Arhaus Raises 2026 Sales Outlook After Record Q3 Revenue

Arhaus Inc. (NASDAQ: ARHS) raised its full-year net revenue and comparable delivered sales outlook after third-quarter revenue increased 6.8% year over year to a record $368 million. Comparable written sales rose 13.9%, indicating stronger order activity than the quarter’s delivered-sales growth as the furniture retailer converts customer orders into recognized revenue over time.

For the year to date, comparable written sales increased 6.7%, while comparable delivered sales gained 1.8%. In the third quarter, comparable delivered sales rose 2.6%. Arhaus recognizes revenue when products are delivered, so the timing of production, customization and logistics can create a lag between written orders and reported sales.

The company attributed the written-sales performance to new product introductions, expanded customization and demand for its interior design and trade programs. Increased catalog circulation, targeted marketing and promotional events also supported traffic and client engagement, according to the presentation.

Full-Year Sales Outlook Raised

Arhaus now expects 2026 net revenue of $1.465 billion to $1.485 billion, representing growth of 6.2% to 7.7%. Comparable delivered sales are projected to increase 2.5% to 4.0% for the year.

The company forecast full-year GAAP net income of $71 million to $80 million and adjusted EBITDA of $160 million to $171 million. Arhaus said the latest quarter marked its eighth consecutive quarter of meeting or exceeding guidance, with the sales outlook increase following a profitability guidance increase in the second quarter.

For the fourth quarter, management expects revenue of $398 million to $418 million, up 9.1% to 14.6% year over year. Comparable delivered sales are projected to grow 6% to 12%, while GAAP net income is expected to range from $21 million to $30 million and adjusted EBITDA from $44 million to $55 million.

The higher revenue outlook is expected to provide approximately $4 million to $5 million of incremental profitability. Arhaus also plans about $3 million of spending to expand circulation of its spring catalog and support 2027 demand, along with roughly $2 million for digital and e-commerce initiatives intended to reach customers beyond its showroom network.

Showrooms Remain Central to Expansion

Arhaus expects to open four to six new showrooms in 2026 and complete six to eight relocations, renovations or expansions, for a total of 10 to 14 showroom projects. Net unit growth is expected to be in the mid-single-digit percentage range, and company-funded capital expenditures are projected at $70 million to $90 million.

Management views physical locations as the hub of its integrated retail model. More than 90% of 2025 sales came from customers living within 50 miles of an Arhaus showroom. Locations opened since 2019 accounted for approximately 24% of fiscal 2025 revenue and about 37% of the company’s incremental revenue growth over that period.

At the end of 2025, Arhaus operated 107 locations across 31 states, comprising 90 traditional showrooms, nine design studios and eight Loft locations. Management estimates a longer-term domestic opportunity of approximately 165 traditional showrooms and 50 design studios, including existing locations, though it cautioned that those estimates may change with market conditions.

Interior design is another focus because design-supported orders generated an average order value about four times that of standard orders in 2025. The company said both its interior design and trade channels recorded strong growth during the third quarter.

Technology and Distribution Investment Continues

Arhaus is continuing a multiyear digital transformation covering transportation, point-of-sale, enterprise resource planning and order-management systems. A transportation management system is live, while a modern point-of-sale pilot is scheduled to begin in the fourth quarter of 2026, with deployment planned for the first quarter of 2027.

The ERP and order-management systems are targeted to become production-ready in May 2027, with a phased launch planned for May or August to reduce disruption risk. Transformation cash outflows are expected to decline from approximately $12 million in 2027 to about $6 million annually from 2028 through 2030. Management expects its technology and distribution investments to support efficiency and longer-term margin improvement, but those outcomes are targets rather than financial guidance.

The company identified several uncertainties that could affect its plans, including tariffs and changes in trade policy, supply-chain constraints, vendor quality, transportation costs, cybersecurity threats and weaker consumer confidence or spending. Arhaus also cited execution risks related to technology upgrades and the integration of its distribution centers. Its outlook additionally depends on maintaining showroom traffic, anticipating consumer preferences and converting written orders into delivered revenue on expected timelines.