Arhaus (ARHS) has just wrapped up FY 2025 with fourth quarter revenue of US$364.8 million and basic EPS of US$0.11, supported by trailing 12 month revenue of about US$1.4 billion and EPS of US$0.48 that frame the latest print in a fuller year context. Over recent quarters the company has seen revenue progress from US$311.4 million in Q1 2025 to US$364.8 million in Q4 2025, while quarterly EPS moved from US$0.03 to US$0.11 across the same period, giving you a clear view of how top line and per share earnings have tracked into this result. With trailing net profit margins slightly lower than a year ago, the story now turns to how investors weigh the earnings growth forecasts against the pressure on profitability.

See our full analysis for Arhaus.

With the headline numbers on the table, the next step is to set these results against the most common narratives around Arhaus to see which storylines hold up and which start to look out of date.

Margins Softer Despite TTM Profit Of US$67.3 Million

• Over the last 12 months, Arhaus earned US$67.3 million of net income on US$1.38b of revenue, giving a 4.9% net margin compared with 5.4% a year earlier.
• What stands out for the bullish view is that earnings quality is described as high, yet the 4.9% trailing margin and one year of weaker earnings versus the 19.7% five year average growth leave less room for error than a simple growth story suggests.
  • Bulls point to forecast earnings growth of about 10.6% a year and revenue growth of about 6.4% a year, which sit against this recent step down in margins.
  • If you buy into the bullish case that premium, sustainable furnishings and omnichannel investments can support higher margins over time, this 4.9% starting point is an important reality check on how much improvement needs to show up in future numbers.

Analysts who lean optimistic argue that recent spending on showrooms and digital should eventually show up in stronger profitability, so this margin picture is a key test of how quickly that bullish story can play out for shareholders. 🐂 Arhaus Bull Case

Mixed Valuation Signals Against US$7.59 Share Price

• With the stock at US$7.59, Arhaus trades on a trailing P/E of 15.9x, which is lower than the US Specialty Retail industry average of 19.8x yet described as expensive versus a 2.7x peer average. A DCF fair value of US$15.56 sits well above the current price.
• Bears focus on the risk that softer recent earnings and margin compression do not fully justify even a 15.9x P/E, especially when some peers are referenced at 2.7x, and argue that showroom expansion and fixed costs could weigh on future profitability if demand is weaker than expected.
  • That concern leans on the fact that trailing net margin has moved from 5.4% to 4.9%, so the current P/E is being applied to earnings that are already below the company’s five year earnings growth trend of 19.7% a year.
  • At the same time, a DCF fair value of US$15.56 signals a very different view of what those same cash flows are worth, so anyone sharing the cautious stance needs to be comfortable that margin pressure or slower growth could explain why the market price is well below that estimate.

Skeptical investors often point out that when recent margins are softer and peer P/E comparisons look demanding, relying on a much higher DCF fair value can be risky if earnings or cash flows do not match those assumptions. 🐻 Arhaus Bear Case

Same Store Sales Swing While TTM Growth Forecast Sits At 6.4%

• Within the year, same store sales moved from 4.1% in Q1 2025 to a 3.6% decline in Q2, then 7.4% growth in Q3, while the trailing 12 month same store sales figure is 1.3% and revenue is forecast to grow about 6.4% a year.
• Consensus narrative leans on the idea that premium, customizable and sustainable furnishings plus showroom expansion can support steady revenue and margin growth, yet the swing in quarterly same store sales and a modest 1.3% trailing same store sales figure show that demand has been choppy even as analysts look for smoother mid single digit revenue growth over time.
  • The 1.3% trailing same store sales outcome and 4.9% net margin have to carry the weight of forecasts that earnings grow about 10.6% a year, which assumes better profitability on top of that sales base.
  • For you as an investor, it means those growth expectations rest on the company converting its premium positioning and showroom investments into more consistent store level performance rather than the mixed pattern seen across the last few quarters.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Arhaus on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If the mix of growth expectations and margin pressure leaves you undecided, now is a good time to look through the numbers yourself and stress test the narrative against your own assumptions, then weigh that view against the 2 key rewards

See What Else Is Out There

Arhaus is working through softer net margins, mixed same store sales and questions around whether its current P/E and DCF gap are fully justified by performance.

If those margin pressures and choppy store results worry you, it makes sense to compare them with companies screened as having 74 resilient stocks with low risk scores so you can focus on steadier prospects now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.