Margin DeteriorationNet margin compression to ~6.4% despite revenue recovery shows profitability has not kept pace with scale. Persistent margin erosion suggests weaker pricing power, higher costs, or promotional pressure, limiting sustainable earnings growth and long-term return generation.
Weak Cash Conversion MomentumOperating cash flow converts only ~65% of EBIT and free cash flow growth is negative, indicating cash conversion weakness. This can constrain funding for capex, store expansion, and working-capital needs during seasonal travel cycles, raising execution and liquidity risk.
Declining Returns On EquityROE has fallen to ~6.1% from prior-year levels, reflecting reduced profitability on a growing equity base. Lower ROE signals diminished capital efficiency and makes it harder to deliver attractive shareholder returns absent margin recovery or improved asset turns.