Team,
Thank you for everything you put into 2025. As we prepare for reviews, we wanted to take a moment first to share some insights about the year — because you’re a part of this company, and we want you to see the full picture. We also want to emphasize nothing below is possible without each of your contributions.
This report is an honest look at the past four years: what we’ve invested in, what we’ve built, and where we’re going. We’re proud of what this team has accomplished. Looking ahead, our focus is on growing the team’s capabilities, building systems and automations that allow the business to scale, and positioning Dutton Brown to grow revenue and profit — so that we can continue to create job security and new opportunities for everyone here.
We hope we’re able to continue to work together this year and beyond as we strive to build a stronger team and business. Feel free to ask us if you have any questions.
— Thomas & Zach
Revenue tells one part of the story. What we invested in — and why — tells the rest.
Post-Covid demand pushed us to our limits in our old space. We started looking for room to grow, and near the end of the year we found 1995 Oakcrest — a building roughly four times the size. This was the year we bet on the future.
Net margin: 31%We bought 1995 Oakcrest in February and moved in by May. Revenue grew +11%, still riding post-Covid momentum in home spending. But the move came at a cost — we lost much of our team due to the relocation and faced significant challenges setting up powder coating equipment. Short-staffed with a growing order queue, we cut roughly 20% of our product catalog to simplify operations and focus on what sells. Operating expenses rose significantly as we scaled up the building, marketing, and infrastructure.
Revenue: +11.1% vs 2022 Net margin: 22% ~20% of products cutRevenue dipped -3.9% as we felt the impact of the product cuts and market headwinds. Near the end of the year, several key employees departed. We used this as an opportunity to refocus on communication, culture, and building a team-first environment. Net margin compressed further as we continued investing in the business.
Revenue: -3.9% vs 2023 Net margin: 14%Revenue recovered +2.6% vs 2024 — but the bigger story was what we built. We grew the team from 7 to 12 and invested in the people, systems, and facility that position us for what’s next.
We added five new team members:
What we built along the way:
| 2022 | 2023 | 2024 | 2025 | Q1 ’26 | |
|---|---|---|---|---|---|
| Revenue vs Prior Year | — | +11.1% | -3.9% | +2.6% | +8.7% |
| Net Margin | 30.6% | 22.0% | 14.3% | 14.2% | TBD |
| Category | 2023 | 2024 | 2025 |
|---|---|---|---|
| Lighting | 81.2% | 84.3% | 83.6% |
| Hardware | 9.8% | 9.3% | 9.4% |
| Shipping | 3.6% | 1.1% | 0.9% |
| Expedite Fees | 0.9% | 1.0% | 1.3% |
| Light Bulbs | 1.0% | 1.1% | 1.1% |
| Other | 3.4% | 3.2% | 3.6% |
Other includes: Room & Board wholesale, samples, product fees, Redo package protection, and pillows.
Where did the margin go? Into the people and infrastructure that make this company work:
| Investment Area | 2022 | 2023 | 2024 | 2025 | 2026 (proj.) |
|---|---|---|---|---|---|
| Payroll & Benefits | $719,748 | $695,185 | $750,860 | $793,424 | $962,055 |
| Marketing & Advertising | $232,742 | $261,092 | $321,199 | $336,714 | $404,057 |
| Facility (Rent) | $120,000 | $260,913 | $312,000 | $312,000 | $312,000 |
| Facility Upgrades | $9,068 | $16,496 | $14,656 | $44,202 | TBD |
2026 projections assume 20% growth in marketing spend, stable facility rent, and full-year payroll for all 12 current team members including raises. Facility upgrades are TBD based on planned projects.
Every dollar shown above is a deliberate choice to build something that lasts — investing in our people, the marketing to keep growing, a facility we’re proud to work in, and the improvements to make it even better.
While margins have remained near flat, we are committed to continuing to offer competitive wages and enhanced benefits. We are planning cost-of-living raises for every team member who was part of the Dutton Brown team in 2025. Some team members may receive an additional adjustment to make their wage competitive with the market.
| Benefit | 2025 Policy | 2026 Policy |
|---|---|---|
| PTO — Years 1–5 | 2–3 weeks (varies by tenure) | 3 weeks (15 days) for all |
| PTO — Year 6+ | 4 weeks | 4 weeks (20 days) |
| How PTO Accrues | Based on hours worked | Fixed rate per paycheck |
| Total Paid Holidays | 8 holidays | 10 holidays (+Pride Monday + floating) |
Minnesota’s PFML program takes effect in 2026. Dutton Brown is stepping up:
This section reports on units produced and shipped — how many individual products our team built. Revenue percentages are covered in the Financial Health section above.
Lighting units declined modestly as we implemented price increases. The category mix remained stable — sconces continue to dominate at 58% of the category, and flush mounts gained share.
| Type | 2024 | Share | 2025 | Share | +/− | Change |
|---|---|---|---|---|---|---|
| Sconce | 4,513 | 57.8% | 4,311 | 58.3% | -202 | -4.5% |
| Flush Mount | 1,491 | 19.1% | 1,515 | 20.5% | +24 | +1.6% |
| Pendant | 991 | 12.7% | 932 | 12.6% | -59 | -6.0% |
| Chandelier | 547 | 7.0% | 491 | 6.6% | -56 | -10.2% |
| Plug-in | 263 | 3.4% | 140 | 1.9% | -123 | -46.8% |
| Total | 7,805 | 100% | 7,389 | 100% | -416 | -5.3% |
Hardware grew +6.7% year-over-year, with pulls and knobs both gaining share. Towel racks saw strong growth at +18%. This category is simpler to assemble, doesn’t require electrical testing, and is a key growth area for 2026.
| Type | 2024 | Share | 2025 | Share | +/− | Change |
|---|---|---|---|---|---|---|
| Pull | 2,744 | 50.0% | 3,014 | 51.5% | +270 | +9.8% |
| Knob | 1,115 | 20.3% | 1,282 | 21.9% | +167 | +15.0% |
| Hook | 949 | 17.3% | 852 | 14.6% | -97 | -10.2% |
| Towel Rack | 375 | 6.8% | 443 | 7.6% | +68 | +18.1% |
| Tissue Holder | 128 | 2.3% | 115 | 2.0% | -13 | -10.2% |
| Hand Towel Bar | 103 | 1.9% | 79 | 1.3% | -24 | -23.3% |
| Towel Bar | 73 | 1.3% | 67 | 1.1% | -6 | -8.2% |
| Total | 5,487 | 100% | 5,852 | 100% | +365 | +6.7% |
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Extension Rods | 1,387 | 1,202 | -13.3% |
| Samples Shipped | 1,864 | 1,976 | +6.0% |
| Light Bulbs | 1,631 | 1,840 | +12.8% |
Extension rods declined as customers shifted toward fixtures that don’t require them. Samples grew 6%, reflecting continued interest from new customers and trade members. Light bulbs grew nearly 13% — a category we’re planning to expand further in 2026.
Color products now represent 83% of all units sold, up from 80% the year before. Color defines our brand — it’s what makes Dutton Brown, Dutton Brown.
Beyond the team growth, systems, and facility improvements covered above — here are additional milestones we hit in 2025:
Four things make that happen:
Expand hardware, grow trade, improve email and ad performance
Measure what matters. Scorecards and KPIs to track performance. ERP to automate inventory. Cross-train to handle 40% more volume.
Notion as the operating system. If a new team member can’t learn the job from what’s in Notion, we have work to do
Clearer roles, better training, more ownership at every level
After two team members departed early in 2026, we moved quickly — hiring Scottie as Powder Coater and Sarah as Assembler to keep production running strong.
Here’s what we’ve already accomplished in Q1:
We’re incredibly proud of what this team has accomplished. We’ve maintained a healthy business through a challenging economic environment, expanded our product line, improved our facility, and are each contributing to evolving a culture of problem solving.
2026 is our year to be intentional. To build the infrastructure. To grow smart. To take care of each other.
And, of course, to make it cute.
Thank you for being part of Dutton Brown. Let’s go.
— Thomas & Zach