BOSTON HEIGHTS, Ohio - Arhaus, Inc. (NASDAQ: ARHS), a lifestyle brand and retailer of premium home furnishings, reported its unaudited financial results for the fourth quarter, which ended on December 31, 2023.
The company announced a fourth-quarter earnings per share (EPS) of $0.22, surpassing analyst expectations by $0.06, as consensus estimates predicted an EPS of $0.16. Revenue for the quarter was reported at $344 million, also exceeding the consensus estimate of $335.49 million.
Comparing year-over-year figures, Arhaus experienced a decrease in net revenue by 3.5% from $356 million in the fourth quarter of the previous year. This decline was attributed to a strong prior year delivery of orders in the backlog, which was only partially offset by favorable demand. The company's comparable growth dropped by 6.8%, while demand comparable growth was up by 1.6%.
Despite the revenue decline, the company's adjusted net income remained robust at $31 million for the quarter, although this was a decrease from $48 million in the same quarter the previous year. Adjusted EBITDA for the quarter was $51 million, a 30.9% decrease from the fourth quarter of 2022.
For the full year of 2023, Arhaus reported a net revenue increase of 4.8% to $1.3 billion compared to $1.2 billion in 2022, with a full-year comparable growth of 1.4%. However, net and comprehensive income for the year saw a decrease of 8.3% to $125 million compared to $137 million in the previous year.
Looking ahead, Arhaus provided guidance for the full year of 2024, with expected net revenue ranging between $1.33 billion and $1.37 billion, which is above the analyst consensus of $1.326 billion. The company anticipates a comparable growth of negative 4.0% to negative 2.0%, with net and comprehensive income projected to be between $95 million and $105 million. Adjusted EBITDA is expected to be between $185 million and $200 million for the year.
John Reed, Co-Founder and Chief Executive Officer of Arhaus, expressed confidence in the company's future, noting the record net revenue for 2023 and the company's strong cash generation and balance sheet strength. He also highlighted the company's strategy for growth and client-first service capabilities, as well as the announcement of a special cash dividend of $0.50 per share payable in April 2024.
Arhaus ended the year with a debt-free balance sheet and cash and cash equivalents totaling $223 million. The company plans to continue its expansion with the introduction of nine to eleven new Showrooms in 2024, along with several renovation, relocation, and expansion projects.
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