Low Net Profit MarginA net margin near 1.4% leaves limited earnings after operating and non-operating costs, constraining retained earnings for reinvestment and slowing balance sheet repair. Persistently low net profitability reduces resilience to cost shocks and limits the firm's ability to accelerate strategic investments or return capital.
Declining Free Cash FlowA decline in free cash flow growth signals reduced surplus cash after investments, which erodes financial flexibility. Over a multi-month horizon this can limit store openings, hamper debt paydown, or force higher external financing, increasing vulnerability to higher borrowing costs or slower revenue environments.
Rising Debt LevelsThough current leverage is moderate, the trend of rising total debt increases interest and refinancing exposure. If revenue growth or margins falter, higher debt amplifies downside risk, constrains strategic choices, and reduces the company's ability to respond to industry disruption or invest in technology and rollout initiatives.