This morning before U.S. markets opened for trading, fast growing lifestyle brand and omni-channel artisan-crafted furniture retailer Arhaus Inc. (ARHS:NASDAQ), announced financial results for Q4/21 and FY/21 ended December 31, 2021.
The company's Co-Founder and CEO John Reed remarked, "2021 was a monumental year for Arhaus. In addition to our record financial performance, we achieved significant operational accomplishments this past year including the opening of a nearly 500,000 square foot distribution center and upholstery production facility in North Carolina, the start of a 230,000 square foot expansion of our distribution and corporate office facility in Ohio, the launch of a new website to enhance our client experience and analytic capabilities, and our transition to a public company with the November initial public offering of our Class A common stock."
CEO Reed continued, "2022 is off to a strong start and we feel well positioned to deliver on our financial and operational goals in 2022. Supply chain constraints are beginning to ease on both the inbound and outbound side and we believe lead times will continue to improve. While raw material and transportation costs continue to be above historical averages, they are in-line with our expectations, positioning us to deliver on our goals for the year."
Arhaus reported that during Q4/21 net revenue increased by 46.3% to $238 million, compared to $163 million in Q4/20. The company stated the increase was due mostly to increased demand from both its Showroom and eCommerce channels and was also boosted from delivery of backlogged orders which are now catching up as supply chain issues have improved. The firm listed that comparable growth in Q4/21 improved to 40.5%, up from 19.6% in Q4/20.
The firm posted net income of $7 million in Q4/21, versus $3 million in Q4/20, but noted that the increase was attributed primarily to an income tax benefit of $12 million related to the recognition of a deferred tax asset following the company's reorganization in November 2021 when the company's shares commenced trading publicly.
The company stated that in Q4/21 it had adjusted net income of $17.3 million, compared to $21.2 million in Q4/20. During the same period adjusted EBITDA increased by 14.0% to $33 million, versus $29 million in the prior year's corresponding quarter.
Arhaus advised that during Q4/21, it opened a new Showroom in New Jersey and three new Design Studios in Colorado, Florida and New Jersey.
The company stated that for FY/21 net revenue rose 57.1% to $797 million, compared to $507 million in FY/20 and added that net revenue from eCommerce sales were up by 60.1% to $144 million. The firm listed that FY/21 comparable growth improved substantially by 51.0%, versus 0.9% in FY/20.
Arhaus stated that for FY/21 it recorded net and comprehensive income of $37 million, which was 116.7% higher than the $17 million registered in FY/20. The company added that for FY/21 adjusted net income increased by 117.9% to $83 million, versus $38 million in FY/20.
The company advised that it opened five net new showrooms in FY/21 and opened a nearly 500,000 sq. ft. distribution center and upholstery production facility in North Carolina and is commencing with a 230,000 sq. ft. expansion of its Ohio corporate office and distribution facility. The company listed that as of December 31, 2021, it had a total of 79 showrooms in 28 states.
The company provided some forward guidance and advised that for Q1/22 it expects net revenue will be in the range of $232 million to $236 million. The firm stated for Q1/22 its estimates it will register net income of $12-14 million and adjusted EBITDA of $24-26 million.
Arhaus indicated that for FY/22 it expects total net revenue of $1,130-1,170 million with comparable growth of 35% to 45%. The company added that for FY/22 it estimates it will earn net income of $70-80 million and adjusted EBITDA of $145-155 million.
The company advised it is planning to open between 5 to 7 new showrooms during 2022 and also mentioned that in H2/22 it intends to open a third distribution center in Texas covering around 800,000 sq. ft.
Arhaus is an omni-channel premium home furnishings retailer headquartered in Boston Heights, Ohio. The company offers its customers a wide range of lifestyle brands which are directly designed and sourced from leading manufacturers and artisans worldwide. The firm operates over 75 showroom and design center locations in the U.S. across 27 states.
Arhaus started the day with a market cap of around $986.0 million with approximately 136.9 million shares outstanding. ARHS shares opened 20% higher today at $8.68 (+$1.48, +20.56%) over yesterday's $7.20 closing price. The stock has traded today between $8.1764 and $9.18 per share and is currently trading at $8.715 (+$1.515, +21.04%).
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