Arhaus Restates Financials Due to Inventory Control Weakness

TL;DR

Arhaus is restating its 2023 financials because of inventory accounting errors; expect amended reports soon.

AI Summary

Arhaus, Inc. announced on February 29, 2024, that it will restate its previously issued financial statements for the fiscal year ended December 31, 2023, and interim periods within that year. This restatement is due to a material weakness in internal control over financial reporting related to the accounting for inventory, specifically the valuation of certain inventory items. The company expects to file amended financial statements once the restatement is complete.

Why It Matters

This restatement indicates potential issues with Arhaus's inventory management and financial reporting accuracy, which could impact investor confidence and future financial performance.

Risk Assessment

Risk Level: medium — A restatement due to a material weakness in internal controls suggests potential inaccuracies in past financial reporting and may require significant effort to correct.

Key Players & Entities

• Arhaus, Inc. (company) — Registrant
• February 29, 2024 (date) — Date of earliest event reported
• December 31, 2023 (date) — Fiscal year end affected by restatement
• 51 E. Hines Hill Road, Boston Heights, Ohio 44236 (address) — Principal Executive Offices

FAQ

From the Filing

0001875444-24-000013.txt : 20240306 0001875444-24-000013.hdr.sgml : 20240306 20240306170729 ACCESSION NUMBER: 0001875444-24-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20240229 ITEM INFORMATION: Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review FILED AS OF DATE: 20240306 DATE AS OF CHANGE: 20240306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Arhaus, Inc. CENTRAL INDEX KEY: 0001875444 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-FURNITURE STORES [5712] ORGANIZATION NAME: 07 Trade & Services IRS NUMBER: 871729256 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-41009 FILM NUMBER: 24726917 BUSINESS ADDRESS: STREET 1: 51 EAST HINES HILL ROAD CITY: BOSTON HEIGHTS STATE: OH ZIP: 44236 BUSINESS PHONE: 440-439-7700 MAIL ADDRESS: STREET 1: 51 EAST HINES HILL ROAD CITY: BOSTON HEIGHTS STATE: OH ZIP: 44236 8-K 1 arhs-20240229.htm 8-K arhs-20240229 0001875444 false 0001875444 2024-03-06 2024-03-06 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ FORM 8-K ___________________________________ CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): February 29, 2024 ___________________________________ Arhaus, Inc. (Exact name of registrant as specified in its charter) ___________________________________ Delaware (State or other jurisdiction of incorporation or organization) 001-41009 (Commission File Number) 87-1729256 (I.R.S. Employer Identification Number) 51 E. Hines Hill Road , Boston Heights , Ohio (Address of Principal Executive Offices) 44236 (Zip Code) ( 440 ) 439-7700 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Class A common stock, $0.001 par value per share ARHS The Nasdaq Global Select Market Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Item 4.02 - Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review On February 29, 2024, the Audit Committee (the "Audit Committee") of the Board of Directors of Arhaus, Inc. (the “Company”), after discussion with management, concluded that the Company's previously issued unaudited condensed consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2023 (the “Q3 Form 10-Q” and such period, the “Affected Period”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 2, 2023, should no longer be relied upon due to the errors described below and should be restated. In preparation of the December 31, 2023 consolidated financial statements, the Company identifie