Here's your full operating review package with budget vs actual analysis for FY2025:

## Full Year P&L Line-by-Line (YTD 2025)

| Line Item | Actual | Budget | Variance | Direction |
| --- | --- | --- | --- | --- |
| Revenue | $11,238K | $11,600K | ($362K) | Unfavourable (3.1%) |
| Cost of goods sold | $7,947K | $8,143K | $196K | Favourable (2.4%) |
| Freight out | $377K | $348K | ($29K) | Unfavourable (8.3%) |
| **COGS Total** | **$8,324K** | **$8,491K** | **$167K** | **Favourable (2.0%)** |
| Salaries and wages | $1,562K | $1,524K | ($38K) | Unfavourable (2.5%) |
| Rent and occupancy | $431K | $408K | ($23K) | Unfavourable (5.6%) |
| Marketing | $94K | $132K | $38K | Favourable (28.5%) |
| Technology | $143K | $168K | $25K | Favourable (15.0%) |
| Professional fees | $97K | $96K | ($1K) | Unfavourable (1.4%) |
| Depreciation | $79K | $78K | ($1K) | Unfavourable (1.5%) |
| Other operating | $120K | $120K | $0.1K | Favourable (0.1%) |
| **Operating Expenses Total** | **$2,527K** | **$2,526K** | **($1K)** | **Unfavourable (0.03%)** |
| **Gross Profit** | **$2,914K** | **$3,109K** | **($194K)** | **Unfavourable (6.3%)** |
| **Gross Margin %** | **25.9%** | **26.8%** | **(0.9) pts** | |
| **Operating Income** | **$388K** | **$583K** | **($195K)** | **Unfavourable (33.5%)** |

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## December P&L Line-by-Line

| Line Item | Actual | Budget | Variance | Direction |
| --- | --- | --- | --- | --- |
| Revenue | $827K | $824K | $3K | Favourable (0.4%) |
| Cost of goods sold | $584K | $578K | ($6K) | Unfavourable (1.0%) |
| Freight out | $27K | $25K | ($3K) | Unfavourable (10.8%) |
| **COGS Total** | **$611K** | **$603K** | **($8K)** | **Unfavourable (1.4%)** |
| Salaries and wages | $128K | $128K | ($0.3K) | Unfavourable (0.3%) |
| Rent and occupancy | $34K | $34K | $0.2K | Favourable (0.5%) |
| Marketing | $7K | $10K | $3K | Favourable (34.2%) |
| Technology | $10K | $14K | $4K | Favourable (25.2%) |
| Professional fees | $6K | $6K | ($0.3K) | Unfavourable (5.6%) |
| Depreciation | $7K | $7K | ($0.1K) | Unfavourable (1.5%) |
| Other operating | $16K | $10K | ($6K) | Unfavourable (59.5%) |
| **Operating Expenses Total** | **$208K** | **$208K** | **$0.4K** | **Favourable (0.2%)** |
| **Gross Profit** | **$215K** | **$221K** | **($5K)** | **Unfavourable (2.4%)** |
| **Gross Margin %** | **26.1%** | **26.8%** | **(0.7) pts** | |
| **Operating Income** | **$8K** | **$13K** | **($5K)** | **Unfavourable (38.0%)** |

---

## Variance Commentary

**Headline:** YTD 2025 revenue was $11,238K against a $11,600K budget, unfavourable by ($362K), or (3.1%); operating income $388K against $583K, unfavourable by ($195K), or (33.5%).

**Drivers:**
- Revenue shortfall of ($362K), or (3.1%), concentrated in mid-year: March ($123K), July ($132K), and August ($105K) each underperformed budget, suggesting demand softer than forecast.
- Salaries and wages ran ($38K) over budget, or (2.5%), and Rent and occupancy overran by ($23K), or (5.6%), offsetting most operational gains elsewhere.
- Cost of goods sold beat budget by $196K, or 2.4%, but Freight out costs exceeded plan by ($29K), or (8.3%), reducing the COGS benefit to $167K net.
- Marketing and Technology spending came in well under budget at $38K, or 28.5%, and $25K, or 15.0%, respectively.

**December month:** Revenue of $827K beat the $824K budget by $3K, but operating income fell short at $8K versus $13K due to COGS pressure and elevated other operating costs, which jumped to $16K against a $10K plan.

The full analysis is saved to `output/bva-note.md` for your operating review on Thursday.