Arhaus, Inc.

Net revenue was approximately $385 million in Q2, up 7.4% year over year, and the company said it was the highest net revenue in its 40-year history. Gross profit was $172 million, up 16.1%, and gross margin was 44.7%, up 330 basis points year over year. Net income was $40 million, up 13.1%, adjusted EBITDA was $70 million, up 16.8%, comparable delivered sales increased 4%, and comparable written sales increased 12.5%. Excluding the $23.8 million IEEPA tariff benefit, gross profit would have been $157 million and gross margin would have been 40.7%; excluding the tariff benefit, adjusted EBITDA would have been $55 million and adjusted EBITDA margin would have been 14.3%. For full year 2026, management expects net revenue of $1.43 billion to $1.47 billion, comparable delivered sales of flat to positive 3%, net income of $71 million to $80 million, and adjusted EBITDA of $160 million to $171 million. For Q3 2026, the company expects net revenue of $355 million to $375 million, comparable delivered sales of minus 1% to positive 5%, net income of $8 million to $13 million, and adjusted EBITDA of $26 million to $34 million.

John Reed framed the quarter as evidence that the Arhaus brand and high-end customer remain resilient, with stronger engagement, larger projects, and no meaningful trade-down. He emphasized product differentiation, especially newness, customization, and the ability to serve whole-home projects across core customer, interior design, and trade channels. His tone was upbeat but still measured, with repeated references to a dynamic environment and a focus on disciplined growth heading into fall.

Michael Lee said the quarter beat expectations across key metrics for the seventh straight quarter, but results were aided by a discrete tariff refund benefit. He detailed a $37.8 million IEEPA tariff refund request, $32.7 million receivable, and $5.1 million cash received by quarter end; the quarter included a $23.8 million benefit in cost of goods sold, with a $14 million inventory reduction benefit, and as of the call the full refund had been received in cash. He also cited $226 million in cash and cash equivalents, $354 million in net merchandise inventory, $264 million of client deposits, and an estimated $30 million to $40 million tariff impact for 2026; he said the company is using tariff recoveries to fund $7 million to $10 million of 2026 reinvestment in catalogs, marketing, digital, and POS, while offsetting fuel and shipping pressures.

Analysts pressed on what drove the acceleration in demand, whether new customers or pricing were contributing, and management said new vs. existing customer mix was broadly unchanged while average ticket, units per transaction, and large orders all improved. Questions also focused on the trade program, which John Reed said is just getting started and is adding thousands of members per month after changing compensation to let trade customers choose between commission and discount. Other questions centered on margin noise and second-half sustainability; management said Q2 SG&A was elevated by technology and selling costs tied to written-sales timing, and that the company is intentionally investing in catalogs, digital, and POS while remaining cautious on the macro outlook.