BOSTON HEIGHTS, Ohio — Top 100 retailer Arhaus maintained its run of quarterly gains in the third quarter of FY 2023, outpacing its 2022 levels.
The Boston Heights, Ohio-based retailer posted net revenue of $326.2 million for the three months ended Sept. 30, up 1.9% vs. $320 million in the third quarter of 2022.
It tallied $19.741 million, or 14 cents per diluted share in the three months, down 46.55% compared with $36.936 million, or 26 cents per diluted share. The company attributed the decline in income to a $10 million donation to The Nature Conservancy, higher selling expenses related to new showrooms and higher corporate expenses to support the growth of the business.
Adjusted EBITDA decreased 40.6% to $34 million compared with $57 million in the third quarter of 2022, giving Arhaus an EBITDA margin of 10.32%.
“We are very pleased with our third quarter financial performance and are raising the midpoint of our full year outlook for net revenue, net income and adjusted EBITDA,” said John Reed, CEO and co-founder. “We had another exceptional quarter of demand comparable growth in the third quarter, up 11.7%. We experienced strong demand across all regions, products and channels.
“Our new product launches in September have been incredibly well-received by our clients, and these industry-leading product designs elevated both our fall catalog and the look and feel of our inspirational showrooms.”
Through the first nine months of FY2023, Arhaus recorded net revenue of $943.7 million, up 8.15% from $872.6 million. Net income totaled $94 million, or 67 cents per diluted share, an increase of 4.9% compared with $89.6 million, or 64 cents per share, through three quarters of 2022.
Arhaus’ adjusted EBITDA through three quarters stood at $152.2 million, giving it an EBITDA margin of 16.1%.
Reed said Arhaus will continue to add to its store count through the remainder of this year. He noted that the company opened recently in West Hartford, Conn., and has openings slated for Coral Gables, Fla., and Huntington Station, N.Y., this month, as well as three California showrooms in the pipeline for December.
“As we close out this year and begin to look to 2024, we are focused on continuing to expand our collections of heirloom quality, artisan-crafted furniture, growing our showroom footprint with several more exciting new locations to come in 2024, and improving our systems and making the necessary investments to support our growth for many years into the future,” Reed said.
Looking ahead, Arhaus is adjusting its year-end guidance to $1.265 billion to $1.285 billion in net revenues compared with $1.25 billion to $1.29 billion, and net income to $112.5 million to $117.5 million, vs. $102.5 million to $112.5 million.