Arhaus (ARHS) Stock Forecast & Price Target

Arhaus Inc. has demonstrated growth, with year-to-date demand increasing by 2.8%, signifying a strengthening market position. The company's expansion, highlighted by a 30% increase in showroom count over the past three years, has contributed to heightened brand awareness and a differentiated shopping experience. Furthermore, Arhaus's 4Q25 revenue guidance reflects a potential increase of 3.3% to 5.4%, coupled with strong performance in both retail and e-commerce channels, which reported sales growth of 8.1% and 7.5%, respectively.

Arhaus Inc. experienced a significant decline in demand in October, reporting a decrease of approximately 15%, contrasting sharply with growth of 7% in 3Q25, which the company linked to a timing shift in promotional activities. The company's earnings projections indicate a flat EBITDA margin at 10.6%, alongside a forecasted contraction of gross margins by 10 basis points to 38.5%. Additionally, Arhaus faces multiple external risks, including volatility in commodity costs, rising interest rates, and declining consumer confidence, which collectively contribute to a pessimistic outlook on the company's financial stability and growth prospects.