Arhaus entered the first quarter of 2025 with ongoing challenges that weighed on financial results, as the company’s revenue and adjusted profit both missed Wall Street expectations. Management attributed the performance to higher showroom occupancy costs, increased product and delivery expenses, and persistent macroeconomic volatility. CEO John Reed highlighted that while demand was healthy in January and March, the company experienced a significant slowdown in February and April, which they linked to external shocks such as tariff announcements and stock market fluctuations. Reed acknowledged, “We had the stock market crashing in April. Obviously, that affects everybody, including our customers... It's not going to be long term, but short term, it shakes people up.”

Is now the time to buy ARHS? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Arhaus’s Q1 Earnings Call

• Julio Marquez (Guggenheim Securities) asked how Arhaus plans to protect margins amid tariff pressures and whether 2025 is a year for brand building or volume capture. CEO John Reed responded that the company aims to maintain healthy margins and adapt sourcing as needed, focusing on long-term execution.
• Sabrina (Barclays, for Seth Sigman) questioned how the negative 5% comparable growth scenario was determined and how volatility is reflected in guidance. CFO Ryan Brody explained that the wider range accounts for ongoing choppiness in demand, with management prepared to adjust plans as conditions evolve.
• Cristina Fernandez (Telsey Advisory Group) inquired about the effectiveness and timing of tariff mitigation strategies. Reed and Brody detailed efforts to shift sourcing out of China, with most cost impact anticipated in the second half of the year and significant support from vendor partners.
• Peter Benedict (Baird) asked about the impact of promotional changes and spend thresholds on consumer behavior. Reed noted that the company’s flexible “buy more, save more” model encourages higher spending, and management continues to test different discount structures to optimize engagement.
• Jeremy Hamblin (Craig-Hallum) pressed on whether showroom expansion plans might slow amid market uncertainty. Reed affirmed that Arhaus will continue opening new showrooms as planned, citing strong cash position and belief in capturing pent-up demand when conditions improve.

Catalysts in Upcoming Quarters

Looking ahead, our analysts will be watching (1) how effectively Arhaus executes further supply chain shifts and tariff mitigation, (2) whether showroom expansion continues to deliver incremental sales and engagement, and (3) the impact of new operational technology on margin trends and client experience. We will also monitor consumer demand trends, especially among affluent clients, and any strategic pricing adjustments as the tariff landscape evolves.

Arhaus currently trades at $8.82, up from $8.37 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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