Craig-Hallum downgrades Arhaus on competition, demand concerns

Craig-Hallum downgraded Arhaus (ARHS) to Hold from Buy with a price target of $10, down from $14. The firm’s Q3 channel work points to Arhaus seeing “sluggish” demand and new written orders as “robust” product rollouts from RH (RH) coupled with more aggressive pricing actions from peers hurt conversion. Traffic at Arhaus.com has turned down significantly with September traffic down an estimated 30% despite the company’s typical storewide sale running during the month, the analyst tells investors in a research note. Hallum is also concerned that Arhaus’ change in pricing policies away from a consistent presentation of “sale” offerings has left consumers confused.