Contrasting Arhaus (NASDAQ:ARHS) & Bath & Body Works (NYSE:BBWI)

Arhaus (NASDAQ:ARHS) and Bath & Body Works (NYSE:BBWI) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Valuation and Earnings

This table compares Arhaus and Bath & Body Works”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arhaus	$1.27 billion	1.24	$68.55 million	$0.50	22.32
Bath & Body Works	$7.31 billion	0.81	$798.00 million	$3.75	7.45

Bath & Body Works has higher revenue and earnings than Arhaus. Bath & Body Works is trading at a lower price-to-earnings ratio than Arhaus, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

27.9% of Arhaus shares are held by institutional investors. Comparatively, 95.1% of Bath & Body Works shares are held by institutional investors. 1.8% of Arhaus shares are held by insiders. Comparatively, 0.3% of Bath & Body Works shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Arhaus and Bath & Body Works, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arhaus	0	11	4	0	2.27
Bath & Body Works	0	4	14	0	2.78

Arhaus currently has a consensus target price of $10.50, indicating a potential downside of 5.91%. Bath & Body Works has a consensus target price of $42.1875, indicating a potential upside of 51.02%. Given Bath & Body Works’ stronger consensus rating and higher probable upside, analysts plainly believe Bath & Body Works is more favorable than Arhaus.

Risk and Volatility

Arhaus has a beta of 2.56, indicating that its share price is 156% more volatile than the S&P 500. Comparatively, Bath & Body Works has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500.

Profitability

This table compares Arhaus and Bath & Body Works’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arhaus	5.33%	20.08%	5.62%
Bath & Body Works	11.10%	-47.44%	15.18%

Summary

Bath & Body Works beats Arhaus on 9 of the 14 factors compared between the two stocks.

About Arhaus

Arhaus, Inc. operates as a lifestyle brand and premium retailer in the home furnishings market in the United States. It provides merchandise assortments across various categories, including furniture, lighting, textiles, décor, and outdoor. The company's furniture products comprise bedroom, dining room, living room, and home office furnishings, which includes sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases, modular storage, and other items; and outdoor products, such as outdoor dining tables, chairs, chaises and other furniture, lighting, textiles, décor, umbrellas, and fire pits. It offers lighting products, including various distinct and artistic lighting fixtures comprising chandeliers, pendants, table and floor lamps, and sconces; textile products, such as handcrafted indoor and outdoor rugs, bed linens, and pillows and throws; and décor products, including various wall art to mirrors, vases to candles, and other decorative accessories. The company distributes its products through an omni-channel model comprising showrooms, e-commerce platform, print and digital media, and in-home designer services. Arhaus, Inc. was founded in 1986 and is headquartered in Boston Heights, Ohio.

About Bath & Body Works

Bath & Body Works, Inc. is a specialty retailers and home to America’s Favorite Fragrances, offering a breadth of exclusive fragrances for the body and home, including the selling collections for fine fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The company was founded by Leslie Herbert Wexner in 1963 and is headquartered in Columbus, OH.