Can Arhaus' Showroom Expansion Drive Its Next Phase of Growth?

Arhaus, Inc.’s ARHS showrooms remain a central element of the brand, serving as an important driver of awareness, engagement and conversion. Beyond showcasing products, the showrooms bring the brand experience to life while supporting the company’s interior design and trade channels. Their immersive client experience helps differentiate Arhaus and strengthens the connection between customers and the brand, making showrooms an important part of its overall customer engagement strategy.

The company highlighted that it experienced broad-based demand across its showroom portfolio, with strong written sales growth across every region and showroom format, including traditional and Design Studio locations. The breadth of performance provides confidence that demand is not reliant on a single geography or market. Continued product and brand resonance across regions, combined with significant white space for expansion, supports further growth while the company maintains a disciplined approach to expanding its showroom footprint.

Arhaus continued to strengthen its showroom network in the second quarter, opening a nearly 20,000-square-foot showroom in Ashburn, VA, while relocating its Westlake and Charlotte locations and expanding Park Meadows. The newly relocated Charlotte showroom, at approximately 35,000 square feet, offers an elevated and immersive client destination. Recent openings have performed well, supported by experienced teams and strong service execution. For fiscal 2026, Arhaus expects 10 to 14 showroom projects while maintaining disciplined return criteria and sees significant room for further expansion.

Overall, Arhaus’ showroom strategy could provide a durable avenue for expansion, as its experiential retail model strengthens brand differentiation and customer engagement. With attractive market opportunities remaining, disciplined site selection and investment returns will likely determine the pace of future growth.

The Zacks Rundown for ARHS

Shares of ARHS have surged 67.1% over the past three months compared with the industry’s 8.4% growth. ARHS currently carries a Zacks Rank #3 (Hold).

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From a valuation standpoint, ARHS trades at a forward price-to-earnings ratio of 17.90X, higher than the industry’s average of 15.83X.

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The Zacks Consensus Estimate for ARHS’ current fiscal year earnings implies 12.5% year-over-year growth, while the same for next fiscal year earnings implies a 3.5% year-over-year increase.

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Stocks to Consider

Some better-ranked stocks have been discussed below:

Five Below, Inc. FIVE operates as a specialty value retailer in the United States. At present, Five Below carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
 
The Zacks Consensus Estimate for FIVE’s current fiscal-year sales and earnings implies growth of 15.1% and 36.1%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 70.1%, on average.

Ulta Beauty, Inc. ULTA operates as a specialty beauty retailer in the United States, Mexico, and Kuwait. At present, Ulta Beauty holds a Zacks Rank of 2.

The Zacks Consensus Estimate for ULTA’s current fiscal-year sales and earnings implies growth of 6.6% and 12.3%, respectively, from the year-ago figures. ULTA delivered a trailing four-quarter earnings surprise of nearly 10%, on average.

Sally Beauty Holdings, Inc. SBH operates as a specialty retailer and distributor of professional beauty supplies. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. At present, SBH carries a Zacks Rank of 2.

The Zacks Consensus Estimate for SBH’s current fiscal-year sales and earnings implies growth of 0.8% and 9%, respectively, from the year-ago figures. SBH delivered a trailing four-quarter earnings surprise of 6.4%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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