Arhaus, Inc.

Good morning and welcome to the R House second quarter 2025 earnings conference call. 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 Tara Atwood, vice president of investor relations. Please go ahead.

Good morning and thank you for joining us for the R House second quarter 2025 earnings call. Joining me on today's call are John Reed, our founder, chairman, and chief executive officer, Michael Lee, our chief financial officer, and Jennifer Porter, our chief marketing and e-commerce officer. After our prepared remarks, we will open up the line for a Q&A session. During Q&A, please limit yourself to one question and one follow-up. We issued our earnings press release in 10Q for the quarter ended June 30th 2025 before the market opened today. Those documents are available on our investor relations website at .RHouse.com. A replay of the call will be available on our website within 24 hours. I would like to remind everyone that our 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 in the cautionary statements and risk factors described in our most recent annual report on Form 10K and subsequent 10Q. As such, factors may be updated from time to time in our filings with the SEC. The forward-looking statements are made as of today's date and accept 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 reconciliations. Now I will turn the call over to John.

Good morning, everyone, and thank you for joining us. We appreciate your continued interest and support of our house. I'm excited to kick off today's call by welcoming our new Chief Financial Officer, Michael Lee. Mike has hit the ground running to bring deep operational and financial expertise that has strengthened our leadership team. I'm thrilled to have him on board. He's playing an important role as we continue to advance our long-term strategic priorities, which are as follows. Increasing brand awareness to drive net revenue. Growing our showroom footprint with discipline. Enhancing the omni-channel client experience and investing in scalable infrastructure to support long-term growth. Now let's turn to our business and operational updates. Like many companies, we've experienced a highly dynamic and uncertain backdrop this quarter, with shifting tariffs, ongoing macro pressures, and broader geopolitical tension, all weighing on the consumer. These are factors outside our control. What is within our control is how we show up for our clients. And we continue to focus on what we do best, delivering exceptional product, deepening our client relationships, and growing the business with discipline. I'm incredibly proud to share that we achieved the highest quarterly net revenue in our house history. Driven by the early ramping of our Dallas Distribution Center that transitioned in-house, this enabled us to convert strong first quarter demand into net revenue more efficiently and at a higher volume than expected. As a result, comparable growth was up 10.5 percent. While demand comparable growth declined in the second quarter due to ongoing macroeconomic pressures, we've seen strong momentum heading into the third quarter. July demand comparable growth increased 15.7 percent, reflecting the resilience of our high-end clients, base, and enduring appeal of our products. -to-date, including July, demand comparable growth is up 2.2 percent. Our results this quarter are a testament to the strength of our brand, the loyalty of our clients, and above all, the incredible commitment of our teams. I want to take a moment to thank the entire Our House team for their passion, care, and relentless dedication you bring to our business every single day. We are building something truly special together. I couldn't be prouder to work alongside all of you. In an environment like this, we don't take any of this for granted, and it deepens our confidence in the long-term strategy we're executing. Turning to product, this is where our house begins and this is where our house bleeds. Our curation of the most beautiful furniture created by the best artisans around the world is what sets our house apart. For nearly 40 years, we've traveled the world to find home in the most unexpected places and to share it with our clients. Our designs are rooted in the quality and crafted with care, and they are made to be lived with, passed down, and admired for generations. Family-run workshops in Romania, Mexico, the foothills of North Carolina, the countryside of Italy, our artisans span the globe. I recently returned from a visit in Mexico where we're creating pieces with artisans designed around the beauty of reclaimed wood. The materiality and the artistry of these collections are unlike anything I've ever seen before. Italy has long been at the heart of our story, a place where artistry and tradition came together and where we've built enduring relationships with artisans spanning over three decades. We continue to grow relationships in Italy with new artisans who share our passion for excellence. These are the moments that inspire me. Not only as a designer, but as a leader, as CEO, I see my role as the architect of product vision, working closely with our incredible, talented team to translate these inspirations into products that reflect how our clients want to live. Looking ahead to fall, you'll see an elevated and expansive assortment that is globally inspired, material rich, and distinctly our house. It reflects the direction we're heading while staying true to our heritage of timeless design, exceptional craftsmanship, and global storytelling. Think warm wood tones like American walnut and the beauty of mixed materials including stone, burl, chagrin that add depth, texture, and sophistication. Architectural forms remain a signature of our season and include flowing curves, beveled edges, reeded wood, and dimensional carvings. We're doubling down on what resonates, refining forest styles, updating traditional silhouettes, and emphasizing the rich interplay of materials. This is a season of confidence, creativity, and intentional newness. And upholstery remains essential to our story. We believe we have the best upholstery in the market, delivering on quality, comfort, and customization. Clients and designers can customize the majority of our collections to their detailed specifications by selecting unique configurations, the perfect fabrics, and in many cases, details such as lake finishes, colors, and trim details. This customization is backed by more than 600 fabrics and a growing library of more than 90 leathers. Now I'm incredibly proud to share a new chapter in our journey, the launch of our house bath collection representing our thoughtful expansion into a new space within the home. One that is deeply personal where each day begins and ends and where moments of self care and sanctuary are found. Our approach to bath is guided by deep client insight and the commitment to long term value. We design with intention listening closely to our clients' lives and what they need. The bath collection features vanities, storage pieces crowned with marble and stone, faucets and hardware, and antique brass and polished nickel, and Turkish cotton towels. Every item reflects commitment to the timeless design, quality craftsmanship, and functional elegance now extended to the bath. Bath is a result of a multi-year effort led by our product innovation team who have spent over two years perfecting every detail. It's a powerful reflection of the culture we've built at our house, hands on, purpose driven, and fueled by passion and vision. I'm deeply grateful to the entire team for the incredible work they've done to bring this to life. The Our House Bath Collection will be available online and in selected showrooms this fall, supporting by our in-home design team to ensure seamless client experience. In closing, our house is built to perform through cycles anchored by timeless impeccably crafted design and elevated client experience and disciplined execution. That foundation has served us well for nearly 40 years and remains one of our greatest competitive advantages. We're navigating the current environment from a position of strength, debt free with ample liquidity, and remain focused on what we can control, executing with discipline, scaling our showroom footprint with intention, and investing in systems, product, and talent that will fuel our next phase of growth. With that, I'll turn it over to Jen Porter, our Chief Marketing and E-commerce Officer.