Fiscal Year Ended December 31, 2025 — with 2026 Projections
View Visual PresentationThread & Co. closed fiscal year 2025 with total revenue of $77,991 CAD, reflecting steady demand across all four product lines. Despite rising material costs and inflationary pressure on overhead, the company delivered $4,577 in net profit — a 5.9% net margin that demonstrates our commitment to sustainable, margin-conscious growth.
Our gross margin of 36.2% remained healthy, supported by strategic pricing adjustments in Q3 and disciplined inventory management. Operating expenses were held to $23,628, reflecting cost consciousness without compromising quality or team capabilities.
Board Recommendation: Reinvest 2025 profits into product line expansion and digital channel development. Target 10% overall revenue growth in FY 2026 with improved margins through supply chain optimization.
Detailed breakdown of revenue streams, cost of goods sold, and operating expenses for the twelve months ended December 31, 2025.
| Account | FY 2025 | % of Revenue |
|---|---|---|
| Revenue | ||
| Outerwear & Jackets | $33,644 | 43.1% |
| Denim & Bottoms | $19,050 | 24.4% |
| Casual & Tops | $15,750 | 20.2% |
| Accessories & Basics | $5,600 | 7.2% |
| Wholesale Markup | $3,948 | 5.1% |
| Total Revenue | $77,991 | 100.0% |
| Cost of Goods Sold | ||
| Direct Material & Production | $9,665 | 12.4% |
| Wholesale Fulfillment | $40,103 | 51.4% |
| Total COGS | $49,768 | 63.8% |
| Gross Profit | $28,223 | 36.2% |
| Operating Expenses | ||
| Rent & Facilities | $15,000 | 19.2% |
| Insurance | $3,000 | 3.8% |
| Utilities | $3,283 | 4.2% |
| Interest Expense | $1,235 | 1.6% |
| Maintenance & Janitorial | $418 | 0.5% |
| Depreciation | $367 | 0.5% |
| Subscriptions & Software | $325 | 0.4% |
| Total Operating Expenses | $23,628 | 30.3% |
| Other Expenses (FX Loss) | $18 | 0.0% |
| Net Income | $4,577 | 5.9% |
Summary of assets, liabilities, and equity as at December 31, 2025. The company maintains a strong current ratio and manageable debt levels.
For fiscal year 2026, management is targeting 10% overall revenue growth to $85,790 CAD. Growth will be distributed unevenly across product lines to reflect market dynamics, channel expansion opportunities, and strategic investments in higher-margin categories.
| Product Line | Growth | Driver |
|---|---|---|
| Outerwear & Jackets | +7% | Mature line; steady wholesale channel growth |
| Denim & Bottoms | +12% | New cuts launching Q2; expanded online presence |
| Casual & Tops | +14% | Highest growth potential; DTC e-commerce push |
| Accessories & Basics | +17% | High margin, low COGS; new product drops in Q1/Q3 |
| Wholesale Markup | 0% | Flat; renegotiating partner terms in H2 |
Margin Improvement Target: By shifting the revenue mix toward higher-margin Casual and Accessories lines, we project gross margin improvement from 36.2% to approximately 38.5% in FY 2026, contributing an additional ~$1,800 in gross profit beyond the volume increase alone.
| Line Item | FY 2025 | FY 2026 (Proj.) | Change |
|---|---|---|---|
| Total Revenue | $77,991 | $85,790 | +10.0% |
| COGS | $49,768 | $52,749 | +6.0% |
| Gross Profit | $28,223 | $33,041 | +17.1% |
| Operating Expenses | $23,628 | $24,573 | +4.0% |
| Net Income | $4,577 | $8,449 | +84.6% |
| Net Margin | 5.9% | 9.8% | +3.9 pts |
| Risk | Impact | Mitigation |
|---|---|---|
| Supply chain disruption | COGS increase 5-8% | Dual-source key materials; 90-day safety stock |
| Consumer spending slowdown | Revenue miss 3-5% | Flexible marketing spend; loyalty program launch |
| Interest rate environment | Debt servicing +$200-400 | Accelerate note payable reduction from cash flow |
| Inventory obsolescence | Write-down risk $1,000-2,000 | Seasonal markdown calendar; just-in-time for basics |
Launch e-commerce DTC channel. Accessories product drop. Renegotiate wholesale terms.
Fall/Winter collection launch. Loyalty program rollout. Debt reduction milestone.