Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q/A | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-41009 | |
Entity Registrant Name | Arhaus, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-1729256 | |
Entity Address, Address Line One | 51 E. Hines Hill Road | |
Entity Address, City or Town | Boston Heights | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 44236 | |
City Area Code | 440 | |
Local Phone Number | 439-7700 | |
Title of 12(b) Security | Class A common stock, $0.001 par value per share | |
Trading Symbol | ARHS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001875444 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | true | |
Current Fiscal Year End Date | --12-31 | |
Amendment Description | EXPLANATORY NOTEArhaus, Inc. (the “Company”) is filing this Amendment No. 1 (the “Form 10-Q/A”) to its Quarterly Report on Form 10-Q for the period ended September 30, 2023 (the “Q3 Form 10-Q” and such period, the “Affected Period”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 2, 2023 as further described below:As disclosed in the Company’s Current Report of Form 8-K filed on March 6, 2024, the Company is amending and restating its previously issued unaudited condensed consolidated financial statements for the Affected Period. In preparation of the December 31, 2023 consolidated financial statements, the Company identified an error within the unaudited condensed consolidated balance sheet as of September 30, 2023, related to certain leasehold and landlord improvements prior to showroom completion being incorrectly included in prepaid and other current assets rather than property, furniture and equipment, net. The error resulted in inaccurate cash flows ascribed to operating and investing activities in the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2023. The unaudited condensed consolidated financial statements are being amended and restated to correct the error in this Form 10-Q/A. In connection with the restatement of the Company’s unaudited condensed consolidated financial statements for the Affected Period, the Company determined it is appropriate to correct for certain other previously identified immaterial errors.The Company has also revised the unaudited condensed consolidated balance sheet as of December 31, 2022 and the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2022 to correct for the error described above as well as for certain other previously identified errors, which were considered immaterial both individually and in the aggregate to such unaudited condensed consolidated financial statements.For more detailed financial information related to the restatement and revision, refer to Note 1 in the Notes to Condensed Consolidated Financial Statements (Unaudited) – Nature of Business and Basis of Presentation. The following sections have been amended to reflect this restatement:•Part I – Item 1. Financial Statements of Arhaus Inc, and Subsidiaries•Part I – Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations•Part II – Item 4. Controls and Procedures•Part II – Item 6. ExhibitsThe Company’s management has previously concluded and disclosed that the Company's disclosure controls and procedures were not effective due to the existence of material weaknesses in the Company’s internal control over financial reporting ("ICFR"). The Company has evaluated the impact of the errors described above on its ICFR and concluded the existing material weaknesses resulted in these errors.Further, in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the Company is including currently dated certifications from its chief executive officer and chief financial officer with this Form 10-Q/A. These certifications are filed or furnished, as applicable, as Exhibits 31.1, 31.2, 32.1 and 32.2.This Form 10-Q/A sets forth the original Q3 Form 10-Q in its entirety, as amended to reflect the restatement and revisions. Except as specifically noted above, this Form 10-Q/A does not modify, amend or update disclosures in the original Q3 Form 10-Q and this Form 10-Q/A does not reflect events occurring after the filing of the original Q3 Form 10-Q or modify or update any other disclosures. This Form 10-Q/A should be read in conjunction with the Company’s filings with the SEC subsequent to the date on which the original Q3 Form 10-Q was filed. | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 53,167,306 | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 87,115,600 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 236,930 | $ 145,181 |
Restricted cash equivalents | 3,465 | 7,346 |
Accounts receivable, net | 1,962 | 1,734 |
Merchandise inventory, net | 268,960 | 286,419 |
Prepaid and other current assets | 36,699 | 29,868 |
Total current assets | 548,016 | 470,548 |
Operating right-of-use assets | 309,572 | 257,347 |
Financing right-of-use assets | 39,480 | 38,522 |
Property, furniture and equipment, net | 183,073 | 140,613 |
Deferred tax asset | 16,585 | 16,841 |
Goodwill | 10,961 | 10,961 |
Other noncurrent assets | 3,081 | 2,252 |
Total assets | 1,110,768 | 937,084 |
Current liabilities | ||
Accounts payable | 58,138 | 62,636 |
Accrued taxes | 13,134 | 12,256 |
Accrued wages | 12,015 | 20,860 |
Accrued other expenses | 47,073 | 35,169 |
Client deposits | 212,406 | 202,587 |
Current portion of operating lease liabilities | 42,566 | 39,250 |
Current portion of financing lease liabilities | 925 | 531 |
Total current liabilities | 386,257 | 373,289 |
Operating lease liabilities, long-term | 355,808 | 295,657 |
Financing lease liabilities, long-term | 54,010 | 51,835 |
Deferred rent and lease incentives | 2,032 | 2,272 |
Other long-term liabilities | 4,173 | 4,336 |
Total liabilities | 802,280 | 727,389 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Retained earnings | 114,076 | 20,053 |
Additional paid-in capital | 194,273 | 189,504 |
Total Arhaus, Inc. stockholders' equity | 308,488 | 209,695 |
Total liabilities and stockholders' equity | 1,110,768 | 937,084 |
Class A | ||
Stockholders' equity | ||
Stock issued | 52 | 51 |
Class B | ||
Stockholders' equity | ||
Stock issued | $ 87 | $ 87 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Class A | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock , shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, shares issued (in shares) | 52,749,450 | 51,437,348 |
Common stock, shares outstanding (in shares) | 52,666,334 | 51,437,348 |
Class B | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock , shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 87,115,600 | 87,115,600 |
Common stock, shares outstanding (in shares) | 87,115,600 | 87,115,600 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net revenue | $ 326,229 | $ 320,030 | $ 943,696 | $ 872,595 |
Cost of goods sold | 195,372 | 183,739 | 544,481 | 505,561 |
Gross margin | 130,857 | 136,291 | 399,215 | 367,034 |
Selling, general and administrative expenses | 106,977 | 89,145 | 275,890 | 246,767 |
Income from operations | 23,880 | 47,146 | 123,325 | 120,267 |
Interest expense (income), net | (1,080) | 751 | (1,731) | 3,367 |
Other income | (78) | (109) | (738) | (584) |
Income before taxes | 25,038 | 46,504 | 125,794 | 117,484 |
Income tax expense | 5,297 | 9,568 | 31,771 | 27,851 |
Net and comprehensive income | $ 19,741 | $ 36,936 | $ 94,023 | $ 89,633 |
Net and comprehensive income per share, basic | ||||
Weighted-average number of common shares outstanding, basic (in shares) | 139,628,776 | 138,484,495 | 139,365,870 | 137,939,577 |
Net and comprehensive income per share, basic (in dollars per share) | $ 0.14 | $ 0.27 | $ 0.67 | $ 0.65 |
Net and comprehensive income per share, diluted | ||||
Weighted-average number of common shares outstanding, diluted (in shares) | 140,140,899 | 139,845,333 | 140,021,670 | 139,545,802 |
Net and comprehensive income per share, diluted (in dollars per share) | $ 0.14 | $ 0.26 | $ 0.67 | $ 0.64 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Class A | Class B | Common Stock Class A | Common Stock Class B | Treasury Stock Class A | Retained Earnings (Accumulated Deficit) | Additional Paid-in Capital |
Beginning Balance (in shares) at Dec. 31, 2021 | 50,428,000 | 86,519,000 | ||||||
Beginning Balance at Dec. 31, 2021 | $ 69,765 | $ 50 | $ 87 | $ 0 | $ (116,581) | $ 186,209 | ||
Beginning Balance (in shares) at Dec. 31, 2021 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 89,633 | 89,633 | ||||||
Shareholder capital contribution | 62 | 62 | ||||||
Equity based compensation (in shares) | 1,009,000 | 597,000 | ||||||
Equity based compensation | 2,613 | $ 1 | 2,612 | |||||
Adjustment to deferred tax asset impact of Reorganization from partnership to a corporation | (1,278) | (1,278) | ||||||
Ending Balance (in shares) at Sep. 30, 2022 | 51,437,000 | 87,116,000 | ||||||
Ending Balance at Sep. 30, 2022 | 160,795 | $ 51 | $ 87 | $ 0 | (26,948) | 187,605 | ||
Ending Balance (in shares) at Sep. 30, 2022 | 0 | |||||||
Beginning Balance (in shares) at Jun. 30, 2022 | 51,360,000 | 87,116,000 | ||||||
Beginning Balance at Jun. 30, 2022 | 123,894 | $ 51 | $ 87 | $ 0 | (63,884) | 187,640 | ||
Beginning Balance (in shares) at Jun. 30, 2022 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 36,936 | 36,936 | ||||||
Shareholder capital contribution | 19 | 19 | ||||||
Equity based compensation (in shares) | 77,000 | |||||||
Equity based compensation | 1,224 | 1,224 | ||||||
Adjustment to deferred tax asset impact of Reorganization from partnership to a corporation | (1,278) | (1,278) | ||||||
Ending Balance (in shares) at Sep. 30, 2022 | 51,437,000 | 87,116,000 | ||||||
Ending Balance at Sep. 30, 2022 | 160,795 | $ 51 | $ 87 | $ 0 | (26,948) | 187,605 | ||
Ending Balance (in shares) at Sep. 30, 2022 | 0 | |||||||
Beginning Balance (in shares) at Dec. 31, 2022 | 51,437,348 | 87,115,600 | 51,437,000 | 87,116,000 | ||||
Beginning Balance at Dec. 31, 2022 | 209,695 | $ 51 | $ 87 | $ 0 | 20,053 | 189,504 | ||
Beginning Balance (in shares) at Dec. 31, 2022 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 94,023 | 94,023 | ||||||
Shareholder capital contribution | 42 | 42 | ||||||
Equity based compensation (in shares) | 1,312,000 | |||||||
Equity based compensation | 5,752 | $ 1 | 5,751 | |||||
Shares withheld to cover employees' withholding taxes for equity based compensation (in shares) | (83,000) | (83,000) | ||||||
Shares withheld to cover employees' withholding taxes for equity based compensation | (1,024) | (1,024) | ||||||
Ending Balance (in shares) at Sep. 30, 2023 | 52,666,334 | 87,115,600 | 52,666,000 | 87,116,000 | ||||
Ending Balance at Sep. 30, 2023 | 308,488 | $ 52 | $ 87 | $ 0 | 114,076 | 194,273 | ||
Ending Balance (in shares) at Sep. 30, 2023 | 83,000 | |||||||
Beginning Balance (in shares) at Jun. 30, 2023 | 52,345,000 | 87,116,000 | ||||||
Beginning Balance at Jun. 30, 2023 | 287,564 | $ 52 | $ 87 | $ 0 | 94,335 | 193,090 | ||
Beginning Balance (in shares) at Jun. 30, 2023 | 25,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 19,741 | 19,741 | ||||||
Shareholder capital contribution | 12 | 12 | ||||||
Equity based compensation (in shares) | 379,000 | |||||||
Equity based compensation | 1,848 | 1,848 | ||||||
Shares withheld to cover employees' withholding taxes for equity based compensation (in shares) | (58,000) | (58,000) | ||||||
Shares withheld to cover employees' withholding taxes for equity based compensation | (677) | (677) | ||||||
Ending Balance (in shares) at Sep. 30, 2023 | 52,666,334 | 87,115,600 | 52,666,000 | 87,116,000 | ||||
Ending Balance at Sep. 30, 2023 | $ 308,488 | $ 52 | $ 87 | $ 0 | $ 114,076 | $ 194,273 | ||
Ending Balance (in shares) at Sep. 30, 2023 | 83,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net income | $ 94,023 | $ 89,633 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 21,439 | 18,319 |
Amortization of operating lease right-of-use asset | 24,733 | 21,976 |
Amortization of deferred financing fees, interest on finance lease in excess of principal paid and interest on operating leases | 16,037 | 8,731 |
Equity based compensation | 5,752 | 2,613 |
Deferred tax assets | 256 | 5,458 |
Amortization of cloud computing arrangements | 386 | 0 |
Amortization and write-off of lease incentives | (241) | (224) |
Insurance proceeds | 60 | 0 |
Changes in operating assets and liabilities | ||
Accounts receivable | (228) | (1,550) |
Merchandise inventory | 17,399 | (84,228) |
Prepaid and other assets | (8,448) | (6,217) |
Other noncurrent liabilities | 273 | 456 |
Accounts payable | (10,141) | 8,524 |
Accrued expenses | 3,502 | 23,682 |
Operating lease liabilities | (28,797) | (22,586) |
Client deposits | 9,819 | (3,128) |
Net cash provided by operating activities | 145,824 | 61,459 |
Cash flows from investing activities | ||
Purchases of property, furniture and equipment | (56,762) | (40,172) |
Insurance proceeds | 333 | 0 |
Net cash used in investing activities | (56,429) | (40,172) |
Cash flows from financing activities | ||
Principal payments under finance leases | (503) | (113) |
Repurchase of shares for payment of withholding taxes for equity based compensation | (1,024) | 0 |
Net cash used in financing activities | (1,527) | (113) |
Net increase (decrease) in cash, cash equivalents and restricted cash equivalents | 87,868 | 21,174 |
Cash, cash equivalents and restricted cash equivalents | ||
Beginning of period | 152,527 | 130,908 |
End of period | 240,395 | 152,082 |
Supplemental disclosure of cash flow information | ||
Interest paid in cash | 3,962 | 3,858 |
Interest received in cash | 5,395 | 316 |
Income taxes paid in cash | 28,856 | 20,579 |
Lease incentives | 0 | 0 |
Noncash investing activities: | ||
Purchase of property, furniture and equipment in accounts payable | 8,804 | 4,471 |
Noncash financing activities: | ||
Adjustment to deferred tax asset impact of Reorganization from partnership to a corporation | 0 | (1,278) |
Derecognition of build-to-suit assets as a result of ASC 842 adoption | 0 | (31,017) |
Capital contributions | $ 42 | $ 62 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation Nature of Business Arhaus, Inc. (the “Company,” “we” or “Arhaus”) is a Delaware corporation and is a premium retailer in the home furnishings market, specializing in livable luxury supported by heirloom quality merchandise. We offer merchandise in a number of categories, including furniture, outdoor, lighting, textiles and décor. Our curated assortments are presented across our sales channels in sophisticated, family friendly and unique lifestyle settings. We position our retail locations as Showrooms for our brand, while our website acts as a virtual extension of our Showrooms. The Company operated 86 Showrooms at September 30, 2023. Basis of Presentation The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying condensed consolidated financial statements include our accounts and those of our wholly owned subsidiaries. Accordingly, all intercompany balances and transactions have been eliminated through the consolidation process. The accompanying condensed consolidated balance sheets at September 30, 2023 and December 31, 2022, the condensed consolidated statements of comprehensive income and changes in stockholders’equity for the nine and three months ended September 30, 2023 and 2022, the condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022 and the related interim condensed consolidated disclosures are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In management’s opinion, the accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position at September 30, 2023, the results of operations and changes in stockholders’equity for the nine and three months ended September 30, 2023 and 2022 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022. The condensed consolidated balance sheet as of December 31, 2022 included herein was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The results for the nine and three months ended September 30, 2023 and 2022 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. Restatement and Revision of Previously Issued Condensed Consolidated Financial Statements The Company identified an error within the unaudited condensed consolidated balance sheet as of September 30, 2023, related to certain leasehold and landlord improvements prior to showroom completion being incorrectly included in prepaid and other current assets rather than property, furniture and equipment, net. The error resulted in inaccurate cash flows ascribed to operating and investing activities in the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2023. The unaudited condensed consolidated balance sheet as of September 30, 2023 and the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2023 have been restated to correct for this error. In connection with the restatement of the Company’s unaudited condensed consolidated financial statements for the nine months ended September 30, 2023, we determined it is appropriate to correct for certain other previously identified immaterial errors. The Company has also revised the unaudited condensed consolidated balance sheet as of December 31, 2022 and the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2022 to correct for the error described above as well as for certain other previously identified errors, which were considered immaterial both individually and in the aggregate to such unaudited condensed consolidated financial statements. We have also restated and revised impacted amounts within the accompanying notes to the unaudited condensed consolidated financial statements, as applicable. The following tables summarize the impact of these corrections for the periods presented (amounts in thousands): September 30, 2023 Condensed Consolidated Balance Sheet As Reported Adjustment As Restated Prepaid and other current assets $ 63,140 $ (26,441) $ 36,699 Total current assets $ 574,457 $ (26,441) $ 548,016 Operating right-of-use assets (1) $ 314,378 $ (4,806) $ 309,572 Property, furniture and equipment, net 156,632 26,441 183,073 Total assets $ 1,115,574 $ (4,806) $ 1,110,768 Current portion of operating lease liabilities (1) $ 42,472 $ 94 $ 42,566 Total current liabilities $ 386,163 $ 94 $ 386,257 Operating lease liabilities, long-term (1) $ 360,708 $ (4,900) $ 355,808 Total liabilities $ 807,086 $ (4,806) $ 802,280 Total liabilities and stockholders' equity $ 1,115,574 $ (4,806) $ 1,110,768 (1) These identified adjustments are to correct other immaterial errors. Nine months ended September 30, 2023 Condensed Consolidated Statement of Cash Flows As Reported Adjustment As Restated Cash flows from operating activities Changes in prepaid and other assets $ (28,952) $ 20,504 $ (8,448) Changes in accounts payable (4,093) (6,048) (10,141) Net cash provided by operating activities $ 131,368 $ 14,456 $ 145,824 Cash flows from investing activities Purchases of property, furniture and equipment $ (42,306) $ (14,456) $ (56,762) Net cash used in investing activities $ (41,973) $ (14,456) $ (56,429) Supplemental disclosure of cash flow information Noncash operating activities: Lease incentives $ 7,313 $ (7,313) $ — Noncash investing activities: Purchase of property, furniture and equipment in accounts payable $ 2,756 $ 6,048 $ 8,804 December 31, 2022 Condensed Consolidated Balance Sheet As Reported Adjustment As Revised Prepaid and other current assets $ 37,371 $ (7,503) $ 29,868 Total current assets $ 478,051 $ (7,503) $ 470,548 Operating right-of-use assets $ 252,055 $ 5,292 $ 257,347 Property, furniture and equipment, net 135,066 5,547 140,613 Other noncurrent assets 296 1,956 2,252 Total assets $ 931,792 $ 5,292 $ 937,084 Current portion of operating lease liabilities $ 39,744 $ (494) $ 39,250 Total current liabilities $ 373,783 $ (494) $ 373,289 Operating lease liabilities, long-term $ 289,871 $ 5,786 $ 295,657 Total liabilities $ 722,097 $ 5,292 $ 727,389 Total liabilities and stockholders' equity $ 931,792 $ 5,292 $ 937,084 Nine months ended September 30, 2022 Condensed Consolidated Statement of Cash Flows As Reported Adjustment As Revised Cash flows from operating activities Changes in prepaid and other assets $ (11,249) $ 5,032 $ (6,217) Changes in accounts payable 10,334 (1,810) 8,524 Net cash provided by operating activities $ 58,237 $ 3,222 $ 61,459 Cash flows from investing activities Purchases of property, furniture and equipment $ (36,950) $ (3,222) $ (40,172) Net cash used in investing activities $ (36,950) $ (3,222) $ (40,172) Supplemental disclosure of cash flow information Noncash operating activities: Lease incentives $ 7,532 $ (7,532) $ — Noncash investing activities: Purchase of property, furniture and equipment in accounts payable $ 2,661 $ 1,810 $ 4,471 Use of Estimates The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accounting estimates and other matters included within our condensed consolidated financial statements and notes to the condensed consolidated financial statements we have assessed include, but were not limited to, revenue recognition, including a reserve for merchandise returns, inventory reserves, goodwill and fair value of financial instruments which include, but are not limited to, accounts receivable, payables and lease obligations. Client Deposits Client deposits represent payments made by clients on orders. At the time of purchase, the Company collects deposits for all orders equivalent to at least 50 percent of the clients’ purchase price. Orders are recognized as revenue when the merchandise is delivered to the client and at the time of delivery the client deposit is no longer recorded as a liability. The Company expects substantially all client deposits as of September 30, 2023 will be recognized as net revenue within the next 12 months as the performance obligations are satisfied. Gift Cards The Company sells gift cards to clients in our Showrooms and through our website. Such gift cards do not have expiration dates. We defer revenue when payments are received in advance of performance for unsatisfied obligations related to our gift cards. The liability related to unredeemed gift cards at September 30, 2023 and December 31, 2022 of $0.4 million and $1.0 million, respectively, is recorded in the accrued other expenses line item of the condensed consolidated balance sheets. The Company recognizes income associated with breakage proportional to actual gift card redemptions. For the nine and three months ended September 30, 2023 , breakage income was $0.8 million and $0.1 million, respectively . For the nine and three months ended September 30, 2022, breakage was minimal. Fair Values of Financial Instruments The Company’s primary financial ins truments are cash and cash equivalent investments, accounts receivable, payables, lease obligations and equity based compensation instruments. Due to the shor t-term maturities of cash and cash equivalent investments, accounts receivable and payables, the Company believes the fair values of these instruments approximate their respective carrying values at September 30, 2023 and December 31, 2022. See Note 5 — Leases for discussion of our lease obligations and Note 6 — Equity Based Compensation for discussion of our equity based compensation instruments. The Company has established a hierarchy to measure our financial instruments at fair value, which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect the Company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. The hierarchy defines three levels of inputs that may be used to measure fair value: Level 1 Unadjusted quoted prices in active markets for identical, unrestricted assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 Unobservable inputs that reflect the entity’s own assumptions about the assumptions market participants would use in the pricing of the asset or liability and are consequently not based on market activity but rather through particular valuation techniques. From time to time, the Company invests in money market funds and other Level 1 cash and cash equivalent investments. For the nine and three months ended September 30, 2023, the Company earned $5.8 million and $2.5 million , respectively, in interest income. For the nine and three months ended September 30, 2022, interest income was $0.6 million and $0.6 million, respectively . Interest income is included within interest expense (income), net on our condensed consolidated statements of comprehensive income. Prepaid and Other Current Assets Prepaid and other current assets consist of the following (amounts in thousands): September 30, 2023 December 31, 2022 As Restated Tenant allowance receivable $ 7,373 $ 4,312 Prepaid expenses 8,802 11,228 Right of return asset 2,576 2,938 Prepaid advertising 3,760 816 Prepaid cloud computing arrangements, net (1) 2,845 1,054 Other current assets 11,343 9,520 Total prepaid and other current assets $ 36,699 $ 29,868 (1) Presented net of accumulated amortization of $1.2 million as of September 30, 2023. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards New Accounting Standards Adopted in Fiscal 2023 We did not adopt any Accounting Standards Updates (“ASU”) in the nine months ended September 30, 2023 that had a material impact on our accounting policies or our condensed consolidated financial statements. Accounting Standards Not Yet Adopted The following table summarizes accounting pronouncements which we have not yet adopted but will be adopted in the upcoming fiscal year. ASU 2023-01 is effective for annual periods beginning after December 15, 2023. We believe the adoption will not have a material impact on our accounting policies or our consolidated financial statements and related disclosures. ASU Description Adoption Date ASU 2023-01 Leases (Topic 842): Common Control Arrangements January 1, 2024 |
Merchandise Warranties
Merchandise Warranties | 9 Months Ended |
Sep. 30, 2023 | |
Product Warranties Disclosures [Abstract] | |
Merchandise Warranties | Merchandise Warranties The Co mpany warrants certain merchandise to be free of defects in both construction materials and workmanship from the date the performance obligation was fulfilled to the client for three A reconciliation of the changes in our limited merchandise warranty liability is as follows (amounts in thousands): Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Balance as of beginning of period $ 6,375 $ 4,724 $ 6,578 $ 5,412 Accruals during the period 10,292 8,285 3,543 3,181 Settlements during the period (9,854) (7,152) (3,308) (2,736) Balance as of end of the period (1) $ 6,813 $ 5,857 $ 6,813 $ 5,857 (1) $3.9 million and $3.7 million were recorded in accrued other expenses at September 30, 2023 and December 31, 2022, respectively. The remainder is recorded in other long-term liabilities on our condensed consolidated balance sheets. We recorded accruals during the periods presented in the table above, primarily to reflect charges that relate to limited merchandise warranties issued during the respective periods. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt On November 8, 2021, the Company entered into a revolving credit facility (the “2021 Credit Facility”). The 2021 Credit Facility provides for, among other things, (1) a revolving credit facility in an aggregate amount not to exceed at any time outstanding the amount of such lender’s commitment, (2) a letter of credit commitment in an amount equal to the lesser of (a) $10.0 million, and (b) the amount of the revolving credit facility as of such date, and (3) a swingline loan in an amount equal to the lesser of (a) $5.0 million, and (b) the amount of the revolving credit facility as of such date. The aggregate amount of all commitments of all lenders under the 2021 Credit Facility was initially $50.0 million. The 2021 Credit Facility contains restrictive covenants and has certain financial covenants, including a minimum rent-adjusted total leverage ratio and a minimum fixed charge ratio. The 2021 Credit Facility bears variable interest rates at the prevailing Bloomberg Short-Term Bank Yield index rate plus the applicable margin (1.50% at September 30, 2023 and 2022), whereas the applicable margin is adjusted quarterly based on the Company’s consolidated rent-adjusted total leverage ratio. On December 9, 2022, the Company amended the 2021 Credit Facility to increase the revolving credit commitment thereunder by $25.0 million. After giving effect to such increase, the aggregate amount of all commitments under the 2021 Credit Facility is $75.0 million. The 2021 Credit Facility expires on November 8, 2026. At September 30, 2023 and December 31, 2022 , we had no borrowings on the 2021 Credit Facility. Deferred financing costs related to the 2021 Credit Facility of $0.4 million are recorded in other noncurrent assets on the consolidated balance sheets and will be amortized over the term of the 2021 Credit Facility on a straight-line basis. Accumulated amortization related to deferred financing costs for the 2021 Credit Facility was $0.1 million as of September 30, 2023 and December 31, 2022 . The Company was in compliance with all applicable debt covenants at September 30, 2023 and December 31, 2022, and expects to remain in compliance over the next 12 months. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company leases real estate and equipment under operating and finance leases, some of which are from related parties as discussed in Note 10 — Related Party Transactions . The most significant obligati ons under these lease agreements require the payments of periodic rentals, real estate taxes, insurance and maintenance costs. Depending on particular Showroom leases, the Company can also owe a percentage rent payment if particular Showrooms meet certain sales figures. The following table summarizes the amounts recognized in our condensed consolidated balance sheets related to leases as of September 30, 2023 and December 31, 2022, respectively (amounts in thousands): Condensed Consolidated Balance Sheet Classification September 30, 2023 December 31, 2022 As Restated Assets Operating lease assets Operating right-of-use assets $ 309,572 $ 257,347 Finance lease assets Financing right-of-use assets 39,480 38,522 Total leased assets $ 349,052 $ 295,869 Liabilities Current operating leases Current portion of operating lease liabilities $ 42,566 $ 39,250 Non-current operating leases Operating lease liabilities, long-term 355,808 295,657 Total operating lease liabilities 398,374 334,907 Current finance leases Current portion of financing lease liabilities 925 531 Non-current finance leases Financing lease liabilities, long-term 54,010 51,835 Total finance lease liabilities 54,935 52,366 Total lease liabilities $ 453,309 $ 387,273 The components of lease cost recognized within our condensed consolidated statements of comprehensive income for the nine and three months ended September 30, 2023 and 2022, respectively are as follows (amounts in thousands): Nine months ended September 30, Three months ended September 30, Condensed Consolidated Income Statement Classification 2023 2022 2023 2022 Lease costs: Operating lease costs Cost of goods sold $ 31,894 $ 25,798 $ 11,518 $ 8,716 Operating lease costs Selling, general and administrative expenses 7,375 4,743 2,518 1,955 Finance lease costs Amortization of right-of-use assets Selling, general and administrative expenses 1,838 1,516 758 540 Interest expense on lease liabilities Interest expense (income), net 3,852 3,758 1,316 1,270 Variable lease costs (1) Cost of goods sold 28,474 26,764 9,327 9,961 Short term lease costs Selling, general and administrative expenses 165 507 29 170 Total lease costs $ 73,598 $ 63,086 $ 25,466 $ 22,612 (1) Includes $0.4 million of month-to-month lease costs for the nine months ended September 30, 2023 . The Company did not have month-to-month lease costs for the nine and three months ended September 30, 2022 or the three months ended September 30, 2023 . We often have options to renew lease terms for Showrooms and other as sets. The exercise of lease renewal options is generally at our sole discretion. In addition, certain lease agreements may be terminated prior to their original expiration date at our discretion. We evaluate each renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors. The table below summarizes the weighted average remaining lease terms as of September 30, 2023 and 2022, respectively. Weighted Average Remaining Lease Term (In Years) September 30, 2023 September 30, 2022 As Restated Operating leases 9.27 8.72 Finance leases 21.02 22.66 The discount rate implicit within our finance leases was determined at the time of lease commencement. However, the discount rate implicit within our operating leases is generally not determinable at the time of lease commencement and therefore the Company determines the discount rate based on its incremental borrowing rate. For all operating leases in which the discount rate is not explicit, the Company utilized a market-based approach to estimate the incremental borrowing rate (“IBR”), which required significant judgment. The Company estimated the base IBR based on an analysis of (i) yields on the Company’s 2021 Credit Facility, as well as comparable companies and (ii) unsecured yields and discount rates. The Company applied adjustments to the base IBRs to account for full collateralization and lease term. The table below summarizes the weighted average discount rate used to measure our lease liabilities as of September 30, 2023 and 2022, respectively. Weighted Average Discount Rate September 30, 2023 September 30, 2022 As Restated Operating leases 5.94 % 4.56 % Finance leases 9.63 % 9.72 % Future lease liabilities at September 30, 2023 are as follows (amounts in thousands): Year Ending December 31, Operating Lease Liabilities (1) Finance Lease Liabilities Total Lease Liabilities As Restated As Restated Remainder of 2023 $ 15,087 $ 1,533 $ 16,620 2024 65,085 5,789 70,874 2025 61,146 5,789 66,935 2026 56,918 6,249 63,167 2027 53,111 6,060 59,171 2028 47,930 5,610 53,540 Thereafter 229,657 109,943 339,600 Total lease payments 528,934 140,973 669,907 Less: Amounts representing interest (130,560) (86,038) (216,598) Total $ 398,374 $ 54,935 $ 453,309 (1) Includes leases with related parties. See Note 10 — Related Party Transactions for amounts leased from related parties. At September 30, 2023, the Company has entered into leases for Showrooms and equipment which have not yet commenced with expected leas e terms ranging from 3 to 17 years. The aggregate minimum rental payments over the term of the leases of approximately $159.5 million are not included i n the above table. Supplemental cash flow information related to leases for the nine months ended September 30, 2023 and 2022, respectively is as follows (amounts in thousands): Nine months ended September 30, 2023 2022 As Restated Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 41,759 $ 35,587 Operating cash flows for finance leases 3,642 3,758 Financing cash flows for finance leases 503 113 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 76,375 $ 50,565 Finance leases 2,813 2,018 |
Leases | Leases The Company leases real estate and equipment under operating and finance leases, some of which are from related parties as discussed in Note 10 — Related Party Transactions . The most significant obligati ons under these lease agreements require the payments of periodic rentals, real estate taxes, insurance and maintenance costs. Depending on particular Showroom leases, the Company can also owe a percentage rent payment if particular Showrooms meet certain sales figures. The following table summarizes the amounts recognized in our condensed consolidated balance sheets related to leases as of September 30, 2023 and December 31, 2022, respectively (amounts in thousands): Condensed Consolidated Balance Sheet Classification September 30, 2023 December 31, 2022 As Restated Assets Operating lease assets Operating right-of-use assets $ 309,572 $ 257,347 Finance lease assets Financing right-of-use assets 39,480 38,522 Total leased assets $ 349,052 $ 295,869 Liabilities Current operating leases Current portion of operating lease liabilities $ 42,566 $ 39,250 Non-current operating leases Operating lease liabilities, long-term 355,808 295,657 Total operating lease liabilities 398,374 334,907 Current finance leases Current portion of financing lease liabilities 925 531 Non-current finance leases Financing lease liabilities, long-term 54,010 51,835 Total finance lease liabilities 54,935 52,366 Total lease liabilities $ 453,309 $ 387,273 The components of lease cost recognized within our condensed consolidated statements of comprehensive income for the nine and three months ended September 30, 2023 and 2022, respectively are as follows (amounts in thousands): Nine months ended September 30, Three months ended September 30, Condensed Consolidated Income Statement Classification 2023 2022 2023 2022 Lease costs: Operating lease costs Cost of goods sold $ 31,894 $ 25,798 $ 11,518 $ 8,716 Operating lease costs Selling, general and administrative expenses 7,375 4,743 2,518 1,955 Finance lease costs Amortization of right-of-use assets Selling, general and administrative expenses 1,838 1,516 758 540 Interest expense on lease liabilities Interest expense (income), net 3,852 3,758 1,316 1,270 Variable lease costs (1) Cost of goods sold 28,474 26,764 9,327 9,961 Short term lease costs Selling, general and administrative expenses 165 507 29 170 Total lease costs $ 73,598 $ 63,086 $ 25,466 $ 22,612 (1) Includes $0.4 million of month-to-month lease costs for the nine months ended September 30, 2023 . The Company did not have month-to-month lease costs for the nine and three months ended September 30, 2022 or the three months ended September 30, 2023 . We often have options to renew lease terms for Showrooms and other as sets. The exercise of lease renewal options is generally at our sole discretion. In addition, certain lease agreements may be terminated prior to their original expiration date at our discretion. We evaluate each renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors. The table below summarizes the weighted average remaining lease terms as of September 30, 2023 and 2022, respectively. Weighted Average Remaining Lease Term (In Years) September 30, 2023 September 30, 2022 As Restated Operating leases 9.27 8.72 Finance leases 21.02 22.66 The discount rate implicit within our finance leases was determined at the time of lease commencement. However, the discount rate implicit within our operating leases is generally not determinable at the time of lease commencement and therefore the Company determines the discount rate based on its incremental borrowing rate. For all operating leases in which the discount rate is not explicit, the Company utilized a market-based approach to estimate the incremental borrowing rate (“IBR”), which required significant judgment. The Company estimated the base IBR based on an analysis of (i) yields on the Company’s 2021 Credit Facility, as well as comparable companies and (ii) unsecured yields and discount rates. The Company applied adjustments to the base IBRs to account for full collateralization and lease term. The table below summarizes the weighted average discount rate used to measure our lease liabilities as of September 30, 2023 and 2022, respectively. Weighted Average Discount Rate September 30, 2023 September 30, 2022 As Restated Operating leases 5.94 % 4.56 % Finance leases 9.63 % 9.72 % Future lease liabilities at September 30, 2023 are as follows (amounts in thousands): Year Ending December 31, Operating Lease Liabilities (1) Finance Lease Liabilities Total Lease Liabilities As Restated As Restated Remainder of 2023 $ 15,087 $ 1,533 $ 16,620 2024 65,085 5,789 70,874 2025 61,146 5,789 66,935 2026 56,918 6,249 63,167 2027 53,111 6,060 59,171 2028 47,930 5,610 53,540 Thereafter 229,657 109,943 339,600 Total lease payments 528,934 140,973 669,907 Less: Amounts representing interest (130,560) (86,038) (216,598) Total $ 398,374 $ 54,935 $ 453,309 (1) Includes leases with related parties. See Note 10 — Related Party Transactions for amounts leased from related parties. At September 30, 2023, the Company has entered into leases for Showrooms and equipment which have not yet commenced with expected leas e terms ranging from 3 to 17 years. The aggregate minimum rental payments over the term of the leases of approximately $159.5 million are not included i n the above table. Supplemental cash flow information related to leases for the nine months ended September 30, 2023 and 2022, respectively is as follows (amounts in thousands): Nine months ended September 30, 2023 2022 As Restated Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 41,759 $ 35,587 Operating cash flows for finance leases 3,642 3,758 Financing cash flows for finance leases 503 113 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 76,375 $ 50,565 Finance leases 2,813 2,018 |
Equity Based Compensation
Equity Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity Based Compensation | Equity Based Compensation The following tables summarize the activity of the Company’s Restricted Stock for the nine months ended September 30, 2023 and the equity based compensation expense for the nine and three months ended September 30, 2023 and 2022, respectively (dollars in thousands): Restricted Stock - Class A Amount Weighted Average Grant Date Fair Value Unvested at December 31, 2022 1,510,269 $ 6.94 Granted — — Forfeited — — Vested (1,009,965) 2.71 Unvested at September 30, 2023 500,304 $ 15.47 Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Equity based compensation expense - Restricted Stock (1) $ 2,028 $ 2,073 $ 668 $ 684 (1) Total unrecognized equity based compensation to be recognized in future periods is $6.8 million at September 30, 2023, and will be recognized over a weighted average period of 2.65 years. Equity based compensation expense is recorded within selling, general and administrative expenses on our condensed consolidated statements of comprehensive income. The Arhaus, Inc. 2021 Equity Incentive Plan (the “2021 Plan”) was adopted on November 8, 2021. The 2021 Plan authorizes the Company the ability to grant stock options (either incentive or non-qualified), stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance shares, performance share units (“PSUs”) and other stock-based awards with respect to our Class A common stock to our employees, officers, consultants, advisors and directors. The maximum number of Class A common stock that may be granted under the 2021 Plan is 11,205,100 shares. As of September 30, 2023 , the Company has granted RSUs and PSUs to certain named executive officers and other key employees (“Award Recipient”). The Company has also issued RSU awards to certain members of the Board of Directors. Each RSU represents a contingent right to receive one share of the Company’s Class A common stock upon vesting. The RSUs granted to Award Recipients vest in one-third increments on each of the first, second and third anniversary of the date of grant, provided that the Award Recipient continues to serve the Company through the applicable vesting date (“Continuous Service”). If the Award Recipient’s Continuous Service terminates for any reason other than death, disability or in connection with a change in control (as such terms are defined in the 2021 Plan), unless the Compensation Committee of the Board of Directors determines otherwise, all RSUs that are unvested at the time of such termination shall be forfeited and canceled immediately without consideration. The RSUs issued to certain members of the Board of Directors will vest on the one-year anniversary of the grant date. The Company accounts for forfeitures as they occur. Each PSU represents a contingent right to receive one share of the Company’s Class A common stock upon vesting. The number of PSUs earned will be based on the Company’s financial performance as measured against pre-established target goals for cumulative demand revenue and cumulative adjusted EBITDA (the “Performance Goals”) over the applicable performance period. PSUs will vest as of the end of the performance period subject to the Award Recipient’s Continuous Service, but will not settle and payout until the number of PSUs earned is determined by the Compensation Committee. The Award Recipient may earn between 0% and 200% of the PSU target award based on the Company’s achievement of the Performance Goals. The Company accounts for forfeitures as they occur. The following table summarizes the activity of the Company’s PSU and RSU awards for the nine months ended September 30, 2023, and their equity based compensation expense for the nine and three months ended September 30, 2023 and 2022, respectively (dollars in thousands): PSU Awards RSU Awards Amount Weighted Average Grant Date Fair Value Amount Weighted Average Grant Date Fair Value Unvested at December 31, 2022 513,125 $ 5.95 731,661 $ 5.84 Granted 281,163 9.47 468,483 9.05 Forfeited (89,336) 7.20 (82,368) 7.18 Vested — — (302,137) 5.75 Unvested at September 30, 2023 704,952 $ 7.20 815,639 $ 7.58 Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Equity based compensation expense - PSUs (1) $ 1,662 $ 238 $ 417 $ 238 Equity based compensation expense - RSUs (2) $ 2,062 $ 302 $ 763 $ 302 (1) Total unrecognized equ ity based compensation for the PSUs to be recognized in future periods is $4.2 million at September 30, 2023, and will be recognized over a weighted average period of 1.74 years. Equity based compensation expense is recorded within selling, general and administrative expenses on our condensed consolidated statements of comprehensive income. (2) Total unrecognized equity based compensation for the RSUs to be recognized in future periods is $5.1 million at September 30, 2023, and will be recognized over a weighted average period of 2.07 years. Equity based compensation expense is recorded within selling, general and administrative expenses on our condensed consolidated statements of comprehensive income. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Our chief operating decision maker is our Chief Executive Officer (“CEO”), who reviews financial information presented on a consolidated basis for purposes of making decisions, assessing financial performance and allocating resources. We operate our business as one operating segment and therefore we have one reportable segment that offers an assortment of merchandise across a number of categories, including furniture, outdoor, lighting, textiles, and décor. The assortment of merchandise can be purchased through our retail and eCommerce sales channels. The majority of our net revenue is generated through sales to clients in the United States. Sales to clients outside of the United States are not significant. Further, no single client represents more than ten percent or more of our net revenue. The following table shows net revenue by merchandise sales channel for the nine and three months ended September 30, 2023 and 2022, respectively (amounts in thousands): Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Retail $ 768,624 $ 727,953 $ 261,786 $ 268,988 eCommerce 175,072 144,642 64,443 51,042 Total net revenue $ 943,696 $ 872,595 $ 326,229 $ 320,030 |
Net and Comprehensive Income pe
Net and Comprehensive Income per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net and Comprehensive Income per Share | Net and Comprehensive Income per Share Basic and diluted net and comprehensive income per share for the nine and three months ended September 30, 2023 and 2022, was calculated by dividing net and comprehensive income by the number of basic and diluted weighted average common shares outstanding. Basic and diluted net and comprehensive income per share for the nine and three months ended September 30, 2023 and 2022 , is as follows (amounts in thousands except share and per share data): Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Numerator Net and comprehensive income $ 94,023 $ 89,633 $ 19,741 $ 36,936 Denominator—Weighted Average Shares Outstanding Weighted-average number of common shares outstanding, basic 139,365,870 137,939,577 139,628,776 138,484,495 Effect of dilutive restricted stock (1) 655,800 1,606,225 512,123 1,360,838 Weighted-average number of common shares outstanding, diluted 140,021,670 139,545,802 140,140,899 139,845,333 Net and Comprehensive Income Per Share Net and comprehensive income per share, basic $ 0.67 $ 0.65 $ 0.14 $ 0.27 Net and comprehensive income per share, diluted $ 0.67 $ 0.64 $ 0.14 $ 0.26 (1) During the nine and three months ended September 30, 2023, 736,173 and 416,123 shares of unvested restricted stock and RSUs were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive, respectively. During the nine and three months ended September 30, 2022, 594,312 and 546,164 shares of unvested restricted stock and RSUs were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is involved in litigation and claims that are incidental to its business. Although the outcome of these matters cannot be determined at the present time, management of the Company believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. From time to time, the Company has received inquiries from a number of state and local taxing agencies with respect to the remittance of sales, use, telecommunications, excise, and income taxes. Several jurisdictions are currently conducting tax audits of the Company's records. The Company collects, or has accrued for, taxes that it believes are required to be remitted. The amounts that have been remitted have historically been within the accruals established by the Company. The Company adjusts its accrual when facts relating to specific exposures warrant such adjustment. As of September 30, 2023 and December 31, 2022, we recorded liabilities of $0.3 million and $0.4 million, respectively, in accrued taxes on the condensed consolidated balance sheets for non-income tax matters that were probable and reasonably estimable. In August 2023, the Company committed to make a $10.0 million donation to The Nature Conservancy. For the nine and three months ended September 30, 2023, the Company recorded expense of $10.0 million and $10.0 million, respectively, within selling, general and administrative expenses on our condensed consolidated statements of comprehensive income. As of September 30, 2023, we recorded a liability of $10.0 million in accrued other expense on our condensed consolidated balance sheet . |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions L easing transactio ns I n November 2000, the Company entered into a lease agreement with Pagoda Partners, LLC, a company of which John Reed, our CEO, indir ectly owns 50%, for our warehouse in Walton Hills, Ohio. The base lease term was 17 years with a 5-year renewal option. In August 2020, the Company amended the lease agreement to extend the lease term to April 2024. The monthly rental payments are $0.1 million. In July 2023, the Company amended the lease agreement to extend the lease term to April 2034 with one additional 5-year renewal option. The monthly rental payments range from $0.1 million to $0.2 million. Rent expense was $1.1 million and $1.0 million for the nine months ended September 30, 2023 and 2022, respectively. Rent expense w as $0.4 million and $0.3 million for the three months ended September 30, 2023 and 2022, respectively. In July 2010, the Company entered into a lease agreement with Brooklyn Arhaus, a company of which our CEO and Mr. Beargie, a Director of the Company, own 85% and 15%, respectively, for our Outlet in Brooklyn, Ohio. The base lease term is 15 years with no lease renewal options. The monthly rental payments are $20 thousand. Rent expense was $0.2 million and $0.2 million for the nine months ended September 30, 2023 and 2022, respectively. Rent expense was $0.1 million and $0.1 million for the three months ended September 30, 2023 and 2022, respectively. In March 2021, the Company entered into a lease agreement with Premier Conover, LLC, a company of which our CEO indirectly owns 40%, for a distribution center and manufacturing building, for which construction was completed in the fourth quarter of 2021. The base lease term is for 12 years, with a 10-year renewal option and two additional 5-year renewal options at the higher of the minimum base rent or the fair market rent at the time of renewal execution. The monthly rental payments range from $0.2 million to $0.3 million during the 12-year base lease term and from $0.4 million to $0.5 million during the 10-year renewal period. Rent expense was $3.0 million and $2.8 million for the nine months ended September 30, 2023 and 2022, respectively. Rent expense was $1.0 million and $1.0 million for the three months ended September 30, 2023 and 2022, respectively. Other transactions The accounts payable due to related parties for state and federal income tax refunds were $2.4 million and $1.8 million at September 30, 2023 and December 31, 2022, respectively, and are included within accounts payable on the condensed consolidated balance sheets. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expenses were $31.8 million and $27.9 million in the nine months ended September 30, 2023 and 2022, respectively. Income tax expenses were $5.3 million and $9.6 million in the three months ended September 30, 2023 and 2022, respectively. The effective tax rate was 25.3% and 23.7% for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rate was 21.2% and 20.6% for the three months ended September 30, 2023 and 2022, respectively. |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying condensed consolidated financial statements include our accounts and those of our wholly owned subsidiaries. Accordingly, all intercompany balances and transactions have been eliminated through the consolidation process. The accompanying condensed consolidated balance sheets at September 30, 2023 and December 31, 2022, the condensed consolidated statements of comprehensive income and changes in stockholders’equity for the nine and three months ended September 30, 2023 and 2022, the condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022 and the related interim condensed consolidated disclosures are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In management’s opinion, the accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position at September 30, 2023, the results of operations and changes in stockholders’equity for the nine and three months ended September 30, 2023 and 2022 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022. The condensed consolidated balance sheet as of December 31, 2022 included herein was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The results for the nine and three months ended September 30, 2023 and 2022 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. |
Use of Estimates | Use of Estimates The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accounting estimates and other matters included within our condensed consolidated financial statements and notes to the condensed consolidated financial statements we have assessed include, but were not limited to, revenue recognition, including a reserve for merchandise returns, inventory reserves, goodwill and fair value of financial instruments which include, but are not limited to, |
Client Deposits and Gift Cards | Client Deposits Client deposits represent payments made by clients on orders. At the time of purchase, the Company collects deposits for all orders equivalent to at least 50 percent of the clients’ purchase price. Orders are recognized as revenue when the merchandise is delivered to the client and at the time of delivery the client deposit is no longer recorded as a liability. The Company expects substantially all client deposits as of September 30, 2023 will be recognized as net revenue within the next 12 months as the performance obligations are satisfied. Gift Cards The Company sells gift cards to clients in our Showrooms and through our website. Such gift cards do not have expiration dates. We defer revenue when payments are received in advance of performance for unsatisfied obligations related to our gift cards. The liability related to unredeemed gift cards at September 30, 2023 and December 31, 2022 of $0.4 million and $1.0 million, respectively, is recorded in the accrued other expenses line item of the condensed consolidated balance sheets. The Company recognizes income associated with breakage proportional to actual gift card redemptions. For the nine and three months ended September 30, 2023 , breakage income was $0.8 million and $0.1 million, respectively . For the nine and three months ended September 30, 2022, breakage was minimal. |
Fair Value of Financial Instruments | Fair Values of Financial Instruments The Company’s primary financial ins truments are cash and cash equivalent investments, accounts receivable, payables, lease obligations and equity based compensation instruments. Due to the shor t-term maturities of cash and cash equivalent investments, accounts receivable and payables, the Company believes the fair values of these instruments approximate their respective carrying values at September 30, 2023 and December 31, 2022. See Note 5 — Leases for discussion of our lease obligations and Note 6 — Equity Based Compensation for discussion of our equity based compensation instruments. The Company has established a hierarchy to measure our financial instruments at fair value, which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect the Company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. The hierarchy defines three levels of inputs that may be used to measure fair value: Level 1 Unadjusted quoted prices in active markets for identical, unrestricted assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 Unobservable inputs that reflect the entity’s own assumptions about the assumptions market participants would use in the pricing of the asset or liability and are consequently not based on market activity but rather through particular valuation techniques. |
New Accounting Standards Adopted in Fiscal 2023 | New Accounting Standards Adopted in Fiscal 2023 We did not adopt any Accounting Standards Updates (“ASU”) in the nine months ended September 30, 2023 that had a material impact on our accounting policies or our condensed consolidated financial statements. Accounting Standards Not Yet Adopted The following table summarizes accounting pronouncements which we have not yet adopted but will be adopted in the upcoming fiscal year. ASU 2023-01 is effective for annual periods beginning after December 15, 2023. We believe the adoption will not have a material impact on our accounting policies or our consolidated financial statements and related disclosures. ASU Description Adoption Date ASU 2023-01 Leases (Topic 842): Common Control Arrangements January 1, 2024 |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Revision of Previously Issued Consolidated Financial Statements | The following tables summarize the impact of these corrections for the periods presented (amounts in thousands): September 30, 2023 Condensed Consolidated Balance Sheet As Reported Adjustment As Restated Prepaid and other current assets $ 63,140 $ (26,441) $ 36,699 Total current assets $ 574,457 $ (26,441) $ 548,016 Operating right-of-use assets (1) $ 314,378 $ (4,806) $ 309,572 Property, furniture and equipment, net 156,632 26,441 183,073 Total assets $ 1,115,574 $ (4,806) $ 1,110,768 Current portion of operating lease liabilities (1) $ 42,472 $ 94 $ 42,566 Total current liabilities $ 386,163 $ 94 $ 386,257 Operating lease liabilities, long-term (1) $ 360,708 $ (4,900) $ 355,808 Total liabilities $ 807,086 $ (4,806) $ 802,280 Total liabilities and stockholders' equity $ 1,115,574 $ (4,806) $ 1,110,768 (1) These identified adjustments are to correct other immaterial errors. Nine months ended September 30, 2023 Condensed Consolidated Statement of Cash Flows As Reported Adjustment As Restated Cash flows from operating activities Changes in prepaid and other assets $ (28,952) $ 20,504 $ (8,448) Changes in accounts payable (4,093) (6,048) (10,141) Net cash provided by operating activities $ 131,368 $ 14,456 $ 145,824 Cash flows from investing activities Purchases of property, furniture and equipment $ (42,306) $ (14,456) $ (56,762) Net cash used in investing activities $ (41,973) $ (14,456) $ (56,429) Supplemental disclosure of cash flow information Noncash operating activities: Lease incentives $ 7,313 $ (7,313) $ — Noncash investing activities: Purchase of property, furniture and equipment in accounts payable $ 2,756 $ 6,048 $ 8,804 December 31, 2022 Condensed Consolidated Balance Sheet As Reported Adjustment As Revised Prepaid and other current assets $ 37,371 $ (7,503) $ 29,868 Total current assets $ 478,051 $ (7,503) $ 470,548 Operating right-of-use assets $ 252,055 $ 5,292 $ 257,347 Property, furniture and equipment, net 135,066 5,547 140,613 Other noncurrent assets 296 1,956 2,252 Total assets $ 931,792 $ 5,292 $ 937,084 Current portion of operating lease liabilities $ 39,744 $ (494) $ 39,250 Total current liabilities $ 373,783 $ (494) $ 373,289 Operating lease liabilities, long-term $ 289,871 $ 5,786 $ 295,657 Total liabilities $ 722,097 $ 5,292 $ 727,389 Total liabilities and stockholders' equity $ 931,792 $ 5,292 $ 937,084 Nine months ended September 30, 2022 Condensed Consolidated Statement of Cash Flows As Reported Adjustment As Revised Cash flows from operating activities Changes in prepaid and other assets $ (11,249) $ 5,032 $ (6,217) Changes in accounts payable 10,334 (1,810) 8,524 Net cash provided by operating activities $ 58,237 $ 3,222 $ 61,459 Cash flows from investing activities Purchases of property, furniture and equipment $ (36,950) $ (3,222) $ (40,172) Net cash used in investing activities $ (36,950) $ (3,222) $ (40,172) Supplemental disclosure of cash flow information Noncash operating activities: Lease incentives $ 7,532 $ (7,532) $ — Noncash investing activities: Purchase of property, furniture and equipment in accounts payable $ 2,661 $ 1,810 $ 4,471 |
Schedule of Prepaid and Other Current Assets | Prepaid and other current assets consist of the following (amounts in thousands): September 30, 2023 December 31, 2022 As Restated Tenant allowance receivable $ 7,373 $ 4,312 Prepaid expenses 8,802 11,228 Right of return asset 2,576 2,938 Prepaid advertising 3,760 816 Prepaid cloud computing arrangements, net (1) 2,845 1,054 Other current assets 11,343 9,520 Total prepaid and other current assets $ 36,699 $ 29,868 (1) Presented net of accumulated amortization of $1.2 million as of September 30, 2023. |
Merchandise Warranties (Tables)
Merchandise Warranties (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Merchandise Warranty Liability | A reconciliation of the changes in our limited merchandise warranty liability is as follows (amounts in thousands): Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Balance as of beginning of period $ 6,375 $ 4,724 $ 6,578 $ 5,412 Accruals during the period 10,292 8,285 3,543 3,181 Settlements during the period (9,854) (7,152) (3,308) (2,736) Balance as of end of the period (1) $ 6,813 $ 5,857 $ 6,813 $ 5,857 (1) $3.9 million and $3.7 million were recorded in accrued other expenses at September 30, 2023 and December 31, 2022, respectively. The remainder is recorded in other long-term liabilities on our condensed consolidated balance sheets. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Liability for Operating and Finance Leases | The following table summarizes the amounts recognized in our condensed consolidated balance sheets related to leases as of September 30, 2023 and December 31, 2022, respectively (amounts in thousands): Condensed Consolidated Balance Sheet Classification September 30, 2023 December 31, 2022 As Restated Assets Operating lease assets Operating right-of-use assets $ 309,572 $ 257,347 Finance lease assets Financing right-of-use assets 39,480 38,522 Total leased assets $ 349,052 $ 295,869 Liabilities Current operating leases Current portion of operating lease liabilities $ 42,566 $ 39,250 Non-current operating leases Operating lease liabilities, long-term 355,808 295,657 Total operating lease liabilities 398,374 334,907 Current finance leases Current portion of financing lease liabilities 925 531 Non-current finance leases Financing lease liabilities, long-term 54,010 51,835 Total finance lease liabilities 54,935 52,366 Total lease liabilities $ 453,309 $ 387,273 |
Schedule of Components of Lease Expense | The components of lease cost recognized within our condensed consolidated statements of comprehensive income for the nine and three months ended September 30, 2023 and 2022, respectively are as follows (amounts in thousands): Nine months ended September 30, Three months ended September 30, Condensed Consolidated Income Statement Classification 2023 2022 2023 2022 Lease costs: Operating lease costs Cost of goods sold $ 31,894 $ 25,798 $ 11,518 $ 8,716 Operating lease costs Selling, general and administrative expenses 7,375 4,743 2,518 1,955 Finance lease costs Amortization of right-of-use assets Selling, general and administrative expenses 1,838 1,516 758 540 Interest expense on lease liabilities Interest expense (income), net 3,852 3,758 1,316 1,270 Variable lease costs (1) Cost of goods sold 28,474 26,764 9,327 9,961 Short term lease costs Selling, general and administrative expenses 165 507 29 170 Total lease costs $ 73,598 $ 63,086 $ 25,466 $ 22,612 (1) Includes $0.4 million of month-to-month lease costs for the nine months ended September 30, 2023 . The Company did not have month-to-month lease costs for the nine and three months ended September 30, 2022 or the three months ended September 30, 2023 . Weighted Average Remaining Lease Term (In Years) September 30, 2023 September 30, 2022 As Restated Operating leases 9.27 8.72 Finance leases 21.02 22.66 Weighted Average Discount Rate September 30, 2023 September 30, 2022 As Restated Operating leases 5.94 % 4.56 % Finance leases 9.63 % 9.72 % |
Schedule of Lessee, Operating Lease, Liability, Maturity | Future lease liabilities at September 30, 2023 are as follows (amounts in thousands): Year Ending December 31, Operating Lease Liabilities (1) Finance Lease Liabilities Total Lease Liabilities As Restated As Restated Remainder of 2023 $ 15,087 $ 1,533 $ 16,620 2024 65,085 5,789 70,874 2025 61,146 5,789 66,935 2026 56,918 6,249 63,167 2027 53,111 6,060 59,171 2028 47,930 5,610 53,540 Thereafter 229,657 109,943 339,600 Total lease payments 528,934 140,973 669,907 Less: Amounts representing interest (130,560) (86,038) (216,598) Total $ 398,374 $ 54,935 $ 453,309 (1) Includes leases with related parties. See Note 10 — Related Party Transactions for amounts leased from related parties. |
Schedule of Finance Lease, Liability, Fiscal Year Maturity | Future lease liabilities at September 30, 2023 are as follows (amounts in thousands): Year Ending December 31, Operating Lease Liabilities (1) Finance Lease Liabilities Total Lease Liabilities As Restated As Restated Remainder of 2023 $ 15,087 $ 1,533 $ 16,620 2024 65,085 5,789 70,874 2025 61,146 5,789 66,935 2026 56,918 6,249 63,167 2027 53,111 6,060 59,171 2028 47,930 5,610 53,540 Thereafter 229,657 109,943 339,600 Total lease payments 528,934 140,973 669,907 Less: Amounts representing interest (130,560) (86,038) (216,598) Total $ 398,374 $ 54,935 $ 453,309 (1) Includes leases with related parties. See Note 10 — Related Party Transactions for amounts leased from related parties. |
Schedule of Supplemental Cash Flow from Leases | Supplemental cash flow information related to leases for the nine months ended September 30, 2023 and 2022, respectively is as follows (amounts in thousands): Nine months ended September 30, 2023 2022 As Restated Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 41,759 $ 35,587 Operating cash flows for finance leases 3,642 3,758 Financing cash flows for finance leases 503 113 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 76,375 $ 50,565 Finance leases 2,813 2,018 |
Equity Based Compensation (Tabl
Equity Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Unvested Stock Activity | The following tables summarize the activity of the Company’s Restricted Stock for the nine months ended September 30, 2023 and the equity based compensation expense for the nine and three months ended September 30, 2023 and 2022, respectively (dollars in thousands): Restricted Stock - Class A Amount Weighted Average Grant Date Fair Value Unvested at December 31, 2022 1,510,269 $ 6.94 Granted — — Forfeited — — Vested (1,009,965) 2.71 Unvested at September 30, 2023 500,304 $ 15.47 Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Equity based compensation expense - Restricted Stock (1) $ 2,028 $ 2,073 $ 668 $ 684 (1) Total unrecognized equity based compensation to be recognized in future periods is $6.8 million at September 30, 2023, and will be recognized over a weighted average period of 2.65 years. Equity based compensation expense is recorded within selling, general and administrative expenses on our condensed consolidated statements of comprehensive income. The following table summarizes the activity of the Company’s PSU and RSU awards for the nine months ended September 30, 2023, and their equity based compensation expense for the nine and three months ended September 30, 2023 and 2022, respectively (dollars in thousands): PSU Awards RSU Awards Amount Weighted Average Grant Date Fair Value Amount Weighted Average Grant Date Fair Value Unvested at December 31, 2022 513,125 $ 5.95 731,661 $ 5.84 Granted 281,163 9.47 468,483 9.05 Forfeited (89,336) 7.20 (82,368) 7.18 Vested — — (302,137) 5.75 Unvested at September 30, 2023 704,952 $ 7.20 815,639 $ 7.58 Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Equity based compensation expense - PSUs (1) $ 1,662 $ 238 $ 417 $ 238 Equity based compensation expense - RSUs (2) $ 2,062 $ 302 $ 763 $ 302 (1) Total unrecognized equ ity based compensation for the PSUs to be recognized in future periods is $4.2 million at September 30, 2023, and will be recognized over a weighted average period of 1.74 years. Equity based compensation expense is recorded within selling, general and administrative expenses on our condensed consolidated statements of comprehensive income. (2) Total unrecognized equity based compensation for the RSUs to be recognized in future periods is $5.1 million at September 30, 2023, and will be recognized over a weighted average period of 2.07 years. Equity based compensation expense is recorded within selling, general and administrative expenses on our condensed consolidated statements of comprehensive income. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Net Revenue by Segment | The following table shows net revenue by merchandise sales channel for the nine and three months ended September 30, 2023 and 2022, respectively (amounts in thousands): Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Retail $ 768,624 $ 727,953 $ 261,786 $ 268,988 eCommerce 175,072 144,642 64,443 51,042 Total net revenue $ 943,696 $ 872,595 $ 326,229 $ 320,030 |
Net and Comprehensive Income _2
Net and Comprehensive Income per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Basic and diluted net and comprehensive income per share for the nine and three months ended September 30, 2023 and 2022 , is as follows (amounts in thousands except share and per share data): Nine months ended September 30, Three months ended September 30, 2023 2022 2023 2022 Numerator Net and comprehensive income $ 94,023 $ 89,633 $ 19,741 $ 36,936 Denominator—Weighted Average Shares Outstanding Weighted-average number of common shares outstanding, basic 139,365,870 137,939,577 139,628,776 138,484,495 Effect of dilutive restricted stock (1) 655,800 1,606,225 512,123 1,360,838 Weighted-average number of common shares outstanding, diluted 140,021,670 139,545,802 140,140,899 139,845,333 Net and Comprehensive Income Per Share Net and comprehensive income per share, basic $ 0.67 $ 0.65 $ 0.14 $ 0.27 Net and comprehensive income per share, diluted $ 0.67 $ 0.64 $ 0.14 $ 0.26 (1) During the nine and three months ended September 30, 2023, 736,173 and 416,123 shares of unvested restricted stock and RSUs were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive, respectively. During the nine and three months ended September 30, 2022, 594,312 and 546,164 shares of unvested restricted stock and RSUs were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive, respectively. |
Nature of Business and Basis _4
Nature of Business and Basis of Presentation - Revision of Previously Issued Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prepaid and other current assets | $ 36,699 | $ 29,868 |
Total current assets | 548,016 | 470,548 |
Operating right-of-use assets | 309,572 | 257,347 |
Property, furniture and equipment, net | 183,073 | 140,613 |
Total assets | 1,110,768 | 937,084 |
Current portion of operating lease liabilities | 42,566 | 39,250 |
Total current liabilities | 386,257 | 373,289 |
Operating lease liabilities, long-term | 355,808 | 295,657 |
Other noncurrent assets | 3,081 | 2,252 |
Total liabilities | 802,280 | 727,389 |
Total liabilities and stockholders' equity | 1,110,768 | 937,084 |
As Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prepaid and other current assets | 63,140 | 37,371 |
Total current assets | 574,457 | 478,051 |
Operating right-of-use assets | 314,378 | 252,055 |
Property, furniture and equipment, net | 156,632 | 135,066 |
Total assets | 1,115,574 | 931,792 |
Current portion of operating lease liabilities | 42,472 | 39,744 |
Total current liabilities | 386,163 | 373,783 |
Operating lease liabilities, long-term | 360,708 | 289,871 |
Other noncurrent assets | 296 | |
Total liabilities | 807,086 | 722,097 |
Total liabilities and stockholders' equity | 1,115,574 | 931,792 |
Adjustment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prepaid and other current assets | (26,441) | (7,503) |
Total current assets | (26,441) | (7,503) |
Operating right-of-use assets | (4,806) | 5,292 |
Property, furniture and equipment, net | 26,441 | 5,547 |
Total assets | (4,806) | 5,292 |
Current portion of operating lease liabilities | 94 | (494) |
Total current liabilities | 94 | (494) |
Operating lease liabilities, long-term | (4,900) | 5,786 |
Other noncurrent assets | 1,956 | |
Total liabilities | (4,806) | 5,292 |
Total liabilities and stockholders' equity | $ (4,806) | $ 5,292 |
Nature of Business and Basis _5
Nature of Business and Basis of Presentation - Revision of Previously Issued Condensed Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Changes in prepaid and other assets | $ (8,448) | $ (6,217) |
Changes in accounts payable | (10,141) | 8,524 |
Net cash provided by operating activities | 145,824 | 61,459 |
Cash flows from investing activities | ||
Purchases of property, furniture and equipment | (56,762) | (40,172) |
Net cash used in investing activities | (56,429) | (40,172) |
Noncash operating activities: | ||
Lease incentives | 0 | 0 |
Noncash investing activities: | ||
Purchase of property, furniture and equipment in accounts payable | 8,804 | 4,471 |
As Reported | ||
Cash flows from operating activities | ||
Changes in prepaid and other assets | (28,952) | (11,249) |
Changes in accounts payable | (4,093) | 10,334 |
Net cash provided by operating activities | 131,368 | 58,237 |
Cash flows from investing activities | ||
Purchases of property, furniture and equipment | (42,306) | (36,950) |
Net cash used in investing activities | (41,973) | (36,950) |
Noncash operating activities: | ||
Lease incentives | 7,313 | 7,532 |
Noncash investing activities: | ||
Purchase of property, furniture and equipment in accounts payable | 2,756 | 2,661 |
Adjustment | ||
Cash flows from operating activities | ||
Changes in prepaid and other assets | 20,504 | 5,032 |
Changes in accounts payable | (6,048) | (1,810) |
Net cash provided by operating activities | 14,456 | 3,222 |
Cash flows from investing activities | ||
Purchases of property, furniture and equipment | (14,456) | (3,222) |
Net cash used in investing activities | (14,456) | (3,222) |
Noncash operating activities: | ||
Lease incentives | (7,313) | (7,532) |
Noncash investing activities: | ||
Purchase of property, furniture and equipment in accounts payable | $ 6,048 | $ 1,810 |
Nature of Business and Basis _6
Nature of Business and Basis of Presentation - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) store | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) store | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Number of stores | store | 86 | 86 | |||
Client deposits, percentage collected at least (as a percent) | 50% | ||||
Client deposits | $ 212,406 | $ 212,406 | $ 202,587 | ||
Breakage income | 100 | $ 0 | 800 | $ 0 | |
Interest income | 2,500 | $ 600 | 5,800 | $ 600 | |
Other Accrued Expenses | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Client deposits | $ 400 | $ 400 | $ 1,000 |
Nature of Business and Basis _7
Nature of Business and Basis of Presentation - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Tenant allowance receivable | $ 7,373 | $ 4,312 |
Prepaid expenses | 8,802 | 11,228 |
Right of return asset | 2,576 | 2,938 |
Prepaid advertising | 3,760 | 816 |
Prepaid cloud computing arrangements, net | 2,845 | 1,054 |
Other current assets | 11,343 | 9,520 |
Prepaid and other current assets | 36,699 | $ 29,868 |
Prepaid cloud computing arrangements, amortization expense | $ 1,200 |
Merchandise Warranties - Narrat
Merchandise Warranties - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Minimum | |
Product Warranty Liability [Line Items] | |
Warranty, performance obligation period | 3 years |
Maximum | |
Product Warranty Liability [Line Items] | |
Warranty, performance obligation period | 10 years |
Merchandise Warranties - Change
Merchandise Warranties - Change in Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance as of beginning of period | $ 6,578 | $ 5,412 | $ 6,375 | $ 4,724 |
Accruals during the period | 3,543 | 3,181 | 10,292 | 8,285 |
Settlements during the period | (3,308) | (2,736) | (9,854) | (7,152) |
Balance as of the end of the period | 6,813 | 5,857 | 6,813 | 5,857 |
Accrued and other expenses | 6,813 | $ 5,857 | 6,813 | $ 5,857 |
Accrued Other Expenses | ||||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance as of beginning of period | 3,700 | |||
Balance as of the end of the period | 3,900 | 3,900 | ||
Accrued and other expenses | $ 3,900 | $ 3,900 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - 2021 Credit Facility - USD ($) | 1 Months Ended | ||||
Dec. 09, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Nov. 08, 2021 | |
Debt Instrument [Line Items] | |||||
Credit facility increase | $ 25,000,000 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility, face amount | $ 75,000,000 | $ 50,000,000 | |||
Credit facility, basis spread on variable rate | 1.50% | 1.50% | |||
Borrowings on credit facility | $ 0 | $ 0 | |||
Loan costs, net | 400,000 | ||||
Accumulated amortization, deferred loan costs | $ 100,000 | $ 100,000 | |||
Revolving Credit Facility | Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Credit facility, face amount | 10,000,000 | ||||
Revolving Credit Facility | Swingline Loan | |||||
Debt Instrument [Line Items] | |||||
Credit facility, face amount | $ 5,000,000 |
Leases - Liability for Operatin
Leases - Liability for Operating and Finance Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating right-of-use assets | $ 309,572 | $ 257,347 |
Financing right-of-use assets | 39,480 | 38,522 |
Total leased assets | 349,052 | 295,869 |
Current portion of operating lease liabilities | 42,566 | 39,250 |
Operating lease liabilities, long-term | 355,808 | 295,657 |
Total operating lease liabilities | 398,374 | 334,907 |
Current portion of financing lease liabilities | 925 | 531 |
Financing lease liabilities, long-term | 54,010 | 51,835 |
Total finance lease liabilities | 54,935 | 52,366 |
Total lease liability | $ 453,309 | $ 387,273 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lease Cost [Line Items] | ||||
Other lease costs | $ 0 | $ 0 | $ 400 | $ 0 |
Total lease costs | 25,466 | 22,612 | 73,598 | 63,086 |
Cost of goods sold | ||||
Lease Cost [Line Items] | ||||
Operating lease costs | 11,518 | 8,716 | 31,894 | 25,798 |
Other lease costs | 9,327 | 9,961 | 28,474 | 26,764 |
Selling, general and administrative expenses | ||||
Lease Cost [Line Items] | ||||
Operating lease costs | 2,518 | 1,955 | 7,375 | 4,743 |
Amortization of right-of-use assets | 758 | 540 | 1,838 | 1,516 |
Other lease costs | 29 | 170 | 165 | 507 |
Interest expense (income), net | ||||
Lease Cost [Line Items] | ||||
Interest expense on lease liabilities | $ 1,316 | $ 1,270 | $ 3,852 | $ 3,758 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Lease Term (Details) | Sep. 30, 2023 | Sep. 30, 2022 |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term | 9 years 3 months 7 days | 8 years 8 months 19 days |
Finance leases | 21 years 7 days | 22 years 7 months 28 days |
Leases - Schedule of Weighted_2
Leases - Schedule of Weighted Average Discount Rate (Details) | Sep. 30, 2023 | Sep. 30, 2022 |
Leases [Abstract] | ||
Operating lease, weighted average discount rate | 5.94% | 4.56% |
Finance leases | 9.63% | 9.72% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Lease Cost [Line Items] | |
Aggregate minimum rental payments, not yet commenced | $ 159.5 |
Minimum | |
Lease Cost [Line Items] | |
Lease term, not yet commenced | 3 years |
Maximum | |
Lease Cost [Line Items] | |
Lease term, not yet commenced | 17 years |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Operating Lease Liabilities | ||
Remainder of 2023 | $ 15,087 | |
2024 | 65,085 | |
2025 | 61,146 | |
2026 | 56,918 | |
2027 | 53,111 | |
2028 | 47,930 | |
Thereafter | 229,657 | |
Total lease payments | 528,934 | |
Less: Amounts representing interest | (130,560) | |
Total operating lease liabilities | 398,374 | $ 334,907 |
Finance Lease Liabilities | ||
Remainder of 2023 | 1,533 | |
2024 | 5,789 | |
2025 | 5,789 | |
2026 | 6,249 | |
2027 | 6,060 | |
2028 | 5,610 | |
Thereafter | 109,943 | |
Total lease payments | 140,973 | |
Less: Amounts representing interest | (86,038) | |
Total finance lease liabilities | 54,935 | $ 52,366 |
Total Lease Liabilities | ||
Remainder of 2023 | 16,620 | |
2024 | 70,874 | |
2025 | 66,935 | |
2026 | 63,167 | |
2027 | 59,171 | |
2028 | 53,540 | |
Total lease payments | 339,600 | |
Thereafter | 669,907 | |
Less: Amounts representing interest | (216,598) | |
Total | $ 453,309 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 41,759 | $ 35,587 |
Operating cash flows for finance leases | 3,642 | 3,758 |
Financing cash flows for finance leases | 503 | 113 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 76,375 | 50,565 |
Finance leases | $ 2,813 | $ 2,018 |
Equity Based Compensation - Unv
Equity Based Compensation - Unvested Stock Activity (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
PSU Awards | |
Amount | |
Unvested, beginning of period (in shares) | shares | 513,125 |
Granted (in shares) | shares | 281,163 |
Forfeited (in shares) | shares | (89,336) |
Vested (in shares) | shares | 0 |
Unvested, end of period (in shares) | shares | 704,952 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning of period (in dollars per share) | $ / shares | $ 5.95 |
Granted (in dollars per share) | $ / shares | 9.47 |
Forfeited (in dollars per share) | $ / shares | 7.20 |
Vested (in dollars per share) | $ / shares | 0 |
Unvested, end of period (in dollars per share) | $ / shares | $ 7.20 |
RSU Awards | |
Amount | |
Unvested, beginning of period (in shares) | shares | 731,661 |
Granted (in shares) | shares | 468,483 |
Forfeited (in shares) | shares | (82,368) |
Vested (in shares) | shares | (302,137) |
Unvested, end of period (in shares) | shares | 815,639 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning of period (in dollars per share) | $ / shares | $ 5.84 |
Granted (in dollars per share) | $ / shares | 9.05 |
Forfeited (in dollars per share) | $ / shares | 7.18 |
Vested (in dollars per share) | $ / shares | 5.75 |
Unvested, end of period (in dollars per share) | $ / shares | $ 7.58 |
Class A | Restricted Stock | |
Amount | |
Unvested, beginning of period (in shares) | shares | 1,510,269 |
Granted (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Vested (in shares) | shares | (1,009,965) |
Unvested, end of period (in shares) | shares | 500,304 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning of period (in dollars per share) | $ / shares | $ 6.94 |
Granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 2.71 |
Unvested, end of period (in dollars per share) | $ / shares | $ 15.47 |
Equity Based Compensation - Equ
Equity Based Compensation - Equity Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation expense | $ 668 | $ 684 | $ 2,028 | $ 2,073 |
Incentive Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | 6,800 | $ 6,800 | ||
Unrecognized compensation cost, period for recognition | 2 years 7 months 24 days | |||
PSU Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation expense | 417 | 238 | $ 1,662 | 238 |
Unrecognized compensation cost | 4,200 | $ 4,200 | ||
Unrecognized compensation cost, period for recognition | 1 year 8 months 26 days | |||
RSU Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation expense | 763 | $ 302 | $ 2,062 | $ 302 |
Unrecognized compensation cost | $ 5,100 | $ 5,100 | ||
Unrecognized compensation cost, period for recognition | 2 years 25 days |
Equity Based Compensation - Nar
Equity Based Compensation - Narrative (Details) - shares | Aug. 02, 2022 | Sep. 30, 2023 |
2021 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum shares that may be granted (in shares) | 11,205,100 | |
RSU Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
Annual vesting percentage | 33% | |
Number of common stocks received per each award unit vested | 1 | |
PSU Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of common stocks received per each award unit vested | 1 | |
PSU Awards | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 0% | |
PSU Awards | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 200% |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Segment Reporting - Net Revenue
Segment Reporting - Net Revenue by Merchandise Sales Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 326,229 | $ 320,030 | $ 943,696 | $ 872,595 |
Retail | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 261,786 | 268,988 | 768,624 | 727,953 |
eCommerce | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 64,443 | $ 51,042 | $ 175,072 | $ 144,642 |
Net and Comprehensive Income _3
Net and Comprehensive Income per Share - Calculation of EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator | ||||
Net income | $ 19,741 | $ 36,936 | $ 94,023 | $ 89,633 |
Denominator—Weighted Average Shares Outstanding | ||||
Weighted-average number of common shares outstanding, basic (in shares) | 139,628,776 | 138,484,495 | 139,365,870 | 137,939,577 |
Effect of dilutive restricted stock (in shares) | 512,123 | 1,360,838 | 655,800 | 1,606,225 |
Weighted-average number of common shares outstanding, diluted (in shares) | 140,140,899 | 139,845,333 | 140,021,670 | 139,545,802 |
Net and comprehensive income per share, basic (in dollars per share) | $ 0.14 | $ 0.27 | $ 0.67 | $ 0.65 |
Net and comprehensive income per share, diluted (in dollars per share) | $ 0.14 | $ 0.26 | $ 0.67 | $ 0.64 |
Antidilutive securities excluded from computation of earnings per hare (in shares) | 416,123 | 546,164 | 736,173 | 594,312 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Loss contingency accrual | $ 0.3 | $ 0.3 | $ 0.4 | |
Committed donation | $ 10 | |||
Donation expense | 10 | 10 | ||
Accrued donation cost | $ 10 | $ 10 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Jul. 31, 2023 USD ($) option | Mar. 31, 2021 USD ($) | Aug. 31, 2020 USD ($) | Jul. 31, 2010 USD ($) | Sep. 30, 2023 USD ($) option | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) option | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Nov. 30, 2000 | |
Related Party Transaction [Line Items] | ||||||||||
Operating lease, term (in years) | 12 years | |||||||||
Accounts payable | $ 58,138 | $ 58,138 | $ 62,636 | |||||||
Lessee, Operating Lease, Number Of Renewal Options | option | 2 | 2 | ||||||||
Walton Hills, Ohio | Warehouse | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Operating lease, renewal term (in years) | 5 years | |||||||||
Lease monthly payment | $ 100 | |||||||||
Number of options to extend | option | 1 | |||||||||
Brooklyn, Ohio | Outlet | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Lease monthly payment | $ 20 | |||||||||
Minimum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Operating lease, renewal term (in years) | 5 years | |||||||||
Minimum | Base term, 12 years | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Lease monthly payment | $ 200 | |||||||||
Minimum | Renewal term, 10 years | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Lease monthly payment | $ 400 | |||||||||
Minimum | Walton Hills, Ohio | Warehouse | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Lease monthly payment | $ 100 | |||||||||
Maximum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Operating lease, renewal term (in years) | 10 years | |||||||||
Maximum | Base term, 12 years | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Lease monthly payment | $ 300 | |||||||||
Maximum | Renewal term, 10 years | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Lease monthly payment | $ 500 | |||||||||
Maximum | Walton Hills, Ohio | Warehouse | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Lease monthly payment | $ 200 | |||||||||
Related Party | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Rent expense | $ 1,000 | $ 1,000 | $ 3,000 | $ 2,800 | ||||||
Accounts payable | 2,400 | 2,400 | $ 1,800 | |||||||
Related Party | Chief Executive Officer | Premier Canover, LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage by noncontrolling owners | 40% | |||||||||
Related Party | Walton Hills, Ohio | Chief Executive Officer | Pagoda Partners, LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage by noncontrolling owners | 50% | |||||||||
Related Party | Walton Hills, Ohio | Warehouse | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Operating lease, term (in years) | 17 years | |||||||||
Rent expense | 400 | 300 | 1,100 | 1,000 | ||||||
Related Party | Brooklyn, Ohio | Chief Executive Officer | Brooklyn Arhaus | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage by parent | 85% | |||||||||
Related Party | Brooklyn, Ohio | Director | Brooklyn Arhaus | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage by noncontrolling owners | 15% | |||||||||
Related Party | Brooklyn, Ohio | Outlet | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Operating lease, term (in years) | 15 years | |||||||||
Rent expense | $ 100 | $ 100 | $ 200 | $ 200 | ||||||
Related Party | Maximum | Walton Hills, Ohio | Warehouse | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Operating lease, renewal term (in years) | 5 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 5,297 | $ 9,568 | $ 31,771 | $ 27,851 |
Effective income tax rate | 21.20% | 20.60% | 25.30% | 23.70% |