Division V — the state of the business

Straight from the general ledger (BC company DPS PROD, division 02), MV Sport is a business in a multi-year slide on both revenue and margin. Net revenue has fallen every year since 2022 — from $79M to $69M, tracking to ~ in 2026 — and gross margin has eroded alongside it, from 28% to . That combination flipped the division from roughly break-even in 2022 to an operating loss that widens every year, on pace for about in 2026. The cause is not overspending: operating expenses are flat-to-down, and — as the rest of this report shows — the order book and decoration franchise are stable. The problem is unit margin: landed product cost is climbing faster than price.

The one-line take. This is not a payroll story anymore. Operating expenses are flat ( → YTD) and demand is stable, yet the division loses more money each year — because gross margin is collapsing: → year-to-date, as product / landed cost rose even while sales fell. The lever that needs attention is cost of goods, not spending.

The P&L, from the ledger

Net revenue = gross sales less returns & discounts. COGS splits into product / landed (FOB + LDP landed-duty-paid + raw materials), decoration, and warehouse / ops. 2026 is Jan–May only — June revenue had not posted at extract time, so it is excluded and 2026 is compared against the same five months of 2025. "YTD Δ" is 2026 vs 2025 for the Jan–May window (percentage-point change for margins).

Revenue and margin have fallen together for four years

Net revenue is down % from its 2022 level; gross margin has fallen every year, points since 2022. 2026e annualizes the five complete months (Jan–May) to a full year. The two lines moving down together are the whole story: the division sells a bit less each year and keeps a smaller slice of each dollar.

The 2026 driver is cost of goods, not spending

Cost components as a share of net revenue, Jan–May each year. Product / landed cost is the mover: it jumped from % of revenue in 2025 to % in 2026 — landed-duty-paid (LDP) cost rose in dollars even as sales fell . Decoration held; warehouse cost actually came down. This is a margin problem in the product itself — pricing vs. landed cost / duties — not a spending problem.
Monthly gross margin, division 02, through the last fully-posted month (). The 2026 line (red) sits well below 2024–25 from the start of the year — a step-down in product economics, not a one-month blip.

Operating loss, widening

Operating income by year (2026e annualizes Jan–May). MV Sport earned in 2022, then swung to a loss in 2023 and has lost money every year since — (2024), (2025), and tracking to in 2026. The step down in 2026 is the margin compression above flowing to the bottom line while opex stays put.

It isn't demand, and it isn't overspending

  • Demand is holding — if anything, up. Booked order value (ex-Costco) is for H1 (Jan–Jun) and on the same Jan–May window this page uses — see Market segments. The core order book (excluding the BSN print-on-demand program) is not shrinking or fragmenting — see Payroll & orders.
  • Spending is flat. Operating expenses held at → (full year) and → (Jan–May). Marketing, selling, and G&A are all flat-to-down. Payroll — the biggest cost — is stable, and most of it sits in COGS (production labor), where warehouse cost actually fell.
  • The gap is margin. Gross profit fell from to year-over-year (Jan–May) on higher landed product cost. That of lost gross profit is the increase in the operating loss.
Reconciling with Market segments (). No contradiction — a different lens. That page tracks booked order value (credited when an order is placed); this page tracks recognized GL revenue (posted when it's invoiced / shipped). Three differences bridge the two: (1) basis — on the identical Jan–May window they read booked vs recognized, a ~-point gap that is orders converting to shipped revenue more slowly — a building backlog (see Department latency); (2) period — the segments H1 figure includes June bookings, while the GL's June revenue hadn't posted at extract time, so this page stops at May; (3) scope — segments excludes Costco and counts full order value, whereas the GL is all customers, net of returns & discounts. Bookings up + recognized revenue down is the same story told twice: demand is fine, conversion and margin are the problem.
The bottom line. MV Sport is not a healthy business with a payroll problem — it's a shrinking business with a margin problem. Revenue has slid for four straight years and gross margin with it (28% → ), turning a near-break-even division into a widening operating loss (~ run-rate in 2026). Costs are already flat; the fix has to come from the top two lines — price and landed cost — because that is where the money is leaking. The operational pages (segments, order flow, department latency, decoration) show a capable, stable operation underneath; the financial problem is what it earns per dollar of goods, not how much it sells or spends.
Source & scope. Business Central GL, company DPS PROD, List_GeneralLedgerEntries_QRY30300, global dimension 1 = division 02 (MV Sport). Amounts are signed (income credited); revenue and margins flip credits to positive. P&L classes: net revenue 50100–50400, COGS 60110–60900 (product/landed, decoration, warehouse), opex 70100–80920. June 2026 is excluded — the extract predated its revenue posting — so all 2026 figures are Jan–May (five months), compared like-for-like to Jan–May of prior years; "2026e" annualizes them ×12/5.