What Happened?
Shares of luxury furniture retailer Arhaus (NASDAQ: ARHS) jumped 4.1% in the morning session after positive results from industry peer Wayfair lifted sentiment for the home furniture retail sector. Wayfair reported a significant 8.1% year-over-year increase in its third-quarter revenue, sending its own stock soaring. Analysts noted that the strong performance pointed to "escalating furniture demands" and positive growth trends for the industry. This broad optimism appeared to benefit Arhaus, which had also recently delivered strong second-quarter results. Arhaus had posted a 15.7% revenue increase, outperforming analysts' expectations. The combination of its own solid performance and a favorable outlook for the entire furniture market fueled investor confidence.
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What Is The Market Telling Us
Arhaus’s shares are extremely volatile and have had 41 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 8 months ago when the stock dropped 8.4% on the news that 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.
Arhaus is up 16.5% since the beginning of the year, but at $10.98 per share, it is still trading 15.4% below its 52-week high of $12.98 from February 2025. Investors who bought $1,000 worth of Arhaus’s shares at the IPO in November 2021 would now be looking at an investment worth $857.63.
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