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Arhaus , Inc. (ARHS), a retail furniture company with annual revenue of $1.27 billion and a market capitalization of $1.15 billion, announced on Monday the appointment of Michael Lee as its new Chief Financial Officer, effective May 12, 2025. According to InvestingPro data, the company maintains a GOOD financial health score despite its stock declining 40.2% over the past year. The announcement, based on a recent SEC filing, follows a series of leadership roles held by Lee within the industry.
Lee, 52, brings a wealth of experience to Arhaus, having previously served as CFO and President of Operations and Supply Chain at Ste. Michelle Wine Estates from 2022 to 2025. His background also includes tenure at Canopy Growth (NASDAQ:CGC) Corporation as Executive Vice President and CFO from 2019 to 2021, and various leadership roles at Constellation Brands (NYSE:STZ), Inc., where he was most recently Senior Vice President, Business Transformation.
In his new role at Arhaus, Lee will receive an annual base salary of $550,000, which is subject to review and adjustment. The compensation package comes as the company maintains healthy operational metrics, with a gross profit margin of 46% and sufficient cash flows to cover interest payments, according to InvestingPro analysis. Lee is eligible for annual cash incentives and long-term equity awards as determined by the company’s Compensation Committee. For 2025, his target cash incentive is set at 60% of his base salary, contingent upon the achievement of performance goals set by the committee.
Lee will also receive a one-time sign-on bonus of $250,000, which is subject to repayment if his service is less than twelve months. Furthermore, he is granted 400,000 restricted stock units under the Arhaus 2021 Equity Incentive Plan, with a vesting period over five years.
As part of his compensation package, Lee is eligible for severance and benefits in line with company policies and consistent with other executive officers. He will also receive a one-time payment of $10,000 for relocation expenses and a monthly reimbursement of $3,000 for commuting costs through July 2026.
The company’s filing confirmed that Lee has no familial ties to any current director or executive officer of Arhaus, nor does he have any material interest in transactions that would necessitate disclosure under SEC regulations.
The appointment of Michael Lee comes as Arhaus continues to strengthen its leadership team and financial strategy. His proven track record in financial management and business transformation is expected to contribute to the company’s growth and operational efficiency. The information regarding this executive change is based on a press release statement filed with the SEC.
In other recent news, Arhaus Inc (NASDAQ:ARHS). reported strong financial results for the fourth quarter of 2024, surpassing analysts’ expectations with an earnings per share of $0.15, compared to the forecasted $0.08. The company also exceeded revenue forecasts, reporting $347 million against the expected $315.09 million. However, the full-year 2024 revenue decreased by 1.3% year-over-year to $1.271 billion, and net income fell by 45.3% to $69 million. Looking ahead, Arhaus projects 2025 net revenue between $1.360 billion and $1.400 billion, indicating potential growth of up to 3%.
Additionally, Stifel analysts recently adjusted their price target for Arhaus shares to $11.50 from $14.00, maintaining a Buy rating, while Piper Sandler downgraded the stock from Overweight to Neutral, lowering the price target to $12.00 from $15.00. The downgrade by Piper Sandler was attributed to significant management changes and concerns over the company’s financial performance, particularly the lack of margin expansion. Arhaus has seen notable turnover within its management team, including the loss of its CFO, COO, and SVP of Investor Relations.
In a recent development, Arhaus announced the appointment of Allison Sutley as its new Chief Information Officer, effective soon. Sutley brings extensive experience from her previous role as Chief Technology Officer at Express, Inc. Her appointment follows the departure of the former CIO, Mr. Venkat Nachiappan. These changes come as Arhaus continues to evolve its leadership team and enhance its technology and e-commerce capabilities.
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