Arhaus (ARHS) Stock Forecast & Price Target

Arhaus Inc. has demonstrated strong growth, with a 5.1% increase in fourth-quarter sales, reaching $365 million, which exceeded expectations. The company expects 2026 sales to grow between 3.7% and 6.6%, projecting revenues of $1.43 billion to $1.47 billion, supported by an expanding showroom count that has increased by 30% over the past three years. Additionally, the rise in inventory, partially attributed to strategic investments for store growth and the introduction of bestsellers, indicates a proactive approach to meet increasing demand and enhance brand awareness.

Arhaus Inc. has revised its sales growth estimates downward to 6.1% for the fiscal year 2025, reflecting a contraction in EBITDA margin to 10.1%, which indicates financial strain compared to previous projections. The company is grappling with a decline in comparable written orders by 2.8% in the fourth quarter, primarily due to poor performance in October attributed to the conclusion of a significant sales event. Furthermore, Arhaus faces increasing costs from tariffs, now projected to impact profitability by $30MM-$40MM, alongside challenges related to new showroom rents and unfavorable weather conditions that have adversely affected early sales momentum in 2026.