Arhaus, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Arhaus, Inc. has submitted its 2023 Form 10-K detailing its financial performance and business operations.</b>

AI Summary

Arhaus, Inc. (ARHS) filed a Annual Report (10-K) with the SEC on March 11, 2024. Arhaus, Inc. filed its annual report for the fiscal year ended December 31, 2023. The filing is a Form 10-K, indicating a comprehensive overview of the company's financial performance and condition. The company's principal business is identified as RETAIL-FURNITURE STORES. Arhaus, Inc. is incorporated in Delaware and headquartered in Boston Heights, Ohio. The filing covers the fiscal year from January 1, 2023, to December 31, 2023.

Why It Matters

For investors and stakeholders tracking Arhaus, Inc., this filing contains several important signals. This 10-K filing provides investors and stakeholders with a detailed look at Arhaus's financial health, operational strategies, and risk factors for the fiscal year 2023. As a public company, Arhaus is required to file this report, offering transparency into its business and compliance with SEC regulations.

Risk Assessment

Risk Level: — Arhaus, Inc. shows moderate risk based on this filing. The filing is a standard 10-K, which is a routine disclosure for public companies. However, the specific financial details and risk factors within the report will determine the actual risk level for investors.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to assess Arhaus's performance and potential future challenges.

Key Numbers

• 2023-12-31 — Fiscal Year End (Period of report)
• 2024-03-11 — Filing Date (Date the report was filed)
• 2023-01-01 — Fiscal Year Start (Period of report)

Key Players & Entities

• Arhaus, Inc. (company) — Filer name
• 0001875444 (company) — Central Index Key
• 5712 (company) — Standard Industrial Classification
• DE (company) — State of Incorporation
• OH (company) — State of Business Address
• 440-439-7700 (company) — Business Phone
• 001-41009 (company) — SEC File Number

FAQ

Industry Context

Arhaus, Inc. operates within the furniture stores retail sector, a segment of the broader retail industry.

Regulatory Implications

As a publicly traded company, Arhaus, Inc. is subject to the reporting requirements of the Securities and Exchange Commission (SEC), including the filing of annual reports on Form 10-K.

What Investors Should Do

1. Analyze the revenue and profitability trends presented in the 10-K.
2. Evaluate the company's balance sheet and cash flow statement for financial stability.
3. Scrutinize the risk factors section for potential business challenges and mitigation strategies.

Key Dates

• 2024-03-11: Filing of 10-K — Submission of the annual report for fiscal year 2023.

Year-Over-Year Comparison

This is the initial filing of the 2023 Form 10-K, providing the first detailed look at the company's performance for the most recent fiscal year.

Key Financial Figures

• $0.001 — which registered Class A common stock, $0.001 par value per share ARHS The Nasdaq Glo
• $100 billion — home furnishing market is approximately $100 billion , with the potential to grow at a compo
• $1,287.7 m — r the last three years. Net revenue was $1,287.7 million, $1,228.9 million, and $796.9 mil
• $1,228.9 m — ears. Net revenue was $1,287.7 million, $1,228.9 million, and $796.9 million for the years
• $796.9 million — $1,287.7 million, $1,228.9 million, and $796.9 million for the years ended December 31, 2023,
• $400 billion — ty We operate within the approximately $400 billion U.S. home furnishings and dcor market.

Filing Documents

• arhs-20231231.htm (10-K) — 2170KB
• a1016-consultingagreementw.htm (EX-10.16) — 38KB
• a211-subsidiariesofregistr.htm (EX-21.1) — 6KB
• a231-consentofindependentr.htm (EX-23.1) — 2KB
• a311-certificateofchiefexe.htm (EX-31.1) — 9KB
• a312-certificateofchieffin.htm (EX-31.2) — 9KB
• a321-certificationsofchief.htm (EX-32.1) — 6KB
• a322-certificationsofchief.htm (EX-32.2) — 6KB
• a971-compensationrecoveryp.htm (EX-97.1) — 22KB
• arhs-20231231_g1.jpg (GRAPHIC) — 124KB
• image_6a.jpg (GRAPHIC) — 3KB
• image_7a.jpg (GRAPHIC) — 5KB
• 0001875444-24-000024.txt (&nbsp;) — 11317KB
• arhs-20231231.xsd (EX-101.SCH) — 65KB
• arhs-20231231_cal.xml (EX-101.CAL) — 116KB
• arhs-20231231_def.xml (EX-101.DEF) — 356KB
• arhs-20231231_lab.xml (EX-101.LAB) — 697KB
• arhs-20231231_pre.xml (EX-101.PRE) — 556KB
• arhs-20231231_htm.xml (XML) — 1767KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 12 Item 1B. Unresolved Staff Comments 42 I tem 1C. Cyberse curity 42 Item 2.

Properties

Properties 43 Item 3.

Legal Proceedings

Legal Proceedings 43 Item 4. Mine Safety Disclosures 43 Part II 44 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 44 Item 6. [Reserved] 45 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 46 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 54 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 56 Consolidated Balance Sheets 59 Consolidated Statements of Comprehensive Income 60 Consolidated Statements of Changes i n Stockholders'/Members' Equity (Deficit ) 61 Consolidated Statements of Cash Flows 63

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 65 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures 96 Item 9A.

Controls and Procedures

Controls and Procedures 96 Item 9B. Other Information 98 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 98 Part III 99 Item 10. Directors, Executive Officers and Corporate Governance 99 Item 11.

Executive Compensation

Executive Compensation 102 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 102 Item 13. Certain Relationships and Related Transactions, and Director Independence 102 Item 14. Principal Accountant Fees and Services 102 Part IV 103 Item 15. Exhibits and Financial Statement Schedules 103 Item 16. Form 10-K Summary 107

Signatures

Signatures 108 1 Special Note Regarding Forward-Looking Statements You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included elsewhere in this 10-K. This Annual Report on Form 10-K (the "Annual Report" or "10-K") contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or are proven incorrect, could cause our business and results of operations to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements can generally be identified by the use of forward-looking terminology, including, but not limited to, "may," "could," "seek," "guidance," "predict," "potential," "likely," "believe," "will," "expect," "anticipate," "estimate," "plan," "intend," "forecast," or variations of these terms and similar expressions, or the negative of these terms or similar expressions. Past performance is not a guarantee of future results or returns and no representation or warranty is made regarding future performance. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond our control that could cause our actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the following: Our ability to manage and maintain the growth rate of our business; Our ability to obtain quality merchandise in sufficient quantities; Disruption in our receiving and distribution system, including delays in the integration of our distribution centers and the possibility that we may not realize the anticipated benefits of multiple distribution centers; The possibility of cyberattacks and our ability to maintain adequat

Business

Item 1. Business Overview Founded in 1986 by John Reed, our current Chief Executive Officer ("CEO") and his father, Arhaus, Inc. ("Arhaus," "Company," "we," "us" or "our") is a rapidly growing lifestyle brand and omni-channel retailer of premium home furnishings. We were founded on a simple idea: furniture should be responsibly sourced, lovingly made and built to last. Today, we partner with artisans around the world who share our vision, creating beautiful, premium and heirloom-quality home furnishings that clients can use for generations. On November 4, 2021 , the Company completed its initial public offering ("IPO") of its Class A common stock, which is traded on the Nasdaq Global Select Market (the "Nasdaq") under the symbol " ARHS. " Our vertical model, consisting of our design and product development teams, upholstery manufacturing capabilities, direct vendor sourcing, and direct-to-consumer selling, allows us to offer a differentiated approach to furniture and dcor. We offer merchandise in a number of categories, including furniture, outdoor, lighting, textiles, and dcor. Our curated assortments are presented across our merchandise sales channels in sophisticated, family friendly and unique lifestyle settings. Based on third-party reports and publicly available data, we estimate the U.S. premium home furnishing market is approximately $100 billion , with the potential to grow at a compounded annual growth rate, or CAGR, of approximately 6% between 2022 and 2025. This attractive market is highly fragmented, served by many small independent furniture stores, which favorably positions us to grow profitably and gain market share. We believe we are well positioned within this market due to our unique approach, momentum, scale and growth strategies. Our products are designed to be used and enjoyed throughout the home and are sourced directly from a network of more than 400 vendors with no wholesale or dealer markup. Our product development teams work alongside

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View this 10-K filing on SEC EDGAR