3 Reasons to Sell ARHS and 1 Stock to Buy Instead

Jabin Bastian Fri, July 3, 2026 at 3:38 PM EDT 3 min read **

• ARHS
• ^GSPC

3 Reasons to Sell ARHS and 1 Stock to Buy Instead Over the last six months, Arhaus's shares have sunk to $8.62, producing a disappointing 19% loss - a stark contrast to the S&P 500's 8.4% gain. This might have investors contemplating their next move.

Is now the time to buy Arhaus, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team's opinion, it's free.

Why Is Arhaus Not Exciting?

Even though the stock has become cheaper, we don't have much confidence in Arhaus. Here are three reasons we avoid ARHS, plus one stock we'd rather own.

1. Shrinking Same-Store Sales Indicate Waning Demand

Same-store sales show the change in sales for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year. This is a key performance indicator because it measures organic growth.

Arhaus's demand has been shrinking over the last two years as its same-store sales have averaged 1.2% annual declines.

Arhaus Same-Store Sales Growth

2. Fewer Distribution Channels Limit Its Ceiling

With $1.38 billion in revenue over the past 12 months, Arhaus is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers.

3. EPS Trending Down

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.

Sadly for Arhaus, its EPS declined by 25.6% annually over the last three years while its revenue grew by 2.4%. This tells us the company became less profitable on a per-share basis as it expanded.

Arhaus Trailing 12-Month EPS (Non-GAAP)

Final Judgment

Arhaus isn't a terrible business, but it isn't one of our picks. After the recent drawdown, the stock trades at 17.6× forward P/E (or $8.62 per share). Investors with a higher risk tolerance might like the company, but we don't really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. We'd recommend looking at one of our all-time favorite software stocks.

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