ARHS - Arhaus Is Resilient Against Peers But Decelerating And Expensive
2024-05-16 01:32:48 ET
Summary
- Arhaus' 1Q24 results show mixed signals in demand, with some figures improving, while others deteriorate.
- The company is investing in expansion, opening ten new stores and planning for another 12 between FY24 and FY25.
- ARHS's valuation is already high and discounts most of the potential future growth and margin recovery, making it a risky investment.
Arhaus ( ARHS ) is a luxury furniture retailer with 92 stores in the US.
I have covered Arhaus since September 2022 with a Hold rating. Despite the company's positive characteristics, like growth, resilience, and owner-managers, I have not recommended the stock because I believe the market has consistently applied a high multiple to earnings. This is problematic because retailers face cyclical markets. Paying a high multiple for a growing retailer exposes the investor to a cycle downturn risk....
Arhaus Is Resilient Against Peers, But Decelerating And Expensive