Net and Comprehensive Income per Share

9 Months Ended

Sep. 30, 2022

As a result of the Reorganization and IPO, existing Class A and Class B Unitholders of LLC were issued Class B and Class A common stock in the Company, respectively. The Class A Unitholders received 80,792,206 shares of Class B common stock and the Class B Unitholders received 31,266,536 shares of Class A common stock. Accordingly, all share and per share amounts for all periods presented in the condensed consolidated statements of comprehensive income and this note have been adjusted retroactively, where applicable, to reflect the Reorganization.

Basic and diluted net and comprehensive income per share for the nine and three months ended September 30, 2022 and 2021, was calculated by adjusting net and comprehensive income attributable to Arhaus, Inc. for net and comprehensive income attributable to noncontrolling interest, and dividing by basic and diluted weighted-average number of common shares outstanding. Management Incentive Unitholders did not participate in the earnings or losses of the Company as of September 30, 2021 and therefore were not participating securities. As such, they were not included within the calculation of basic or diluted earnings per share as of September 30, 2021.

Basic and diluted net and comprehensive income per share for the nine and three months ended September 30, 2022 and 2021, is as follows (amounts in thousands except share and per share data):


	Nine months ended September 30,				Three months ended September 30,
	2022		2021		2022		2021
Numerator
Net and comprehensive income	$	89,633	$	30,276	$	36,936	$	14,228

Less: Net and comprehensive income attributable to noncontrolling interest	—		17,499		—		8,231
Net and comprehensive income attributable to Arhaus, Inc.	$	89,633	$	12,777	$	36,936	$	5,997

Denominator—Weighted Average Shares Outstanding
Weighted-average number of common shares outstanding, basic	137,939,577		112,058,742		138,484,495		112,058,742
Effect of dilutive restricted stock (1)	1,606,225		—		1,360,838		—
Weighted-average number of common shares outstanding, diluted	139,545,802		112,058,742		139,845,333		112,058,742

Net and Comprehensive Income Per Share
Net and comprehensive income per share, basic	$	0.65	$	0.11	$	0.27	$	0.05
Net and comprehensive income per share, diluted	$	0.64	$	0.11	$	0.26	$	0.05

(1) During the nine and three months ended September 30, 2022, 594,312 and 546,164 shares of unvested restricted stock were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive.