Zacks Rank #3 (Hold) company have gained 28% in the past three months against the industry's decline of 2.3%.
Key Picks
Some better-ranked stocks in the same space are The Gap, Inc. (GPS - Free Report) , American Eagle Outfitters Inc. (AEO - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) .
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GPS’s current fiscal-year earnings and sales indicates declines of 0.3% and 4.9%, respectively, from the year-ago period’s reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. The company currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for American Eagle’s current fiscal-year earnings and sales indicates growth of 12.5% and 3.4%, respectively, from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 22.7%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. The company presently has a Zacks Rank of 2. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie’s current fiscal-year earnings and sales indicates growth of 20.1% and 5.9%, respectively, from the year-ago period’s reported figures.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Arhaus (ARHS) Q1 Earnings Beat Estimates, Revenues Decline Y/Y
Arhaus, Inc. (ARHS - Free Report) reported first-quarter 2024 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. However, both metrics declined from the year-ago quarter. The company saw a decline in comparable growth of 9.5% in the first quarter of 2024.
However, ARHS is actively expanding its physical and digital presence, opening showrooms in strategic locations and enhancing its e-commerce platform to improve customer experience. The company is optimistic about its performance for the remainder of 2024 and into 2025, buoyed by strong consumer demand for its diverse range of high-quality, handcrafted products.
Investments in new warehouse management systems aim to increase operational efficiency, aligning with ongoing efforts to drive sales and improve service delivery in both physical and online markets.
Arhaus, Inc. Price, Consensus and EPS Surprise
Arhaus, Inc. price-consensus-eps-surprise-chart | Arhaus, Inc. Quote
Q1 Performance in Detail
Arhaus posted earnings of 11 cents a share in the first quarter, beating the Zacks Consensus Estimate of 2 cents. This compares with earnings of 25 cents a year ago.
Net revenues were $295.2 million, down 3.1% year over year. However, the top line surpassed the Zacks Consensus Estimate of $263 million.
The gross profit amounted to $115.1 million, down 10.3% from the $128.2 million reported in the year-ago quarter. The gross margin contracted 310 basis points (bps) to 39%. The downside can be attributed to lower net revenues and higher Showroom costs as the company continues to expand its footprint.
Selling and administrative expenses rose 16.8% year over year to $96.7 million. This increase was mainly due to higher selling expenses associated with new Showrooms and robust demand, elevated corporate expenses as the company continues to invest in strategic initiatives to support and fuel business growth, and rising warehouse costs as the Dallas location enhances its productivity. We note that, as a percentage of net revenues, selling and administrative expenses increased 560 bps to 32.8%.
Adjusted EBITDA declined 46.9% to $29.1 million from $54.8 million in the first quarter of 2024. The adjusted EBITDA margin slipped 810 bps to 9.9% in the quarter under review.
Image Source: Zacks Investment Research
Other Financial Details
Arhaus ended the quarter with cash and cash equivalents totaling $233.2 million as of Mar 31, 2024. The company has no long-term debt. Net cash provided by operating activities was $37 million for the three months ended Mar 31, 2024, compared with $11 million for the three months ended Mar 31, 2023.
Guidance
For the second quarter of 2024, Arhaus expects net revenues of $310-$320 million. Comparable growth is anticipated between a 9% and a 7% year-over-year decline. Management expects a net income of $14-$18 million. Adjusted EBITDA is likely to be $33-$38 million.
For 2024, Arhaus expects net revenues of $1.33-$1.37 billion. In 2023, Arhaus reported net revenues of $1.3 billion. Comparable growth is anticipated between a 4% and a 2% year-over-year decline. Management expects a net income of $95-$105 million.
Adjusted EBITDA is likely to be $185-$200 million. The effective tax rate is estimated at ~26% for 2024.
Management anticipates a capital expenditure of $80-$100 million for 2024. In 2024, the company intends to open between nine and 11 Showrooms and will also renovate, relocate and expand several existing locations.
Shares of this Zacks Rank #3 (Hold) company have gained 28% in the past three months against the industry's decline of 2.3%.
Key Picks
Some better-ranked stocks in the same space are The Gap, Inc. (GPS - Free Report) , American Eagle Outfitters Inc. (AEO - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) .
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GPS’s current fiscal-year earnings and sales indicates declines of 0.3% and 4.9%, respectively, from the year-ago period’s reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. The company currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for American Eagle’s current fiscal-year earnings and sales indicates growth of 12.5% and 3.4%, respectively, from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 22.7%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. The company presently has a Zacks Rank of 2. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie’s current fiscal-year earnings and sales indicates growth of 20.1% and 5.9%, respectively, from the year-ago period’s reported figures.