Arhaus, Inc. (ARHS) Q1 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

Decreasing 70 basis points to 36.4%, driven by higher fuel prices of 40 basis points and showroom occupancy costs of 40 basis points. Selling, general and administrative expenses increased 1.9% to $112,000,000 driven by a $1,900,000 increase primarily related to strategic investments to support and drive the growth of the business, including supply chain and technology improvements and other corporate expenses. As a result, SG and A load increased 40 basis points to 35.7%. Net income was 2,200,000 and within our guidance and adjusted EBITDA was $18,000,000 and within our guidance range. Adjusted EBITDA margin decreased 30 basis points year over year. As a reminder, there is seasonal impact to margins in the first quarter, which carries lower net revenue as a result of less operating leverage. Turning to our comparable metrics. Comparable delivered sales decreased 1.7% above the midpoint of our guidance range. Performance during the quarter was impacted by severe weather, our delayed catalog, as well as broader consumer softness tied to macroeconomic uncertainty, which weighed on overall delivery volumes. Comparable written sales decreased 5.7%, driven by a combination of factors. Weather related disruption in key markets reduced traffic during important promotional periods, including our semi annual storewide sale in January. In total, more than half of our showrooms experienced temporary closures at some point during the quarter due to adverse weather conditions. Additionally, the delayed timing of our spring catalog release as well as macroeconomic and geopolitical uncertainty, including the war in Iran, impacted comparable written sales. While comparable written sales were pressured during the quarter, trends improved meaningfully in the back half of March, where ...