2027 pricing — the issue, projected forward

The Overview showed a business bleeding on gross margin: landed product cost climbing faster than price, an operating loss that widens every year to a run-rate in 2026. The proposed 2027 pricelist decides what to do about the price side of that equation — and its answer, across the highest-volume core, is hold the list and absorb the cost. This page takes that book at face value and projects the Overview's issue into 2027.

The core decision. Every one of the top 20 Division-V styles by sales keeps its End-Quantity Price flat for 2027 while the landed cost underneath rises . On this year's volumes that is of product margin handed back at the floor — layered directly onto the margin erosion the Overview already documents. The pricelist optimizes the one cost lever that isn't broken, and declines to pull the one that would help.

Two margins, moving opposite ways

The pricelist and the GL disagree — because they measure different things. The green line is Division V's merchandise margin from A2000 (net sales less standard product cost); it has held near for four years, and it's the margin the pricelist's floor markups are computed against. The red line is the fully-loaded gross margin from the GL — the same sales, net of product and decoration and warehouse/ops cost — and it has fallen from to . Reading the healthy green line, "hold the list" looks safe. It is the red line that is losing the money — and holding price flat does nothing for it.
Why this matters for 2027. The pricelist reasons in the green world, where a margin absorbing a cost bump still clears a comfortable floor. But the money is lost in the red world, and there the of foregone price is pure gross profit the division cannot spare. The 2027 decision is being made on the one number that looks fine.

What the 2027 book locks in

Top styles by 2027 margin given back, on 2025 Division-V volume. FLAT = 2027 EQP held equal to 2025 despite the cost rise. Realized ASP is what the style actually sold for (A2000 INVOICE_LI_M); where it sits above the 2027 EQP floor, there is room to lift the list without touching street price. 3300 Pro-Weave Blanket, 139 Fundamental Hood, 20335 Fundamental Crew, and 17116 Vintage Raglan are the biggest single leaks — all held flat, all with ASP above floor.

The 2027 P&L, three ways

2027 operating income under three pricing responses, all holding volume and the 2026 cost/opex structure constant so only the pricing choice moves. Hold list absorbs the cost step and the loss deepens to ( vs the 2026 run-rate). Targeted recovery lifts EQP into the ASP headroom on the top ~15 styles for +. Full recovery passes the entire cost step through. Every dollar of price recovered is ~pure gross profit — it drops almost straight to operating income.

Projecting the Overview's trajectory to 2027

The blue line is the Overview's operating-income history (2026e annualizes Jan–May). The 2027 fan shows where each pricing choice lands it. Note the ceiling: even full cost pass-through only lifts 2027 to — the loss narrows but does not close, because most of it was never a product-price problem.
The verdict. The 2027 pricelist is a necessary correction handled backwards. Holding the list on the core protects competitiveness but hands back into a P&L that is already losing money on every fully-loaded dollar — deepening the 2027 loss to about . The realized ASP sits above the EQP floor on of the flat core styles, a cushion; capturing even of it — the disciplined top-15 nudge — is worth about the same to operating income and carries little competitive risk. Recommendation: index the top-volume EQPs to landed cost rather than freezing them, and protect the true EQP-tier accounts separately.
But pricing alone won't fix it. Even the full-pass-through ceiling leaves a operating loss. The remaining gap is loaded cost — decoration and warehouse/ops labor spread over a shrunken revenue base — plus operating expense, none of which a pricelist touches. The 2027 book should stop the bleed at the floor; closing the rest is an operations-and-scale problem (see Department latency and Payroll & orders), not a pricing one.
Source & method. Proposed MV Sport 2027 Pricelist (Line List tab: 2027 LDP / EQP / floor markup vs 2021–2025), joined by style to A2000 Division-V realized sales (NKW.INVOICE_LI_M, DIV_NO='V', 2023–2026) — styles matched to 2025 volume, net. "Margin given back" = (2027 LDP − 2025 LDP) × 2025 units where EQP is held flat. Merchandise margin = net less A2000 standard cost; loaded margin from the BC GL (division 02) per the Overview. Scenarios hold 2027 volume and the 2026 cost/opex structure fixed and vary only price; recovery is treated as ~pure gross profit. Read-only; SSNs never read.