High Leverage And Weak Equity ReturnsElevated leverage limits financial flexibility, raises interest burden and refinancing risk, and constrains capital allocation. Negative ROE shows capital destruction, undermining the firm's ability to fund growth or weather shocks without materially changing capital structure or asset strategy.
Negative Net And Operating MarginsCore operations are loss-making despite revenue growth, indicating structural inefficiencies in cost base, pricing, or store economics. Persistent negative operating margins threaten sustainable earnings generation and limit capacity to self-fund investments or rebuild balance sheet strength.
Severe Decline In Free Cash Flow GenerationA near-collapse in free cash flow dramatically reduces liquidity and the ability to service debt, invest in omnichannel or remodel stores, or return capital. If sustained, this forces reliance on external financing or asset dispositions, raising long-term execution risk.