ARHS - Arhaus: Doing Better Than Peers But The Stock Is Pricey

2024-02-11 11:38:52 ET

Summary

• Arhaus, an American high-end furniture retailer, has shown resilience and growth compared to its peers in the challenging environment for furniture retailers.
• The company has reported improvements in comparable revenue and demand, indicating stability and potential for higher sales levels.
• Despite its resilience, the stock price is considered too high for long-term safety, but opportunities may arise if the stock revisits a lower price range.

Arhaus ( ARHS ) is an American high-end furniture retailer.

I wrote about the company in September 2022 and January 2023 , both using a Hold rating and not recommending the stock purchase. I believe the company has good operations, is resilient, and has the potential to grow, but I wouldn't say I liked the multiple on earnings at the time.

I believe that retailers require dense safety margins, given that small changes in sales or margins can generate large swings in profitability thanks to operational leverage....

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