NEW YORK - FS Capital Partners VI has scaled down its investment in Arhaus Inc, the premium home furniture retailer, by offloading 4,446,659 shares. This significant transaction, which occurred on Tuesday, reduced their holding by 25.44%, leaving them with 12,277,543 shares. Despite this sell-off, FS Capital Partners VI retains a substantial stake in Arhaus, amounting to 23.09% of their $156 million portfolio and 94.23% of the stock's traded portfolio position.
Arhaus Inc, known for its luxury lifestyle brand and retail presence both in physical stores and online, went public on November 4, 2021. The company boasts a market capitalization of $1.19 billion and trades at a PE ratio of 8.42%. Following the sale by FS Capital Partners VI, Arhaus saw its stock price fall by 4.49%. The company's shares have declined by 32% since the IPO and have experienced a downward trend year-to-date at -9.57%.
The retailer has demonstrated strong growth metrics over the past three years with revenue growth at 35.60%, EBITDA growth at 74.10%, and earnings growth reaching an impressive 162.80%. However, despite these robust figures, Arhaus faces potential challenges ahead as indicated by its GF Score of just 29 out of a possible 100. The score suggests caution regarding the company's future prospects.
Arhaus maintains a solid financial foundation with a financial strength rank of 7 out of 10 and a profitability rank of 5 out of 10. The company's return on equity (ROE) stands at an impressive 58.20%, with a return on assets (ROA) of 14.20%. Additionally, Arhaus boasts an extraordinarily high interest coverage ratio of 9,386.45.
The move by FS Capital Partners VI to reduce their stake may be interpreted as either a strategic adjustment or a reaction to current market conditions. Nevertheless, their continued substantial investment indicates a confidence in Arhaus Inc’s value proposition and business model. Gotham Asset Management, LLC remains the largest guru shareholder in Arhaus Inc., signaling ongoing interest from significant investors in the company’s trajectory.
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