Arhaus May Be Under Pressure Near Term After Secondary Offering, Analyst Cautions
Portfolio Pulse from Nabaparna Bhattacharya
Arhaus, Inc. (NASDAQ:ARHS) may face near-term pressure due to a secondary offering of 12 million shares by its private equity sponsor, Freeman & Spogli, reducing their holding from 22% to 13%. This follows a strong 2Q23 report, with demand trends outpacing peers and benefiting from product introductions, marketing, and lower ocean freight costs. The company's outlook for 2H23 suggests potential upside to sales and EBITDA projections. In 2024, Arhaus is expected to benefit from 11 new stores opening in 2023. However, ARHS shares are currently trading lower by 16.4%.
August 16, 2023 | 7:05 pm
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Arhaus, Inc. (ARHS) may face near-term pressure due to a secondary offering. Despite strong 2Q23 report and potential upside in 2H23, shares are trading lower.
The secondary offering by Arhaus's private equity sponsor could put near-term pressure on the stock as it increases the supply of shares in the market. Despite the company's strong performance and potential upside, the market seems to be reacting negatively to this news, as evidenced by the 16.4% drop in share price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100