Arhaus Inc (NASDAQ:ARHS), the premium home furnishings retailer, reported financial results for the fourth quarter and full year 2025, delivering revenue that modestly exceeded analyst expectations while earnings per share came in slightly ahead of consensus. The company also announced a special cash dividend, highlighting its strong balance sheet and cash generation. Investor reaction in pre-market trading was notably positive, with shares rising over 7%.
Fourth Quarter Performance vs. Estimates
For the critical holiday quarter ending December 31, 2025, Arhaus posted net revenue of $364.8 million, a 5.1% increase compared to the same period in 2024. This top-line result edged past the analyst consensus estimate of approximately $358.3 million. The company's performance was driven by a combination of new showroom contributions and comparable delivered sales growth of 3.6% for the full year, which exceeded the high end of its own guidance.
On the bottom line, the company reported net income of $15.1 million, or $0.11 per diluted share. This figure surpassed the analyst estimate for non-GAAP EPS of $0.096. While net income declined year-over-year from $21.3 million in Q4 2024, the earnings beat relative to expectations appears to be a key factor in the positive market response.
Full Year 2025 Results and Capital Return
For the full fiscal year 2025, Arhaus achieved record net revenue of $1.38 billion, an increase of 8.5%. However, net income saw a slight decrease of 1.9% to $67.3 million. A significant highlight from the report was the declaration of a special cash dividend of $0.35 per share, payable in March 2026. This marks the second such special dividend since the company's initial public offering and is framed by management as a reflection of a "debt-free balance sheet" and substantial liquidity, with cash and equivalents growing 28.3% year-over-year to $253 million.
Forward Outlook and Analyst Comparisons
Management provided guidance for the 2026 fiscal year, which offers a mixed picture when held against current analyst forecasts.
- Full-Year 2026 Revenue Guidance: Arhaus expects net revenue between $1.43 billion and $1.47 billion, representing growth of 3.7% to 6.6%. The midpoint of this range is approximately $1.45 billion.
- Analyst Sales Estimate for 2026: The consensus analyst sales estimate for FY 2026 stands at $1.48 billion.
- Q1 2026 Revenue Guidance: The company anticipates Q1 revenue between $300 million and $320 million, implying a potential decline of 3.7% to growth of 2.8%.
- Analyst Sales Estimate for Q1 2026: Analysts were expecting Q1 sales of approximately $335.1 million.
The company's revenue guidance for both the coming quarter and the full year appears cautious relative to the Street's expectations, potentially tempering some investor enthusiasm. However, the guidance for Adjusted EBITDA of $150 million to $161 million for FY 2026 suggests a focus on maintaining profitability.
Market Reaction and Key Takeaways
The strong pre-market gain of over 7% suggests investors are focusing on the quarterly earnings beat, the announcement of the special dividend, and the company's robust financial position. The market is likely interpreting the dividend as a confident signal from management regarding sustainable cash flow, outweighing concerns about a potentially conservative growth outlook for the near term.
Key elements from the earnings release include:
- A top and bottom-line beat for Q4 2025.
- The declaration of a $0.35 per share special cash dividend.
- A debt-free balance sheet with significant cash reserves.
- Continued showroom expansion, with 107 locations at year-end and plans for 4-6 new openings in 2026.
- Full-year guidance that implies steady but potentially slower growth compared to 2025.
For a detailed look at historical earnings, future estimates, and analyst projections for Arhaus, visit the earnings and estimates page on Chartmill.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
