Arhaus: Industry Pressure Clouds Showroom Earnings Growth (Rating Downgrade)

  • Arhaus, Inc. has reported declining earnings, still continuing in Q1. An uncertain consumer and a weak housing market have contributed towards significant industry pressure. Despite the challenging environment, Arhaus continues to invest in showroom expansion. The company's healthy balance sheet and cash flow allow continued expansion. While the industry should eventually recover, I now estimate margins more conservatively in a DCF model. I estimate a fair value of $8.9.