Arhaus, Inc. ARHS sees a significant long-term growth opportunity within the U.S. interior design market, which management estimates to be approximately $27 billion. The company believes expanding its presence and reach within this channel represents an important avenue for future growth and broader market penetration.
The company continues to see strong demand, driven by its interior designers, who remain a key contributor to the company's business. Projects supported by its designers generate higher order values, foster stronger repeat customer engagement and provide improved visibility into future project activity. In the first quarter of fiscal 2026, Arhaus' interior designers contributed a significant share of the company's total sales. Management expects this contribution to continue growing, underscoring the importance of its designer-led sales strategy in driving customer engagement and future business opportunities.
Arhaus continues to prioritize its relationships with core customers, including clients who engage with its interior designers and trade partners. Management views these relationships as central to building customer loyalty, deepening engagement and expanding market share. The company believes maintaining strong connections with these key customer groups is particularly important during periods of macroeconomic uncertainty, as they help reinforce customer relationships and support its competitive positioning.
Additionally, the company recently launched its redesigned Arhaus Trade program, developed with feedback from its trade community to strengthen relationships with design professionals, builders and developers. The program offers personalized order support, access to exclusive products and a customized trade dashboard with 3D and 2D planning tools to better serve clients. Overall, Arhaus views the interior design channel as a significant long-term growth opportunity, offering opportunities to deepen professional partnerships, expand its reach within the channel and support higher order values, stronger repeat customer engagement and improved visibility into future project activity.
The Zacks Rundown for ARHS
Shares of ARHS have lost 4.1% in the past three months compared with the industry’s decline of 13.2%.
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From a valuation standpoint, ARHS trades at a forward price-to-earnings ratio of 14.79X, higher than the industry’s average of 14.67X. ARHS currently carries a Zacks Rank #3 (Hold).
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The Zacks Consensus Estimate for ARHS’ current fiscal year earnings implies a 2.1% year-over-year decline, while the same for next fiscal year earnings implies a 13.3% year-over-year increase.
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Stocks to Consider
Some better-ranked stocks have been discussed below:
Five Below, Inc. FIVE operates as a specialty value retailer in the United States. At present, Five Below sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FIVE’s current fiscal-year sales and earnings implies growth of 14.8% and 35.1%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 70.1%, on average.
Victoria’s Secret & Co. VSXY operates as a specialty retailer of women's intimate apparel and other apparel and beauty products worldwide. At present, VSXY carries a Zacks Rank of 1.
The Zacks Consensus Estimate for Victoria's Secret’s current fiscal-year sales and earnings implies growth of 9% and 55%, respectively, from the year-ago figures. VSXY delivered a trailing four-quarter earnings surprise of 55.1%, on average.
Tapestry, Inc. TPR provides accessories and lifestyle brand products in North America, Greater China, the rest of Asia and internationally. At present, TPR carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for TPR’s current fiscal-year sales and earnings implies growth of 13.9% and 36.5%, respectively, from the year-ago figures. TPR has delivered a trailing four-quarter earnings surprise of 15.6%, on average.
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Arhaus, Inc. (ARHS): Free Stock Analysis Report
Five Below, Inc. (FIVE): Free Stock Analysis Report
Tapestry, Inc. (TPR): Free Stock Analysis Report
Victoria's Secret & Co. (VSXY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).