Forensic Analysis · Retail / Consumer Discretionary · as of Nov 9, 2026
Arhaus, Inc. (ARHS)
A forensic read on Arhaus, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
B · Sound & dependable
Forensic grade
Grey Zone
Financial health
2.2
Distress distance
Clean
Earnings quality
3
Forensic signals
17.7%
ROE
8.5%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Arhaus, Inc. earns a B (Sound & dependable) forensic quality grade, and its balance-sheet distress test reads 2.2, placing it in the Grey zone. 3 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of NOA).
What the filings flag
+12.0%
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets grew +12.0% relative to their own average in FY2025 — scaled by NOA itself, not by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building faster than is comfortable — part of profit is sitting in the balance sheet rather than turning to cash. The build is led by inventory up +14% against +9% in cost of sales and PP&E up +12% against revenue +9%. A cash-flow measure on the same base disagrees: reported earnings ran behind operating cash by 45% of net operating assets, against an accruals ratio of 12.0%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.Accruals ratio: the year-over-year change in net operating assets, relative to their own average.NOA (net operating assets): the money tied up in running the business, operating assets minus operating liabilities.
138d
FY2024→FY2025
Inventory days.Days inventory outstanding moved from 131 to 138 FY2024→FY2025 (against cost of goods sold; inventory +14% vs +9% in cost of sales). Inventory is building a little faster than sales — watch for markdowns.
10.0%
FY2025
Return on invested capital.Return on invested capital is 10.0% in the latest fiscal year and slipping across FY2023–FY2025 from 22.6%. After-tax operating profit was $122M in FY2023 and $65M in FY2025, with operating income at 12.8% of revenue in FY2023, 6.8% in FY2024 and 6.4% in FY2025. The capital base behind it grew +20% across FY2023–FY2025, from $540M to $647M, while the return fell 12.6 points, so the dollars added over that window earned less than the 22.6% the older base was already earning.
Key fundamentals
Latest Revenue$1.38B
Revenue Growth YoY+8.5%
Revenue CAGR (2yr)+3.5%
Net Margin4.9%
Free Cash Flow$59.0M
Return on Equity17.7%
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