Weekly Advisory Brief
Week Ending: February 14, 2026
What Changed This Week
- Cash position decreased by $180K due to inventory restocking and Q4 tax payment
- Gross margin improved 0.4% through SKU mix optimization and supplier renegotiation
- AR aging increased slightly with 3 accounts moving past 60-day terms
- Inventory turns accelerated to 7.2x from 6.9x with improved sell-through
- EBITDA compressed 0.5% due to increased marketing spend for spring campaign
- Working capital remained stable despite seasonal inventory build
Exposure Movement
| Exposure | Last Week | This Week | Direction | Comment |
|---|---|---|---|---|
| Liquidity Coverage | 3.1 months | 2.8 months | Declined | Tax payment and inventory build reduced coverage |
| Gross Margin | 34.5% | 34.9% | Improved | Supplier renegotiation yielding results |
| AR Aging | 38 days | 42 days | Declined | 3 accounts require collection follow-up |
| Inventory Velocity | 6.9x | 7.2x | Improved | Strong sell-through in key categories |
Forward 90-Day Outlook
Liquidity Trajectory
Current burn rate projects cash coverage falling below 2 months by mid-Q2 without intervention. Recommend accelerating AR collections and evaluating short-term credit facility to maintain 4+ month buffer.
Margin Sensitivity
Supplier cost increases expected to compress margin by 1.5-2% over next 90 days. Pricing strategy review and contract renegotiation with top 5 suppliers should be prioritized to protect margin floor.
Concentration / Volatility
Top 3 SKUs represent 42% of revenue with seasonal demand patterns. Diversification strategy and safety stock optimization recommended to reduce concentration risk during off-peak periods.
Advisory Discussion Agenda
- 1What is the acceptable floor for liquidity coverage, and what triggers should initiate credit facility activation?
- 2How much pricing power exists in current market conditions to offset supplier cost increases?
- 3Which AR accounts require escalated collection efforts, and what is the expected recovery timeline?
- 4Should inventory build continue at current pace, or should we adjust for liquidity preservation?
- 5What is the ROI expectation for the spring marketing campaign, and how will we measure effectiveness?
Recommended Next Step
Schedule your advisory review call to discuss these insights
Next Advisory Review: February 21, 2026 at 2:00 PM EST