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Arhaus (NASDAQ:ARHS) fell in afternoon trading on Monday after Jefferies cut its rating on the retailer to Hold from Buy.
Analyst Jonathan Matuszewski and his team lowered estimates on Arhaus (ARHS) due to slowing site traffic growth, falling e-commerce conversion, and a growing percentage of browsing activity tied to sale SKUs. On the data front, web traffic has slowed for Arhaus (ARHS), and the company was highlighted as having lost market share to RH (RH) recently.
Looking ahead, Matuszewski warned that 2025 could mark a third consecutive year without EBITDA expansion, He sees some risk that investors will take chips off the table following a 33% year-to-date gain and turn cautious on housing-related stocks.
“As investors increasingly embrace a view of persistently stubborn housing turnover into 1H’25, we believe stocks with rich margin expansion will outperform, and we now have less conviction that ARHS will check that box.”
Shares of Arhaus (ARHS) were down 7.1% at 1:20 p.m. The stock is now down more than 22% over the last six weeks. Short interest stands at 8.7% of the total float. The Seeking Alpha Quant Rating on Arhaus (ARHS) is flashing Buy.