Arhaus, Inc. ARHS believes its showrooms are an important gateway to the brand, helping attract and engage customers. The store locations play a central role in driving customer conversion and fostering long-term relationships, reinforcing their strategic importance within the company's growth and customer engagement efforts.
The high productivity of new and updated locations further reinforces the opportunity of this expansion. For example, relocating and upgrading an existing gallery in Pittsburgh that had operated for approximately 20 years. The new location is larger and improved in appearance, resulting in significantly stronger sales performance. Similarly, new locations in affluent areas like Ashburn and expanded footprints in destinations like Park Meadows allow for better product presentation and deeper engagement through design services.
Arhaus has already demonstrated a rapid expansion trajectory. Between 2019 and 2025, the company expanded its showroom footprint by more than 50%, with showrooms opened during this period contributing 37% of net revenue growth. These results highlight the effectiveness of the company's disciplined expansion approach and reinforce the importance of physical store growth within its broader business strategy.
Looking ahead, Arhaus plans to complete approximately 10 to 14 showroom projects in fiscal 2026, including four to six new showroom openings and six to eight relocations or expansions. Overall, strong productivity of the company’s existing showroom base and the successful returns generated from relocation and expansion projects validate its growth strategy, and a robust pipeline of projects supports Arhaus’ view that significant white space remains for profitable store growth.
The Zacks Rundown for ARHS
Shares of ARHS have lost 17.3% in the past three months compared with the industry’s decline of 16.8%. ARHS currently carries a Zacks Rank #4 (Sell).
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From a valuation standpoint, ARHS trades at a forward price-to-earnings ratio of 13.29X, lower than the industry’s average of 15.70X.
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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:
Tapestry, Inc. TPR provides accessories and lifestyle brand products in North America, Greater China, the rest of Asia and internationally. At present, TPR 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 TPR’s current fiscal-year sales and earnings implies growth of 13.2% and 36.3%, respectively, from the year-ago figures. TPR has delivered a trailing four-quarter earnings surprise of 15.6%, on average.
Victoria’s Secret & Co. VSCO operates as a specialty retailer of women's intimate apparel and other apparel and beauty products worldwide. At present, VSCO carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Victoria's Secret’s current fiscal-year sales and earnings indicates growth of 6.2% and 16.3%, respectively, from the year-ago figures. VSCO delivered a trailing four-quarter earnings surprise of 55.1%, on average.
Urban Outfitters, Inc. URBN offers lifestyle products and services in the United States and internationally. At present, URBN carries a Zacks Rank of 2.
The Zacks Consensus Estimate for URBN’s current fiscal-year sales and earnings implies growth of 8.5% and 9.7%, respectively, from the year-ago figures. URBN has delivered a trailing four-quarter earnings surprise of 12.2%, on average.
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Urban Outfitters, Inc. (URBN): Free Stock Analysis Report
Tapestry, Inc. (TPR): Free Stock Analysis Report
Victoria's Secret & Co. (VSCO): Free Stock Analysis Report
Arhaus, Inc. (ARHS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).