Arhaus Inc (ARHS) 2024 Q3 法說會逐字稿

Good morning and welcome to the Arhaus third-quarter 2024 earnings conference call. (Operator Instructions) Please note that this call is being recorded and the reproduction of any part of this call is not permitted without written authorization from the company. I will now turn the call over to your host, John Reed, Co-Founder, Chairman, and Chief Executive Officer. Please go ahead.

早安，歡迎參加 Arhaus 2024 年第三季財報電話會議。（操作員說明）請注意，本次通話正在錄音，未經本公司書面授權，不得複製本通話的任何部分。我現在將把電話轉給主持人、聯合創始人、董事長兼首席執行官約翰·里德 (John Reed)。請繼續。

Good morning, everyone, and welcome to the Arhaus third-quarter conference call. On with me today are Dawn Phillipson, Chief Financial Officer; and Tara Atwood, our new Vice President of Investor Relations. Tara is a seasoned Investor Relations professional, and we are excited to welcome her to the Arhaus team. Now, I'll hand it over to Tara.

大家早安，歡迎參加 Arhaus 第三季電話會議。今天和我一起的是財務長 Dawn Phillipson；以及我們新任投資者關係副總裁塔拉·阿特伍德 (Tara Atwood)。Tara 是一位經驗豐富的投資者關係專業人士，我們很高興歡迎她加入 Arhaus 團隊。現在，我將把它交給塔拉。

Good morning and thank you for joining the Arhaus third-quarter 2024 earnings call. After our prepared remarks, we will be joined by Jen Porter, our Chief Marketing and eCommerce Officer for the Q&A session. During Q&A, please limit to one question and one follow-up.

早安，感謝您參加 Arhaus 2024 年第三季財報電話會議。在我們準備好的發言之後，我們的首席行銷和電子商務長 Jen Porter 將參加問答環節。在問答過程中，請限制為一個問題和一個後續行動。

We issued our earnings press release and our 10-Q for the quarter ended September 30, 2024, before market opened today. Those documents are available on our Investor Relations website at ir.arhaus.com. A replay of the call will be available on our website within 24 hours.

我們在今天開盤前發布了收益新聞稿和截至 2024 年 9 月 30 日的季度的 10 季度業績。這些文件可在我們的投資者關係網站 ir.arhaus.com 上取得。我們的網站將在 24 小時內提供通話重播。

As a reminder, remarks today concerning future expectations, events, objectives, strategies, trends, or results constitute forward-looking statements. Actual results or events may differ materially due to a number of risks and uncertainties. For a summary of these risk factors and additional information, please refer to this morning's press release and the cautionary statements and risk factors described in our most recent annual report on Form 10-K and subsequent 10-Qs, as such factors may be updated from time to time in our filings with the SEC.

提醒一下，今天有關未來預期、事件、目標、策略、趨勢或結果的言論構成前瞻性陳述。由於許多風險和不確定性，實際結果或事件可能存在重大差異。有關這些風險因素和其他資訊的摘要，請參閱今天上午的新聞稿以及我們最新的10-K 表格年度報告和隨後的10-Q 年度報告中描述的警示性聲明和風險因素，因為這些因素可能會從我們不時向美國證券交易委員會提交的文件。

The forward-looking statements are made as of today's date and except as may be required by law. The company undertakes no obligation to update or revise these statements. We will also refer to certain non-GAAP financial measures and this morning's press release includes the relevant non-GAAP reconciliation. Now, I will turn the call back over to John.

前瞻性陳述是截至今日作出的，除非法律另有規定。本公司不承擔更新或修改這些聲明的義務。我們也將參考某些非公認會計原則財務指標，今天早上的新聞稿包括相關的非公認會計原則調節表。現在，我將把電話轉回給約翰。

Thanks, Tara. I'd like to begin the call by expressing my gratitude to our team with their exceptional execution this quarter. Our long-term success is driven by their dedication to delivering outstanding products and creating an inspiring showroom experience. This quarter, we launched some of the most compelling new product collections in our house history, thoughtfully presented across our showrooms to elevate the client experience.

謝謝，塔拉。在通話開始時，我想對我們的團隊本季出色的執行力表示感謝。我們的長期成功得益於他們致力於提供卓越的產品和創造鼓舞人心的展廳體驗。本季度，我們推出了我們品牌歷史上一些最引人注目的新產品系列，並在我們的展廳中精心展示，以提升客戶體驗。

A highlight of our fall product launch is the Astor Collection, which builds on our leadership and reeded design and commitment to artisan craftsmanship. This collection combines globally sourced materials and sophisticated elements, making each piece both functional and beautiful. Crafted from solid oak with natural stone tops, the Astor Collection features beautiful brown espresso marble, chosen for its rich tone and stunning movement.

我們秋季產品發布的一大亮點是 Astor 系列，它建立在我們的領導地位、精心設計以及對工匠工藝的承諾之上。該系列結合了全球採購的材料和精緻的元素，使每件作品既實用又美觀。Astor 系列採用實心橡木和天然石材桌面製成，採用美麗的棕色濃縮咖啡大理石，因其豐富的色調和令人驚嘆的動態而被選擇。

Our fall launch also includes elegant, curved upholstery selections and unique collectible pieces that can define a home. Moving to our quarterly performance. In the third quarter, we delivered a net revenue of $319 million, net income of $10 million and adjusted EBITDA of $23 million. During the quarter, we experienced a decline in demand, comparable growth of 11.3%.

我們在秋季推出的產品還包括優雅的弧形內裝選擇和可以定義家居的獨特收藏品。轉向我們的季度業績。第三季度，我們的淨收入為 3.19 億美元，淨利潤為 1,000 萬美元，調整後 EBITDA 為 2,300 萬美元。本季度，我們經歷了需求下降，可比成長 11.3%。

However, demand trends improved meaningfully as the quarter progressed. In September, we recorded a low-single-digit decline in demand comparable growth following high-teens and mid-teens declined in July and August respectively.

然而，隨著本季的進展，需求趨勢顯著改善。繼 7 月和 8 月分別出現高位和中位數下降之後，9 月需求可比成長率低個位數下降。

Notably, September set a new record as the biggest total demand month in the Arhaus history of 10% compared to last year's strong comparable period. This performance was supported by our annual store-wide sale held each January and September to coincide with our spring and fall launches. This promotion was well-received by clients and we continue to leverage our Arhaus marketing campaigns to drive engagement around these key launches.

值得注意的是，9 月創下了 Arhaus 歷史上最大總需求月份的新紀錄，與去年的強勁可比時期相比，增長了 10%。這項業績得益於我們每年一月和九月舉行的年度全店促銷，以配合我們的春季和秋季新品發布。此次促銷活動受到了客戶的好評，我們將繼續利用 Arhaus 行銷活動來推動圍繞這些重要發布的參與度。

In October, our demand comparable growth declined in the low-single digits as the consumer environment remains pressured. However, total demand was up nearly double digits as our brand continues to resonate with clients despite ongoing macro pressures.

10 月份，由於消費環境仍面臨壓力，我們的需求可比成長率下降至低個位數。然而，儘管宏觀壓力持續存在，但由於我們的品牌繼續與客戶產生共鳴，總需求增加了近兩位數。

While demand trends improved over the course of the third quarter, we're lowering our full-year sales and earnings outlook to reflect the continued tempered consumer environment, which we believe is temporary given our innovative product offerings and compelling marketing campaigns. Dawn will discuss the details later on the call.

雖然第三季的需求趨勢有所改善，但我們下調了全年銷售和盈利預期，以反映持續緩和的消費者環境，鑑於我們的創新產品和引人注目的營銷活動，我們認為這是暫時的。黎明將在稍後的電話會議上討論細節。

Despite these headwinds, we remain fully committed to our long-term growth strategy and the fundamentals of our business. Our key growth drivers include first, enhancing and elevating our product assortment which is essential for exceeding client expectations and reinforcing our leadership in premium artisan-crafted home furnishings.

儘管面臨這些不利因素，我們仍然完全致力於我們的長期成長策略和業務基本面。我們的主要成長動力包括，首先，增強和提升我們的產品種類，這對於超越客戶期望和鞏固我們在優質手工家居裝飾領域的領導地位至關重要。

Second, expanding our showroom base to bring the Arhaus experience to more clients in key markets. Third, increasing our brand awareness, which will deepen our relationships with both new and existing clients. And finally, we are making strategic investments to upgrade our infrastructure and improve our business tools, ensuring we have a strong foundation to support our long-term growth.

其次，擴大我們的陳列室基礎，將 Arhaus 的經驗帶給主要市場的更多客戶。第三，提高我們的品牌知名度，這將加深我們與新舊客戶的關係。最後，我們正在進行策略性投資，以升級我們的基礎設施並改善我們的業務工具，確保我們擁有堅實的基礎來支持我們的長期成長。

Turning to our showrooms, we are on track to meet the high end of our 2024 showroom opening goals with 10 new showrooms already opened this year and an additional opening tomorrow in Corte Madera, California. The Corte Madera showroom will be our 14th location in California as part of our ongoing West Coast expansion.

談到我們的展廳，我們預計將實現 2024 年展廳開幕目標的高端目標，今年已開設 10 個新展廳，明天還將在加州科爾特馬德拉開設一個新展廳。Corte Madera 展廳將成為我們在加州的第 14 個展廳，作為我們正在進行的西海岸擴張的一部分。

This year, we expect to open five new traditional showrooms, bringing our total to 85 traditional showrooms at the end of the year, just halfway to our target of 165 traditional showrooms. In addition, we opened three new design studios, three Arhaus loft locations this year. As I mentioned in past calls, we continue to be pleased with our performance and economics of our new showrooms in all formats. We're proud to have grown our total showroom count to now 103 as of tomorrow.

今年，我們預計將開設 5 個新的傳統展廳，到年底我們的傳統展廳總數將達到 85 個，僅達到 165 個傳統展廳目標的一半。此外，我們今年還開設了三個新的設計工作室、三個 Arhaus loft 地點。正如我在過去的電話中提到的，我們仍然對各種形式的新展廳的性能和經濟效益感到滿意。我們很自豪截至明天我們的陳列室總數已增至 103 個。

Moving to product, we believe Arhaus leads the industry in setting design trends, often seeing them before they emerge. As I mentioned earlier, we're excited about the new Fall collection which launched in the third quarter. We encourage you to experience the design quality and aesthetic appeal of our furnishings and decor, whether in our showrooms or on our website, or looking at our catalogs.

轉向產品，我們相信 Arhaus 在引領設計趨勢方面處於行業領先地位，經常在它們出現之前就看到它們。正如我之前提到的，我們對第三季推出的全新秋季系列感到興奮。我們鼓勵您體驗我們的家具和裝飾的設計品質和美學吸引力，無論是在我們的陳列室、我們的網站上，還是查看我們的目錄。

And we're already hard at work on the upcoming spring launch just two months away. Notably, highlights include expanding our motions selection within the upholstery collections. We've been in the motion business for some time now and we're thrilled to see the continued growth of our merchandise as (inaudible) with these offerings.

我們已經在為兩個月後即將到來的春季發布而努力工作。值得注意的是，亮點包括擴大我們在室內裝飾系列中的運動選擇。我們從事運動業務已經有一段時間了，我們很高興看到我們的產品隨著這些產品（聽不清楚）的持續成長。

Additionally, we're introducing exotic wood collections across bedroom, wall, dining, adding distinctive character and riches to our product line. On the strategic investment front, as we previously communicated, we are setting the foundations for our long-term growth by improving operational efficiencies with upgraded infrastructure, technology, and processes.

此外，我們還在臥室、牆壁、餐廳引入異國情調的木材系列，為我們的產品線增添了獨特的個性和豐富性。在策略投資方面，正如我們之前所傳達的，我們正在透過升級基礎設施、技術和流程來提高營運效率，為我們的長期成長奠定基礎。

We are pleased to have implemented our new warehouse management system and are now focusing on the design and build phases of our new planning system and the new ERP at our upholstery manufacturing facility. We expect these systems to be implemented in 2025.

我們很高興實施了新的倉庫管理系統，現在專注於我們的室內裝飾製造工廠的新規劃系統和新 ERP 的設計和建造階段。我們預計這些系統將於 2025 年實施。

As a reminder, the planning system will help optimize our inventory purchases and forecasting capabilities. And the new ERP at our upholstery factory facility will improve margin visibility and production capabilities. Before I turn over to Dawn to discuss our financial results and outlook for the remainder of 2024, I wanted to, again, thank the Arhaus team for their hard work and dedication.

提醒一下，規劃系統將有助於優化我們的庫存採購和預測能力。我們的室內裝飾工廠的新 ERP 將提高利潤可視性和生產能力。在我向 Dawn 討論我們的財務表現和 2024 年剩餘時間的前景之前，我想再次感謝 Arhaus 團隊的辛勤工作和奉獻精神。

Our long-term success is driven by our team's dedication to delivering the best products and inspiring showroom experience. Their ongoing commitment highlights the resilience of our growth strategy and our commitment to creating value for our shareholders. Over to you. Dawn.

我們的長期成功得益於團隊致力於提供最好的產品和鼓舞人心的展廳體驗。他們的持續承諾凸顯了我們成長策略的彈性以及我們為股東創造價值的承諾。交給你了。黎明。

Thank you and good morning. Net revenue in the third quarter was $319 million with a 9.2% comp decline. The decrease in net revenue compared to the prior year was primarily related to the non-recurrence of prior-year abnormal backlog deliveries and lower total demand in the quarter.

謝謝你，早安。第三季淨收入為 3.19 億美元，年減 9.2%。淨收入較上年下降的主要原因是去年異常積壓交貨不再發生以及本季總需求下降。

As John mentioned earlier, our demand comp declined 11.3% in the quarter, with September's demand comp improving meaningfully to decline low-single digits from July's high-teen and August's mid-teen declines.

正如約翰之前提到的，我們的需求比較在本季度下降了11.3%，其中9 月份的需求比較顯著改善，與7 月的高位和8 月的中位數下降相比，下降了低個位數。

Our third-quarter gross margin decreased to $123 million, driven primarily by lower net revenue and higher showroom costs as we continue to expand our footprint. Gross margin as a percent of net revenue, decreased to 38.6%, driven primarily by higher showroom costs, higher delivery and transportation costs, and deleverage on lower net revenue.

我們第三季的毛利率下降至 1.23 億美元，主要是由於我們繼續擴大業務範圍，導致淨收入下降和展廳成本上升。毛利率佔淨收入的百分比下降至 38.6%，這主要是由於陳列室成本上升、交付和運輸成本上升以及淨收入下降的去槓桿化所致。

Third-quarter SG&A expense increased $5 million to $112 million, primarily driven by legal costs, marketing investments, and strategic investments to support and drive the growth of the business including supply chain and technology improvements. This was partially offset by the non-recurrence of last year's donation to the Nature Conservancy.

第三季的銷售、管理及行政費用增加了 500 萬美元，達到 1.12 億美元，這主要是由法律成本、行銷投資以及支持和推動業務成長（包括供應鏈和技術改進）的策略性投資所推動的。去年不再向大自然保護協會捐款，部分抵銷了這項影響。

Third-quarter 2024 net income was $10 million. Adjusted EBITA in the quarter was $23 million versus $34 million in the third quarter of 2023. Third-quarter net revenue of $319 million and adjusted EBITDA of $23 million resulted in a 7.2% adjusted EBITDA margin in the quarter.

2024 年第三季淨利為 1,000 萬美元。本季調整後 EBITA 為 2,300 萬美元，而 2023 年第三季為 3,400 萬美元。第三季淨收入為 3.19 億美元，調整後 EBITDA 為 2,300 萬美元，調整後 EBITDA 利潤率為 7.2%。

As we reported this morning, we are lowering our full-year outlook for 2024. As a reminder, we experienced softening demand comps starting in May with the negative trend accelerating into July and August. In September, we experienced sequential improvement with the demand comp decline in the low-single digits as clients responded well to our product assortment, marketing, and planned promotions.

正如我們今天早上報導的那樣，我們下調了 2024 年全年預期。提醒一下，我們從 5 月開始經歷了需求疲軟，負面趨勢加速到 7 月和 8 月。9 月份，由於客戶對我們的產品分類、行銷和計劃的促銷活動反應良好，我們的需求同比下降幅度為低個位數，我們經歷了環比改善。

As we mentioned last quarter, we believe the softer demand comps we're experiencing are a reflection of the continued pullback by the home furnishings consumer that is now starting to impact our business as well as the lapping of strong demand from last year related to the price action SKUs in the second half of 2023.

正如我們上個季度提到的，我們認為我們所經歷的需求比較疲軟反映了家居用品消費者的持續回落，這現在開始影響我們的業務，以及與去年相關的強勁需求的消失。的價格行動SKU。

For the year, we now expect net revenue in the range of $1.23 billion to $1.25 billion and adjusted EBITDA in the range of $115 million to $125 million. As the midpoint of our range implies, we expect net revenue to decline approximately 4% for the year as we lap the delivery of $75 million in abnormal backlog that occurred in 2023, and we expect a negative demand comp for the year.

我們目前預計今年的淨收入將在 12.3 億美元至 12.5 億美元之間，調整後的 EBITDA 將在 1.15 億美元至 1.25 億美元之間。正如我們範圍的中點所暗示的那樣，我們預計今年的淨收入將下降約 4%，因為我們完成了 2023 年發生的 7500 萬美元的異常積壓交付，並且我們預計今年的需求補償為負。

In the fourth quarter of 2024, we anticipate net revenue in the range of $306 million to $326 million and adjusted EBITDA in the range of $23 million to $33 million. Our outlook contemplates a low-double-digit demand comp decline for the first fourth quarter. We remain focused on current demand trends and gross margin and our outlook allows for continued flexibility around promotions for the balance of the year.

2024 年第四季度，我們預計淨收入在 3.06 億美元至 3.26 億美元之間，調整後 EBITDA 在 2,300 萬美元至 3,300 萬美元之間。我們的預期是第四季的需求複合下降幅度為兩位數。我們仍然關注當前的需求趨勢和毛利率，我們的前景允許在今年剩餘的時間裡繼續靈活地進行促銷活動。

We previously communicated the expectation to invest $10 million to $15 million in strategic investments this year. We now expect to invest approximately $10 million in strategic investments in 2024 with about 80% in SG&A and 20% in gross margin. These initiatives include investments in systems, e-commerce, client experience, and other corporate investments to support and drive the growth of the business.

我們先前曾表示，預計今年將投資 1,000 萬至 1,500 萬美元進行策略性投資。我們現在預計在 2024 年投資約 1,000 萬美元的策略投資，其中約 80% 用於 SG&A，20% 用於毛利率。這些舉措包括對系統、電子商務、客戶體驗和其他企業投資的投資，以支持和推動業務成長。

In 2025, we expect to spend approximately $15 million to $20 million in strategic investments, including the subscription fees for system enhancements deployed in 2024. For all other details related to our 2024 outlook, please refer to our press release.

到 2025 年，我們預計將花費約 1,500 萬至 2,000 萬美元的策略投資，包括 2024 年部署的系統增強功能的訂閱費。有關 2024 年展望的所有其他詳細信息，請參閱我們的新聞稿。

In closing, I want to reiterate our strong commitment to our growth strategy. Despite the current macro challenges, our debt-free balance sheet is a meaningful competitive advantage that allows us to make the responsible investments to build on our share gains in the highly fragmented $100 billion premium home furniture market.

最後，我想重申我們對成長策略的堅定承諾。儘管面臨當前的宏觀挑戰，我們的無債資產負債表仍是一項有意義的競爭優勢，使我們能夠進行負責任的投資，以擴大我們在高度分散的1000 億美元高端家具市場中的份額收益。

We continue to navigate the current environment from a position of strength, and we believe we are well-positioned to maintain our client-first service and drive value for all stakeholders.

我們繼續以優勢地位應對當前環境，我們相信我們有能力維持客戶至上的服務並為所有利害關係人創造價值。

This concludes our prepared remarks. With that, I'd like to thank you for joining us this morning and we are happy to take your questions.

我們準備好的演講到此結束。在此，我要感謝您今天早上加入我們，我們很高興回答您的問題。

(Operator Instructions) Steven Forbes, Guggenheim Securities.

（操作員指令）史蒂文·福布斯，古根漢證券。

Good morning, John, Dawn.

早安，約翰，黎明。

Good morning, Steve.

早安，史蒂夫。

Maybe just to start in the showroom -- yeah, thanks, John. To start with the new showroom performance. Curious if you expand on how the more recent store [cohorts], right? In 2022, 2023, and 2024, store cohorts are performing relative to the internal performance model. And how the current environment or performance of those stores are impacting your 2025 real estate plans?

也許只是從陳列室開始——是的，謝謝約翰。首先從新展廳的表演開始。您是否好奇如何擴展最近的商店[同類]，對吧？2022 年、2023 年和 2024 年，商店群體的表現與內部績效模式相關。這些商店的當前環境或業績如何影響您的 2025 年房地產計劃？

Sure. Yeah, we've been thrilled with the new stores. They have opened very solid, they seem to be growing. Some of them -- super home runs that really surprised us. Other ones have been very steady, right on projections. So yeah, we're happy with that. And as far as looking into the future, we're sticking with our plan.

當然。是的，我們對新商店感到很興奮。它們已經非常堅固地打開了，它們似乎正在成長。其中一些——超級本壘打確實讓我們感到驚訝。其他的則非常穩定，符合預測。所以，是的，我們對此感到滿意。就展望未來而言，我們將堅持我們的計劃。

We've got a lot of runway to do a lot of great real estate we're working on currently and not only are we doing a lot of -- looking at new locations and so forth, but we're also going back and moving existing stores that maybe have been -- become dated and so forth into better, bigger locations.

我們有很多的跑道可以做很多我們目前正在做的很棒的房地產，我們不僅做了很多——尋找新的地點等等，而且我們也會回去並搬遷現有的商店可能已經過時了，等等，搬到更好、更大的地方。

As a matter of fact, we're opening one of those tomorrow as well in Fairfax, Virginia, a store we've had for, gosh, 15 years or so in a location. We're moving it to a free-standing building, two stories, it's absolutely stunning. I just sorted it yesterday and it's going to be a huge, huge success. So we like doing both, keeping our current format very, very fresh. So a relevant, cutting edge and then looking at all the new locations around the country that we're very excited about as well.

事實上，我們明天還將在弗吉尼亞州費爾法克斯開設其中一家商店，天哪，我們在這個地方已經開了 15 年左右的商店了。我們要把它搬到一棟獨立的兩層樓建築裡，它絕對令人驚嘆。我昨天剛整理了它，這將是一個巨大的成功。所以我們喜歡兩者兼顧，保持我們目前的格式非常非常新鮮。因此，這是一個相關的、前沿的，然後看看全國各地的所有新地點，我們也對此感到非常興奮。

Appreciate that. And then, maybe just a quick follow-up for Dawn. The $15 million to $25 million of strategic investment spend for next year, is that in addition to the $10 million? So you have $15 million, $25 million on top of $10 million. So a run rate of [25% and 35%] or is that -- so should we look at that sort of as a more of an increment of [5% to 15%]?

很欣賞這一點。然後，也許只是黎明的快速後續行動。明年的 1,500 萬至 2,500 萬美元戰略投資支出是在 1,000 萬美元之外嗎？所以你有 1500 萬美元，除了 1000 萬美元之外還有 2500 萬美元。因此，[25% 和 35%] 的運行率或是——所以我們應該將其視為更多的增量[5% 到 15%]？

Great question, Steve. So it is -- the total strategic investment spend for next year will be $15 million to $20 million. So not incremental to the $10 million that is being spent in 2024. So we try to provide a comprehensive number for modeling purposes, really.

好問題，史蒂夫。確實如此——明年的戰略投資總額將為 1500 萬至 2000 萬美元。因此，2024 年支出的 1,000 萬美元不會增加。因此，我們確實嘗試提供一個全面的數字用於建模目的。

Appreciate that clarity. Thank you.

欣賞這種清晰度。謝謝。

You're welcome.

不客氣。

Jeremy Hamblin, Craig-Hallum.

傑里米·漢布林，克雷格·哈勒姆。

Thanks for taking the questions and just a quick follow-up in terms of thinking about the kind of the investments that are being made and the systems changes. I wanted to get a better sense of the timing of each of the different systems, components, that you're going to be touching here both FY25 into FY26?

感謝您提出問題，並快速跟進思考正在進行的投資類型和系統變化。我想更了解您將在 2025 財年到 2026 財年涉及的每個不同系統、組件的時間安排？

And then, in terms of -- I wasn't sure if it was $15 million to $25 million or $15 million to $20 million of spend, and how much of that was really kind of staffing requirements that you need or your support teams versus kind of the software, licensing fees, and et cetera?

然後，我不確定是 1500 萬到 2500 萬美元還是 1500 萬到 2000 萬美元的支出，以及其中有多少是您真正需要的人員配置要求或您的支援團隊與其他類型的人員配置要求軟體、許可費等等？

Yeah, great question. So lots of moving pieces here. I'll try to answer all of them, but certainly, let me know if I missed something. So with the planning software, that is well underway with the build portion, we are anticipating that will launch in the first half of next year. That is the same timing that we would anticipate for the manufacturing ERP, it's sometime in the first half.

是的，很好的問題。這裡有很多動人的部分。我會盡力回答所有問題，但當然，如果我遺漏了什麼，請告訴我。因此，規劃軟體的建置部分正在順利進行，我們預計將在明年上半年推出。這與我們對製造業 ERP 的預期時間相同，是在上半年的某個時間點。

For the other system, the two other systems that we've talked about for next year are the financial platform and the order management system. And those two are very broad, we want to make sure we're doing those correctly. So it takes some time, those will not be deployed next year. But they will likely be kicked off launch next year. And those are the systems that we are incorporating into the $15 million to $20 million. So it's $15 million to $20 million, not $15 million to $25 million for next year.

對於另一個系統，我們明年討論的另外兩個系統是財務平台和訂單管理系統。這兩個非常廣泛，我們希望確保我們正確地執行這些操作。所以這需要一些時間，明年不會部署。但它們可能會在明年啟動。這些就是我們將納入 1500 萬至 2000 萬美元的系統。所以明年的預算是 1500 萬到 2000 萬美元，而不是 1500 萬到 2500 萬美元。

And then, as it pertains to the split between subscription fees, implementation costs, and personnel, those are largely still being flushed out. We have not yet selected new vendors. We are actively in the process of working through what that could look like. So we need a little bit more time. We think, in the numbers that we've included here that we're targeting for next year, we think that we have a good handle on the different pieces as they could range and flex, but nothing is kind of nailed down.

然後，由於涉及訂閱費、實施成本和人員之間的分配，這些很大程度上仍在被淘汰。我們尚未選擇新的供應商。我們正在積極解決可能出現的問題。所以我們需要多一點時間。我們認為，在我們在這裡列出的明年目標數字中，我們認為我們對不同的部分有很好的處理，因為它們可以變化和彎曲，但沒有什麼是確定的。

And then if you think about, something like the OMS and the financial platform, there will be longer term efficiencies. So once those are deployed, we'll have operational efficiencies like we have process efficiencies, especially with the financial platform that might make us able to streamline headcount over time.

然後，如果你想一想，像 OMS 和金融平台這樣的東西，將會有更長期的效率。因此，一旦部署了這些，我們將獲得像流程效率一樣的營運效率，尤其是財務平台，它可能使我們能夠隨著時間的推移簡化員工人數。

So all of that will be flushed out but it takes a little bit longer than just 12 months to determine those. Did I capture everything?

因此，所有這些都將被清除，但確定這些需要的時間比 12 個月要長一些。我捕捉到了一切嗎？

Yeah, great color. I had one additional question that I wanted to hit on. In terms of the kind of the pricing presentation and coming back to demand trends. September, in terms of online and even in stores, the presentation looked a bit more like kind of traditional Arhaus over the last few years as the company kind of migrated away from pricing presentation to look like things are on sale all the time.

是的，顏色很棒。我還有一個想問的問題。就定價演示的類型和回到需求趨勢而言。9 月，就在線甚至商店而言，展示看起來更像是過去幾年中傳統的 Arhaus，因為該公司從定價展示轉向看起來一直在打折。

Is there any kind of linkage to September? You saw a pretty notable improvement in your demand trends, you're running your kind of typical September promo in which you had percentage off store-wide and online. Is there any kind of linkage to where you've seen degradation and in overall demand comps? That's kind of based on that presentation, and is there any thought to potentially going back to how it was before?

和九月有什麼聯繫嗎？您看到需求趨勢有了相當顯著的改善，您正在進行典型的 9 月促銷活動，其中全店和網上都有折扣。您所看到的退化情況和整體需求比較之間是否有任何關聯？這是基於那個簡報的，有沒有想過可能回到以前的樣子？

Yeah. Hi, good morning. Great questions. Yeah, and as you noted, the presentation of our pricing, at least this year we shifted to that more consistent pricing and that's really reflective of our stance on how we price products and really wanting to reflect the value of our products to our clients. I think it's a great question about September.

是的。嗨，早安。很好的問題。是的，正如您所指出的，我們定價的呈現，至少今年我們轉向了更一致的定價，這確實反映了我們對產品定價的立場，以及真正希望向客戶反映我們產品的價值。我認為這是一個關於九月的好問題。

So September, it was reflective of our biannual store like sale promotion, that comes last year, that comes really, the last 5 to 10 years strategy that we do in terms of doing that twice a year in spring and in the fall time. And we were really pleased with the improvement in comp in September. I think what's interesting, I was looking at the low-single-digit comp, negative comp in October as well. So that wasn't an isolated trend shift that we saw in September and then saw deceleration going in October.

所以九月，它反映了我們去年進行的一年兩次的商店促銷活動，這實際上是我們過去 5 到 10 年的策略，我們每年在春季和秋季進行兩次促銷。我們對 9 月份的薪酬改善感到非常滿意。我認為有趣的是，我也在關注 10 月的低個位數補償、負補償。因此，這並不是我們在 9 月看到然後在 10 月看到減速的孤立趨勢轉變。

We're seeing that similar trends continue into October where we have come off of that September promotion with our new strategies. Pricing is something that we always are paying close attention to. We've spoken a lot before about how our pricing strategy is built to reflect that product. We build and create and design a product that will be high-quality, beautiful, works of art and a quality that can last a very long time for our clients, and then we price it accordingly.

我們看到類似的趨勢持續到十月份，我們已經結束了九月份的促銷活動並推出了新策略。定價是我們一直密切關注的事情。我們之前已經談過很多關於我們的定價策略是如何制定來反映該產品的。我們為客戶打造、創造和設計一款高品質、美觀、藝術品和可以持續很長時間的產品，然後我們相應地定價。

We're not price-engineering our product, we're not reactive in our pricing strategies with what's going on in the market. So we think very carefully about that. And we're happy with what we're doing right now, but we are paying very close attention and are constantly evolving that strategy.

我們不會對我們的產品進行價格設計，我們的定價策略不會根據市場情況做出反應。所以我們非常仔細地考慮這一點。我們對現在所做的事情感到滿意，但我們正在密切關注並不斷發展該策略。

Great. Thanks for the color. Best wishes.

偉大的。謝謝你的顏色。最好的祝愿。

Robby Ohmes, Bank of America.

羅比·歐姆斯，美國銀行。

Good morning. Thanks for taking my questions. Two questions, a quick one. Just -- inventory growth, I think was a little bit higher than we were expecting in the quarter. Just some update on how we should think inventories will trend into -- through the fourth quarter here? And my second question is just any -- I don't know, Dawn, if you could give us any further puts and takes on how we should think about gross margin for the fourth quarter in 2025?

早安.感謝您回答我的問題。兩個問題，快問一個。我認為庫存成長略高於我們本季的預期。只是關於我們應該如何看待第四季度庫存趨勢的一些更新？我的第二個問題是——我不知道，Dawn，您能否就我們應如何考慮 2025 年第四季的毛利率提供進一步的建議？

Yeah, I can take the inventory question, Robby. That's been my direction. We've had on some amazing collections of product that are outselling the pace of our company and surprising us. And growing on a lot of new things, as I mentioned, we're launching some incredible new product coming out end of this year and into the spring.

是的，我可以回答庫存問題，羅比。這就是我的方向。我們擁有一些令人驚嘆的產品系列，它們的銷量超過了我們公司的步伐，讓我們感到驚訝。正如我所提到的，我們在許多新事物上不斷發展，我們將在今年年底和春季推出一些令人難以置信的新產品。

So I wanted to A, get back in stock on things, because we were still living up -- playing catch-up with some products just because it surprised us so much how much it was selling. So our partners had to hire people at facilities and so forth. So everybody is in line to grow with us now. We're thrilled with what everybody's done for us and, we're ready to grow.

所以我想要A，重新獲得庫存，因為我們仍然在追趕一些產品，只是因為它的銷售讓我們感到驚訝。因此，我們的合作夥伴必須在設施等方面僱用人員。所以現在每個人都願意與我們一起成長。我們對每個人為我們所做的一切感到興奮，我們已經準備好成長。

So I wanted to get some more inventory. So A, we're in stock on almost everything; and B, we can really fund these best-selling new collections that are really going to propel us into 2025.

所以我想多買一些庫存。所以 A，我們幾乎所有商品都有庫存； B，我們確實可以資助這些最暢銷的新系列，它們確實將推動我們進入 2025 年。

Great. And then, on the gross margin question. So while we don't guide to gross margin, I think there's a couple of things that will be really helpful for you as you're thinking about your models and as we're thinking about the fourth quarter. I would encourage you to remember we had $75 million of abnormal backlog last year and keep in mind, the second half was heavier with those than the first half and the fourth quarter was heavier than the third quarter.

偉大的。然後，關於毛利率問題。因此，雖然我們不提供毛利率指導，但我認為當您考慮您的模型以及我們考慮第四季度時，有幾件事會對您真正有幫助。我鼓勵您記住，去年我們有 7500 萬美元的異常積壓，並記住，下半年的積壓量比上半年多，第四季度的積壓量比第三季度多。

So we are lapping toughest quarter from just a revenue flowthrough perspective related to the abnormal backlog. So you're going to see some deleverage related to that. Steve asked the question earlier on the new showroom and for 2025. And so, just keep in mind that most of those are already under construction, we've started those, we've taken possession. So expenses such as rent and things like that, these are already flowing through the P&L and you'll see additional compression in gross margin related to those in the fourth quarter.

因此，僅從與異常積壓相關的收入流量角度來看，我們正在經歷最艱難的季度。所以你會看到一些與此相關的去槓桿化。史蒂夫早些時候就新展廳和 2025 年提出了這個問題。因此，請記住，其中大部分已經在建設中，我們已經開始建設，我們已經擁有了。因此，諸如租金之類的費用已經流經損益表，您將看到與第四季度相關的毛利率進一步壓縮。

So those are some of the kind of key callouts I would take. We're feeling really good about the actual product margin relative to prior year and how we're -- as Jen mentioned, as we're talking about the promotional cadence. And so, more to come on 2025. We will likely give guidance when we report fourth quarter versus now.

這些是我會採取的一些關鍵標註。正如 Jen 所提到的，當我們談論促銷節奏時，我們對去年相比的實際產品利潤率以及我們的情況感到非常滿意。因此，2025 年還會有更多內容。當我們報告第四季度與現在的情況時，我們可能會給予指引。

Terrific. Thank you.

了不起。謝謝。

Jonathan Matuszewski, Jeffries.

喬納森·馬圖謝夫斯基，傑弗里斯。

Hey, good morning and thanks for taking my questions. The first one was just on demand complexion. Can you help us understand how that trended throughout 3Q, maybe relative to the first half? I'm thinking of things maybe like traffic conversion, AOV. Any insights would be helpful.

嘿，早上好，感謝您回答我的問題。第一個只是按需膚色。您能否幫助我們了解整個第三季的趨勢（也許相對於上半年）？我正在考慮諸如流量轉換、AOV 之類的事情。任何見解都會有幫助。

Yeah. So metrics across the board have been choppy this year. So we're actively tracking those, we're paying close attention. We're trying to slice and dice the data about 50 different ways, much like you guys are to understand what's happening with the underlying consumer. And interestingly, in the third quarter, while comp traffic was down, comp transactions were down, we did see really nice response in the average order, units per transaction were up nicely as well.

是的。因此，今年的全面指標一直不穩定。所以我們正在積極跟踪這些，我們正在密切關注。我們正在嘗試以大約 50 種不同的方式對資料進行切片和切塊，就像你們了解潛在消費者正在發生的事情一樣。有趣的是，在第三季度，雖然競爭流量下降，競爭交易量下降，但我們確實看到平均訂單的反應非常好，每筆交易的單位也很好地增加了。

And then, we've mentioned in the past, those orders that are over $5,000 and over $10,000. And what was interesting in the third quarter is that we did see those decline year over year. However, the penetration of those orders relative to total increased. So seeing those higher value customers decelerating like the total consumer base did, but at a slower rate. So interesting and giving us some good feedback and feelings about the product assortment of marketing and as we kind of enter the last few months of the year.

然後，我們過去提到過，那些超過 5,000 美元和超過 10,000 美元的訂單。第三季有趣的是，我們確實看到了同比下降。然而，這些訂單相對於總訂單的滲透率有所增加。因此，看到那些高價值客戶像總消費者群一樣減速，但速度較慢。非常有趣，當我們進入今年的最後幾個月時，給我們提供了一些關於行銷產品分類的良好反饋和感受。

That's really helpful. And then just my second question, if you could update us on the source of exposure to China, and the extent to which maybe reliance on the US and Indonesia and Vietnam may have changed since you went public? And if we do see higher tariffs, maybe what percentage of your COGS is tied to product spend? Thanks so much.

這真的很有幫助。接下來是我的第二個問題，您是否可以向我們介紹對中國的風險敞口來源的最新情況，以及自您上市以來對美國、印尼和越南的依賴程度可能發生了變化？如果我們確實看到更高的關稅，那麼您的銷貨成本中有多少百分比與產品支出相關？非常感謝。

Sure. As you know, we've all been waiting for this election and now we know who's in. So we have been working on this for two years, three years now, moving things out of China. China never was a very large country for us, relatively small basis. As you guys all know, we manufacture our own upholstery here in the United States, which is the biggest part of our business. And we get things from all over the globe and truly, probably more than -- certainly more than our competitors do, various countries all over.

當然。如你所知，我們一直在等待這次選舉，現在我們知道誰參加了。所以我們已經為此努力了兩年，現在已經三年了，把東西移出中國。中國對我們來說從來都不是一個很大的國家，基礎相對較小。眾所周知，我們在美國生產自己的室內裝飾，這是我們業務的最大組成部分。我們從全球各地獲得東西，而且確實可能比我們的競爭對手、各國更多。

But the things that were left in China, I'm very happy to please any of our major vendors that we're doing any kind of significant business with there have all migrated out of China, Mexico, Vietnam, Cambodia. Even over the Europe, Eastern Europe. So they've been working on this, we've had a team of people working on this now for a couple of years. Anticipating this may happen, so we're in great shape.

但是，我很高興地取悅我們與那裡開展任何重要業務的任何主要供應商，留在中國的東西都已從中國、墨西哥、越南、柬埔寨遷移出去。甚至在歐洲、東歐。所以他們一直在研究這個問題，我們已經有一個團隊在這方面工作了幾年。預計這可能會發生，所以我們的狀態很好。

Thank you.

謝謝。

Simeon Gutman, Morgan Stanley.

西蒙古特曼，摩根士丹利。

Hi, this is [Lauren] on for Simeon. I guess our first question is, are you satisfied with demand comp trends in light of the promotions you're running? Does it show that maybe the customer is weaker, competition is more intense or may maybe something else? Thank you.

大家好，我是西蒙的[勞倫]。我想我們的第一個問題是，根據您正在進行的促銷活動，您對需求比較趨勢是否滿意？這是否表示客戶可能更弱、競爭更激烈或可能有其他原因？謝謝。

Good morning. You know, are we satisfied with this (inaudible) contract? No. Obviously, we want it to be better. It's been a really choppy, interesting market. A lot of the furnish industry has been dealing with what's going on in the macro for longer than we have. We've obviously been seeing a really choppy year here in terms of our demand. We all want (inaudible) we're working for that to get better and we believe a lot of the macro is temporary.

早安.你知道，我們對這份（聽不清楚）合約滿意嗎？不。顯然，我們希望它變得更好。這是一個非常動盪、有趣的市場。許多家具業處理宏觀形勢的時間比我們更長。就需求而言，我們顯然經歷了非常波動的一年。我們都希望（聽不清楚）我們正在努力讓情況變得更好，我們相信很多宏觀因素都是暫時的。

We have a lot of conversations around interest rates, what it's doing on the housing market of -- the election was earlier this week and there was a lot of noise leading into that. So we are really confident in what we are doing in our business and our strategies, how we are monitoring all of our stats. In terms of promotions and what's going on in the market, it continues to be an elevated promotional activity.

我們圍繞利率、利率對房地產市場的影響進行了很多討論——本週早些時候舉行了選舉，對此產生了很多噪音。因此，我們對我們的業務和策略以及我們如何監控所有統計數據非常有信心。就促銷活動和市場情況而言，促銷活動仍然較高。

I'll see through everything that's going on. We run promotions as, you know, our overall strategy and approach to promotions has remained pretty consistent. We have the [lengthening] promotions in certain cases as we've spoken about on prior calls and we're constantly evaluating that and have that as a lever to continue going into Q4 and then next year.

我會看清正在發生的一切。您知道，我們進行促銷活動的整體策略和促銷方法保持相當一致。正如我們在之前的電話中談到的那樣，我們在某些​​情況下會[延長]促銷活動，我們會不斷評估這一點，並將其作為繼續進入第四季度和明年的槓桿。

But simple answer is if we're happy? The answer is no. But looking forward to the future.

但簡單的答案是我們是否快樂？答案是否定的。但對未來充滿期待。

Yeah, and just to add to that. We have an incredible lineup for 2025 in marketing and new products, new stores that are all just hitting on the red cylinders. And we've had a little stumble this quarter. I think the last time we had a stumble was 2020 -- 2016. So was that eight years ago or so? So we've had a huge run, credible run.

是的，只是補充一下。2025 年，我們在行銷和新產品、新商店方面擁有令人難以置信的陣容，這些都剛剛出現在紅色圓柱體上。本季我們遇到了一些挫折。我想我們上次遇到挫折是2020年──2016年。那是八年前左右嗎？所以我們已經進行了一次大規模、可信的運行。

Our comps compared to our competitors were way up the last few years. If you look at our three-year conference -- our stock conference so forth, we are incredibly doing unbelievable. And so yeah, we had a little bit of stumble here, but we have all kinds of plans to get out of that and we think it's going to be great.

與競爭對手相比，我們的比較在過去幾年中大幅提高。如果你看看我們的三年期會議——我們的股票會議等等，我們的表現令人難以置信。是的，我們在這裡遇到了一些挫折，但我們有各種計劃來擺脫困境，我們認為這會很棒。

We love that the election is over. Hopefully the housing market, we'll start hearing some better news on that going into next year. I know the interest rates continue to fall. So we're happy, very excited about our future.

我們很高興選舉已經結束。希望房地產市場，我們將在明年開始聽到一些更好的消息。我知道利率繼續下降。所以我們對我們的未來感到高興和興奮。

Great, that's helpful. And then my follow-up is just on the competitive landscape. It seems that you have a large competitor who is driving a lot of product newness and catalog intensity this year. Could you comment if you've seen any maybe overlap or in general what you're seeing in the market share versus the industry? Thank you.

太好了，很有幫助。然後我的後續行動只是關於競爭格局。看來你有一個很大的競爭對手，他今年推動了許多產品的新穎性和目錄強度。如果您看到任何可能的重疊或總體上您在市場份額與行業中看到的情況，您能否發表評論？謝謝。

Yeah, I mean, our products, our best sellers, our designs are doing incredible as such as the new products. I got flattered that some of our competition has been copying us more and more. But that's part of the competition. Everybody does that. So we don't see any effect whatsoever with our competition taking any of our market share. Certainly on product, that's been very similar to ours.

是的，我的意思是，我們的產品、我們的暢銷產品、我們的設計都做得令人難以置信，例如新產品。令我受寵若驚的是，我們的一些競爭對手越來越多地模仿我們。但這是競爭的一部分。每個人都這樣做。因此，我們認為我們的競爭對手奪走我們的市場份額不會產生任何影響。當然在產品上，這與我們的非常相似。

As a matter of fact, ours has been beating our projections. So we'll continue to do what we do best. We've got the best design team, we think, in the country. Got the best manufacturers and partners around there that make the most unique product anywhere in the world. And we've got a lot of exciting stuff coming up here and people of course, are going to copy us.

事實上，我們的預測已經超出了我們的預期。因此，我們將繼續做我們最擅長的事情。我們認為，我們擁有國內最好的設計團隊。那裡有最好的製造商和合作夥伴，生產世界上最獨特的產品。我們這裡有很多令人興奮的東西，人們當然會模仿我們。

I guess that's flattering and it's part of the business, but we're going to stay a few steps ahead of everybody and we'll continue to do what we do best.

我想這很讓人受寵若驚，而且這是業務的一部分，但我們將領先其他人幾步，我們將繼續做我們最擅長的事情。

Cristina Fernandez, Telsey Advisory.

克里斯蒂娜·費爾南德斯，特爾西諮詢公司。

Hi. Good morning. I wanted to see if you can give more color on the change in the outlook for 2024, particularly as it relates to demand? On the last call, you talked about the demand assumption for the back half being down low-double digit, third quarter came down 11%, fourth quarter outlook, it's also down low-double digits. So it seems to be the same. So I'm just trying to understand what -- where are things falling short of the prior outlook?

你好。早安.我想知道您是否可以對 2024 年前景的變化提供更多信息，特別是與需求相關的變化？在上次電話會議上，您談到下半年的需求假設將下降低兩位數，第三季下降 11%，第四季展望也將下降低兩位數。所以看起來是一樣的。所以我只是想了解一下，哪些地方與先前的展望有差距？

Yeah, great question, Cristina. So low-double digit, of course, there's a little bit of a range there. So that's one component just as we're looking at different metrics and as we're contemplating our promotional cadence about the year. Some flexibility there just in that range, right?

是的，很好的問題，克里斯蒂娜。當然，這個數字是低兩位數，有一點範圍。因此，這是一個組成部分，就像我們正在考慮不同的指標並考慮今年的促銷節奏一樣。在這個範圍內有一定的彈性，對嗎？

And then secondarily, just keep in mind that if -- as the comp -- as the demand comp picks up closer to November, December, that's a little bit tighter to get deliveries out and then impact net revenue, right? So there's just this kind of timing component, too, that we're thinking about and contemplating. As we're looking at November and December sales trajectory or demand trajectories there. So those are the two reasons, though.

其次，請記住，如果 - 作為比較 - 隨著需求比較在接近 11 月、12 月時回升，交貨會有點緊張，然後影響淨收入，對嗎？因此，我們也正在思考和考慮這種時間因素。當我們觀察 11 月和 12 月的銷售軌跡或需求軌跡。但這就是兩個原因。

Thanks. And then just to follow up on the -- one of the earlier questions on the sourcing exposure. I know your China exposure is not as big as others, but can you remind us back in 2018, how you dealt with the tariff? Did you have to -- did you increase prices? Did you make cuts across the organization? And then to the extent that tariffs could be bigger this time around? What are the levers you can pull to offset any cost impact? Thanks.

謝謝。然後只是跟進——早期關於採購風險的問題之一。我知道你們在中國的風險沒有其他人那麼大，但你能提醒我們2018年，你們是如何應對關稅的嗎？你是否必須－你提高了價格嗎？您是否對整個組織進行了裁員？那麼這次關稅可能會提高到什麼程度呢？您可以利用哪些槓桿來抵消任何成本影響？謝謝。

Yeah, sure. Yeah, the tariffs of a few years ago, 25% out of China. Again, we did not have that much stuff coming out of China. The same product we did -- we work with our partners, they took a cut on their margins. And then the offset of that is we raise prices a little bit, I think it was 7% to 10%, something like that. But then our vendors gave us a cut on the product as well and we didn't miss a beat in sales.

是的，當然。是的，幾年前，中國的關稅是25%。再說一次，我們沒有那麼多來自中國的東西。我們做的同樣的產品——我們與我們的合作夥伴合作，他們抽取了利潤。然後抵消的就是我們稍微提高價格，我認為是 7％ 到 10％，類似的東西。但後來我們的供應商也給了我們產品的折扣，我們沒有錯過任何銷售機會。

If this happens across the Board around the -- the world will do the same thing. Again, keep in mind, a big part of our production is right here in the United States. So we don't have to worry about that. The things that are offshore or out of this country, I should say, we'll deal with it one by one.

如果這種情況全面發生──全世界都會做同樣的事情。再次請記住，我們的大部分生產都是在美國進行的。所以我們不必擔心這一點。海外的、國外的事情，應該說，我們會一一處理。

Our product is such an incredible value. Better than our competition, better than the $100 million designers out there that are doing business. So we have room to raise prices and we don't think that's going to affect our sales.

我們的產品具有令人難以置信的價值。比我們的競爭對手更好，比外面做生意的價值 1 億美元的設計師更好。所以我們有提價的空間，我們認為這不會影響我們的銷售。

Thank you.

謝謝。

Peter Keith, Piper Sandler.

彼得·基思，派珀·桑德勒。

Hey, thanks, good morning. Apologies, I got on the call a little bit late. But John, you had just mentioned in a recent response that you stumbled a little bit in Q3, and I guess with the benefit of hindsight, you look at those negative mid to high demand comp declines for July and August. Was there anything internal that you've identified that you were able to fix or that maybe did wrong that now gets you back on track?

嘿，謝謝，早安。抱歉，我接到電話有點晚了。但約翰，您剛剛在最近的回覆中提到，您在第三季遇到了一些挫折，我想事後看來，您會看到 7 月和 8 月的中高需求複合下降。是否有任何內部問題是您發現可以修復的，或者可能做錯了，現在可以讓您重回正軌？

Yeah, I mean, obviously it's done. So we've looked at this backwards and forwards and the previous year, we had a lot of -- we're up against some big numbers, some big positive numbers. Also the previous year, we had taken some big mark downs just to clear out some inventory, which was a big volume for us and we didn't -- and we just assumed we could make that up and obviously we didn't plan for that.

是的，我的意思是，顯然已經完成了。因此，我們前後回顧了這一點，去年，我們遇到了很多——我們面臨一些大數字，一些大的正數。同樣是在前一年，我們進行了一些大幅降價，只是為了清理一些庫存，這對我們來說是一個很大的數量，但我們沒有——我們只是假設我們可以彌補這一點，顯然我們沒有計劃那。

So we think those are the two biggest -- the biggest things. See, we didn't really promote at all those couple of months. We wanted to see what was going to happen if we were just very quiet with promotions and so forth in any categories. And looking back, we probably should have been a little more promotional on that. But the big things were the prior year, the big comps and all the old product we were clearing out.

所以我們認為這是最重要的兩件事。看，那幾個月我們並沒有真正進行促銷。我們想看看如果我們在任何類別的促銷等方面保持安靜，會發生什麼。回顧過去，我們可能應該在這方面多做一點宣傳。但最重要的是前一年、大型比較以及我們正在清理的所有舊產品。

It's a big part of that.

這是其中很大一部分。

Okay, helpful. And then, just a guidance question for Dawn. The demand comp outlook for negative low-double digit for Q4. I'm just trying to piece together. I think what Jen says is that the negative low-single-digit trend has continued with October. November, December, I believe face easier compares.

好的，有幫助。然後，只是向 Dawn 提出一個指導性問題。第四季的需求比較前景為負低兩位數。我只是想拼湊一下。我認為 Jen 所說的是 10 月持續了低個位數的負趨勢。11月、12月，我相信面子比較容易。

So I guess, is the view right now -- and I understand the conservatism, but things are very choppy, it might get worse and why it might they get more challenged post election?

所以我想，現在的觀點是——我理解保守主義，但事情非常不穩定，情況可能會變得更糟，為什麼他們在選舉後可能會受到更多挑戰？

Yeah, that's a great question, Peter. And we've had a lot of internal dialogue and debate about what do we think November and December are going to look like for us. So we're really pleased although, it's the acceleration -- sequential acceleration in September and October, although certainly not where we want to be. And so, really, for -- just because it's been a choppy year because the trends, the underlying trends and data sets are a little choppy, I guess that's the best word.

是的，這是一個很好的問題，彼得。我們進行了很多內部對話和辯論，討論 11 月和 12 月對我們來說會是什麼樣子。所以我們真的很高興，儘管九月和十月連續加速，但肯定不是我們想要的。所以，真的，因為——只是因為這是動蕩的一年，因為趨勢、潛在趨勢和數據集有點不穩定，我想這是最好的詞。

We do have conservatism potentially baked in for November, December. I also -- I think I said this in the last quarter call, maybe. But I do think the election distraction caused some pullback and I think when the consumer returns to spending, it might be in furniture, but it likely will be in other categories, more holiday-oriented.

我們確實有可能在 11 月和 12 月醞釀保守主義。我也 - 我想我可能在上個季度的電話會議中說過這一點。但我確實認為選舉的干擾造成了一些回調，我認為當消費者恢復消費時，可能會在家具方面，但也可能會在其他類別，更多以假期為導向。

So we're really excited to kind of jump into January and next year. And what does that look like for us? But giving ourselves a little bit of flexibility as we finish out this year as it pertains to the guide, I think it's prudent. Just given that two months don't make a trend. And we'll see how the consumer reacts though.

因此，我們非常高興能夠進入一月和明年。對我們來說這是什麼樣的？但是，當我們今年完成與指南相關的工作時，給自己一點彈性，我認為這是謹慎的做法。只是考慮到兩個月沒有形成趨勢。我們將看看消費者的反應如何。

We were really pleased with the newness introductions in September and the marketing campaigns that came out to support those. So, great question. Yours is the question that we've been asking each other for quite robustly for the last several weeks.

我們對 9 月推出的新品以及支持這些新品的行銷活動感到非常滿意。所以，很好的問題。你的問題是我們在過去幾週一直在互相詢問的問題。

Okay, I appreciate the insight. Thank you so much.

好的，我很欣賞你的見解。太感謝了。

Phillip Blee, William Blair.

菲利普·布萊爾，威廉·布萊爾。

Hi, this is Sabrina on for Phillip. Thanks for taking our question. Could you provide some color on performance by income cohort or by geography? And has there been any notable strength or potential softening in any particular categories?

大家好，我是菲利普的薩布麗娜。感謝您提出我們的問題。您能否提供一些有關按收入群體或按地理位置劃分的績效的資訊？在任何特定類別中是否有任何顯著的優勢或潛在的軟化？

Yeah. Good morning, Sabrina. It's a great question. And we monitor our client demo really, really closely. We don't really speak to any shifts we see in months or in quarter really just because, you can't make a trend off of one month data particularly when it comes to demo. We are -- obviously, there were some weather factors in the quarter of hurricanes in Florida and North Carolina area, obviously play a part in that.

是的。早安，塞布麗娜。這是一個很好的問題。我們非常非常密切地監控我們的客戶演示。我們並沒有真正談論我們在幾個月或一個季度看到的任何變化，只是因為，你無法根據一個月的數據得出趨勢，特別是在演示方面。顯然，佛羅裡達州和北卡羅來納州地區的颶風四分之一中存在一些天氣因素，顯然在其中發揮了作用。

But in terms of general, what are we seeing from our clients, who they are, where they are? We're seeing that remain pretty consistent. Nothing that we would see insignificant enough to share the state, but we'll definitely keep you updated if we do see any shifts and trends in the future.

但總的來說，我們從客戶身上看到了什麼？我們看到這仍然相當一致。我們認為沒有什麼是微不足道的，足以分享狀態，但如果我們確實看到未來有任何變化和趨勢，我們一定會及時通知您。

Got it. Thank you.

知道了。謝謝。

Seth Sigman, Barclays.

塞思‧西格曼，巴克萊銀行。

Hey, great. Good morning, everybody. A few follow-up questions for me. As I think about the effectiveness of that September event and then you think about the dip in sales or demand that you saw over the summer, do you think there was any just waiting for that September event? Obviously, the consumer has responded to more promotional activity broadly across the industry. I'm not sure if you're seeing that type of elasticity.

嘿，太棒了。大家早安。有幾個後續問題想問我。當我思考 9 月活動的有效性，然後考慮夏季銷售或需求的下降時，您認為還有人在等待 9 月活動嗎？顯然，消費者對整個行業中更多的促銷活動做出了反應。我不確定您是否看到了這種彈性。

But does it change at all? How you think about pricing and promotions? And then I guess, just one related question, I was thinking about the scenario that you had talked about in recent quarters, about maybe budgeting for more price investments, more promotional activity. I guess it was more of a scenario. But how are you planning for that now rlative to those expectations a quarter ago?

但它有什麼改變嗎？您如何看待定價和促銷？然後我想，只是一個相關的問題，我正在考慮您最近幾季談到的情況，關於可能為更多價格投資、更多促銷活動制定預算。我想這更像是一個場景。但相對於一個季度前的預期，您現在對此有何計劃？

Yeah, that's a good question. And the answer is. the summer again, we're up against these high numbers the year before and a lot of markdown products. Some people certainly wait, our old tried and true customers that are there but you have to keep in mind, well over half of our customers are new every year. They don't know when we do promotions, they don't know us, they just love our product.

是的，這是一個好問題。答案是。又到了夏天，我們面臨著前年的高數字和大量降價產品。有些人肯定會等待，我們的老客戶已經在那裡，但你必須記住，每年超過一半的客戶都是新客戶。他們不知道我們什麼時候會做促銷，他們不認識我們，他們只是喜歡我們的產品。

And I look at it -- it's all about the product. Our product is an amazing value and even more so, just a unique, credible quality stuff that you just cannot get anywhere else in the world. So with that said, we don't need to start promoting more than we have been by any means. We're not planning on it. We're not planning on eroding our margin for promotions.

我看著它——這都是關於產品的。我們的產品具有驚人的價值，更重要的是，它是您在世界其他地方無法獲得的獨特、可靠的優質產品。話雖如此，我們不需要以任何方式開始更多的促銷活動。我們沒有計劃。我們不打算削減促銷利潤。

Because we don't have to. I mean, we've got the best products with -- one of the (inaudible) leaders in our business. We actually start a lot of trends in our business and -- that's what people want, want what they want. Our customers can afford our product, they can afford to travel. Yeah, I think last -- even in the summer, in my opinion, so many people were traveling and so forth, trying to get that out of the system because of COVID. They had maybe didn't do it the year before, they're doing it this year.

因為我們不需要。我的意思是，我們擁有最好的產品——我們行業的（聽不清楚）領導者之一。事實上，我們在我們的業務中開創了許多趨勢——這就是人們想要的，想要他們想要的。我們的客戶買得起我們的產品，他們買得起旅行。是的，我想最後——在我看來，即使在夏天，也有很多人在旅行等等，試圖因為新冠病毒而將其從系統中剔除。他們可能去年沒有這樣做，但今年他們會這樣做。

And now, I think things are coming, election's over, things are becoming more normalized where if they're going to travel, they're going to buy furniture, they're going to go out to dinner and -- but they're going to do all three. And, I think the home business as you guys know, better than I would, the competitors and just the industry -- just about everybody was off this past year or so.

現在，我認為事情即將到來，選舉結束了，事情變得更加正常化，如果他們要去旅行，他們會購買家具，他們會出去吃飯，而且 - 但他們要做這三件事。而且，我認為你們知道的家庭業務比我更了解，競爭對手和整個行業——在過去的一年左右，幾乎每個人都在休息。

And I think things are going to get more normalized next year. But we've got an incredible product, incredible lineup, and there's no need for us to erode our margin by thinking if the competition is taking our business or anything like that because we don't believe that for a second.

我認為明年事情將會變得更加正常化。但我們擁有令人難以置信的產品，令人難以置信的陣容，我們沒有必要透過思考競爭對手是否搶走了我們的業務或類似的事情來侵蝕我們的利潤，因為我們一秒鐘都不相信這一點。

I think just to add on to that as well. If you think about what's happening going from that June, July, August period until the end of September, October period is -- we were doing a lot. We launched our fall catalog that hit home runs at the very end of August. Going into the beginning of September, we were launching incredible new products in August, going into the back half of the year.

我想也只是補充一下。如果你想想從六月、七月、八月到九月底、十月期間發生的事——我們做了很多事。我們在八月底推出了秋季目錄，並取得了全壘打。進入九月初，我們在八月推出了令人難以置信的新產品，進入下半年。

We were doing all of those things that make Arhaus special as a brand, being able to show off that product, show off the product quality, tell the artisan story, show off the styling opportunities, the special-order customization capabilities; all the things that make Arhaus so special. And I think a lot of times, we talk a lot about promotional levers or pricing levers in order to drive the sales.

我們正在做所有那些讓 Arhaus 作為一個品牌與眾不同的事情，能夠展示產品、展示產品品質、講述工匠故事、展示造型機會、特殊訂單客製化能力；所有這些都讓阿爾豪斯如此特別。我想很多時候，我們會談論很多促銷手段或定價手段，以推動銷售。

I think one of the big things that we focus on the business is doing what we do well. And we launched a lot of that at the end of the summer, at the end of August going into the fall period. And I think we're seeing the results of that getting out into the market and integrating people. There are a lot of distractions going on in June, July, August and sometimes getting that catalog in the mail or getting that new showroom floor set in the stores and people walk into really being able to inspire them. Those are the things that really make a difference when you're finishing a home.

我認為我們專注於業務的一件大事就是做我們擅長的事情。我們在夏末、八月底進入秋季期間推出了許多這樣的產品。我認為我們正在看到進入市場和整合人員的結果。六月、七月、八月會發生很多讓人分心的事情，有時會在郵件中收到目錄，或者在商店裡設置新的陳列室地板，人們走進去真的能夠激發他們的靈感。這些才是在您裝修房屋時真正發揮作用的事情。

So when you think about that -- so maybe just a good follow-up there is thinking about the improvement in the exit rate, and it seems like overall message is relatively positive on what you've seen from a demand perspective, at least the cadence. I'm curious when you look at leading indicators in your business, customer engagement, things like store traffic, web traffic. Is there anything that gives you confidence that underlying demand is there, there's just some hesitation on the consumer's part sort of awaiting housing and macro? Thank you.

因此，當你想到這一點時，也許只是一個很好的後續行動，考慮退出率的提高，而且從需求角度來看，整體訊息似乎相對積極，至少是節奏。當您查看業務中的領先指標、客戶參與度、商店流量、網路流量等方面時，我很好奇。有沒有什麼能讓您相信潛在需求是存在的，只是消費者在等待住房和宏觀經濟方面有些猶豫？謝謝。

Yeah, that's a great question. And as Dawn mentioned a few questions ago, we've been digging into every metric and looking at everything and I'm hesitant to even comment on anything specifically because you see one metric or element that suggests one direction and then you see something else and maybe suggest something else.

是的，這是一個很好的問題。正如黎明之前提到的幾個問題，我們一直在深入研究每一個指標並審視一切，我什至不願意具體評論任何事情，因為你看到一個暗示一個方向的指標或元素，然後你看到其他東西，也許建議別的東西。

We did -- I think to the comment about seeing the really positive responses to our new product that we just launched, I'm seeing some nice response, the marketing that we put out, those are all of those indicators that confirmed to us that what we're doing is working. People are buying the product, as John mentioned, we're being surprised by the success of some of these new collections and how well they're doing despite everything that is going on in the market.

我們做到了——我認為關於我們剛剛推出的新產品得到了真正積極的反應的評論，我看到了一些很好的反應，我們推出的營銷，這些都是向我們證實的指標我們正在做的事情正在發揮作用。人們正在購買該產品，正如約翰所提到的，我們對其中一些新系列的成功以及儘管市場上發生的一切情況下它們的表現感到驚訝。

So I think that is one of the big things we look at. I think the other thing I would point to that isn't really a market indicator or maybe a customer behavior indicator, but all of the things that are going on behind the scenes and we're getting smarter every day, we're getting better every day. We're talking about how we're investing in our data capabilities, our internal team analytics capabilities, really understanding that customer behavior.

所以我認為這是我們關注的重要事情之一。我認為我要指出的另一件事並不是真正的市場指標，也可能不是客戶行為指標，而是幕後發生的所有事情，我們每天都在變得更加聰明，我們正在變得更好每天。我們談論的是我們如何投資我們的數據能力、我們的內部團隊分析能力，真正理解客戶的行為。

And so, I think we are getting better every single day, every single month of being able to give our clients what they want and meet them when they want us to be there. And so, that gives us a lot of positive optimism going into 2025 as well.

因此，我認為我們每一天、每一月都在進步，能夠為客戶提供他們想要的東西，並在他們希望我們出現時與他們見面。因此，這也讓我們對 2025 年充滿正向樂觀的情緒。

Thanks so much.

非常感謝。

(Operator Instructions)

（操作員說明）

Thanks a lot and good morning. My first question is just thinking about the relative success you had in terms of sales over $5,000 and $10,000. What do you think drove that? Was it because of bigger discounts or any other factors that you can point to?

非常感謝，早安。我的第一個問題只是想想你們在銷售額超過 5,000 美元和 10,000 美元方面取得的相對成功。您認為是什麼推動了這一點？是因為更大的折扣還是您可以指出的任何其他因素？

Yeah, we've been concentrating on A, remodeling our stores and getting our stores absolutely beautiful and that absolutely helps with sales. People walk in and say they want the whole room. So that's number one, is when you walk in our stores and certainly, our new stores and our renovated stores. People are just blown away and they walk in and they just spend more money. On top of that, we focus very heavily on our internal interior designers.

是的，我們一直專注於A，改造我們的商店，讓我們的商店變得非常漂亮，這絕對有助於銷售。人們走進來並說他們想要整個房間。因此，第一件事就是當您走進我們的商店，當然還有我們的新商店和翻新商店時。人們被震撼了，他們走進去，花更多的錢。最重要的是，我們非常關注我們的內部室內設計師。

That again -- that triples the average sale, I believe. One of our own designers works with the clients, gets out to the client's home, really puts together a plan to do the entire room or certainly the entire house with many, many of those. That entails a larger sale as well. On top of that, our trade business with the outside designers has been booming.

我相信，這又是平均銷售額的三倍。我們自己的一位設計師與客戶合作，到客戶家中，真正制定了一個計劃，對整個房間或整個房子進行很多很多的改造。這也意味著更大的銷售。最重要的是，我們與外部設計師的貿易業務一直在蓬勃發展。

More and more of those every month are finding us, signing up for our programs and using us. And those also are our larger sales. So the combination of those, we know it is why it's driving the larger sales.

每個月都有越來越多的人找到我們、註冊我們的計劃並使用我們。這些也是我們較大的銷售額。因此，我們知道這就是推動更大銷售額的原因。

That's helpful color, John. And then secondly, in terms of product, you talked about some competitors emulating and knocking out some of your product. You don't feel like you need to get more aggressive on price to continue to drive strong sales of your competing products. Can you confirm that for one?

這是有用的顏色，約翰。其次，在產品方面，您談到一些競爭對手模仿並淘汰您的一些產品。您不覺得自己需要在價格上採取更激進的態度來繼續推動競爭產品的強勁銷售。能確認一下嗎？

And then for two, thinking about some of the new product you highlighted like the Astor Collection and reeded furniture, it seems to be a major trend. Do you see that as having a lot of legs? And do you see the competitive environment there intensify?

然後對於兩個人來說，想想你強調的一些新產品，例如阿斯特系列和蘆葦家具，這似乎是一個主要趨勢。你覺得它有很多腿嗎？您是否看到那裡的競爭環境加劇？

Yeah. The answer to the last question, yes, that trend is here for quite a while. And from what we can tell, we really started that trend in any significant way and now, people are playing catch-up. So we're off to the next, next reeded collection and the next design that's going to be the next phase of that once the reeded collection gets a little stale.

是的。最後一個問題的答案是，是的，這種趨勢已經存在相當長一段時間了。據我們所知，我們確實以任何重要的方式開啟了這一趨勢，現在，人們正在追趕。因此，我們將開始下一個、下一個簧片系列和下一個設計，一旦簧片系列變得有點陳舊，這將是下一個階段的設計。

And I'm guessing the reeded collections all the way down to the lowest folks right now, I'm guessing everybody has it because once people jump on a trend, they follow us, they want to copy us and all the way down to the lowest guys selling to not our customers but everybody. So any trends in this country, people love to jump on and follow.

我猜現在流行的系列一直延伸到最低層的人們，我猜每個人都有它，因為一旦人們追隨潮流，他們就會追隨我們，他們想要複製我們，一直到最底層的人。人不是賣給我們的客戶，而是賣給所有人。因此，這個國家的任何趨勢，人們都喜歡追隨和追隨。

We got -- that's part of our culture here in the United States. And so, we're on to the next one. We've added actually some more folks to our design team. Coming up with some great new products. We found some great new partners around the world that can handle our growth, as we've grown that we've been very, very happy with. So we're going to be -- keep doing what we do best and then just come up and innovate new products.

我們知道——這是我們美國文化的一部分。所以，我們進入下一個。實際上，我們已經為我們的設計團隊添加了更多人員。推出一些很棒的新產品。我們在世界各地找到了一些很棒的新合作夥伴，可以幫助我們成長，我們的成長讓我們非常非常滿意。因此，我們將繼續做我們最擅長的事情，然後推出並創新新產品。

And a lot of our products can't be copied because they're so handmade. A lot of these folks, these bigger folks just can't do it. They want things that can be easily manufactured that they can pump out, 1,000 of a day in one factory. Quite a bit of our product isn't like that, but we keep the collections very small with those kind of folks up to (inaudible) even at a time. So they can handle it, but that's a different model than a lot of our competitors.

我們的許多產品無法複製，因為它們都是手工製作的。很多人，這些大人物都做不到。他們想要能夠輕鬆製造的產品，並且可以在工廠每天生產 1,000 個產品。我們的許多產品不是這樣的，但我們的收藏量很小，即使一次也只有這樣的人（聽不清楚）。所以他們可以處理它，但這與我們的許多競爭對手不同。

So ours is a very unique model.

所以我們的模型是一個非常獨特的模型。

Thank you so much.

太感謝了。

Thank you. Ladies and gentlemen, we have reached the end of question-and-answer session. I would now like to turn the floor over to Tara Atwood for closing comments.

謝謝。女士們、先生們，問答環節已經結束。現在我想請塔拉·阿特伍德發表結束評論。

Thank you, everyone, for your participation in our call and interest in Arhaus.

感謝大家參與我們的電話會議以及對 Arhaus 的關注。

Thanks, guys. Appreciate it. Have a great day.

謝謝，夥計們。欣賞它。祝你有美好的一天。

Thank you, everyone, for your participation in our call and interest in Arhaus.

感謝大家參與我們的電話會議以及對 Arhaus 的關注。