Weak ProfitabilityVery thin operating margins and consecutive net losses, despite a high gross margin, point to persistent structural cost, SG&A or non-operating pressures. Until the company delivers sustained margin recovery from its cost-savings program, earnings volatility will limit free earnings power and the ability to consistently fund growth or restore returns.
Americas & Brand Impairment RiskA goodwill impairment in the Americas and a sharp drop in a key brand signal deeper market or positioning issues that are not transitory. These structural weaknesses can permanently reduce asset values, necessitate further restructuring, and create execution risk for restoring market share and profitability in important regions.
Low/volatile Revenue GrowthTop-line has shown low growth and periodic declines, with exposure to travel retail and China creating cyclical volatility. Reliance on recovery in challenged channels and a few high-variance brands increases the risk that revenue and margin recovery will be slower or more uneven than planned, complicating long-term margin sustainability.