Arhaus (ARHS) Stock Forecast & Price Target

Arhaus Inc has demonstrated resilience in its demand, reflecting a year-to-date increase of 2.8% through the third quarter of 2025, alongside ongoing improvements in both retail and e-commerce sales, which rose by 8.1% and 7.5%, respectively. The company's strategic expansion, evidenced by a 30% growth in its showroom count over the past three years, has led to heightened brand awareness and a differentiated product offering. For the fourth quarter of 2025, Arhaus is guiding revenues between $336 million and $366 million, alongside an anticipated EBITDA margin of 8.5%, indicating a solid operational performance.

The demand for Arhaus's products in October experienced a significant decline of approximately 15%, a stark contrast to the 7% increase observed in the third quarter of the fiscal year 2025, which the company attributed to promotional timing changes. Financial projections indicate a potential gross margin contraction of 10 basis points, dropping to 38.5%, alongside flat EBITDA margins of 10.6%. Furthermore, the company faces multiple systemic risks, including commodity cost volatility, changing consumer spending patterns, rising interest rates, and decreased consumer confidence, all of which could negatively impact its financial performance.