HARBOR LANE BICYCLES
Third-quarter operations report, July to September 2026
Prepared for the board by the finance and operations team. Fictional company: this document is an original test fixture by What the tech.

1. HEADLINE RESULTS
Revenue for the quarter was $4.82 million, up 11 percent on the third quarter of 2025. We sold 3,940 bicycles across our existing five stores and online. Electric bikes made up 38 percent of revenue, against 31 percent a year ago.

The return rate fell to 2.7 percent of units sold, from 3.4 percent in the second quarter. About a fifth of customer complaints concerned delivery delays, mostly in August.

2. STORES
We opened our sixth store, in Tacoma, on August 4. Tacoma's sales are reported separately this quarter while the store settles in, so the 3,940 units above do not include it. Tacoma sold 212 bicycles in its first eight weeks.

Foot traffic in the two Seattle stores was flat. Online orders grew faster than store sales for the third quarter in a row.

3. SUPPLY AND INVENTORY
We moved our brake components from Velox Parts to Brennan Cycle Supply in September after two late deliveries. The switch cost $41,000 in one-off tooling, which is included in operating costs.

We wrote down $86,000 of older inventory, mainly 2024 road frames that no longer sell at full price. The write-down reduces this quarter's profit but has no cash effect.

4. PEOPLE
The warehouse team grew from 39 to 46 people to handle online orders and the Tacoma store. Average overtime per warehouse employee fell by roughly a third after the new hires started.

5. PRICES
Management is reviewing a price increase of up to 4 percent on electric models for 2027. No decision has been made and none will be made before the January board meeting.

6. OUTLOOK
We expect fourth-quarter revenue between $5.1 million and $5.4 million, including Tacoma. The range is wide because holiday demand for electric bikes was unusually volatile last year.

7. CONTACTS
Questions about this report: Dana Ortiz, chief financial officer.

Note: all figures are unaudited.