Negative Free Cash FlowLatest-year negative free cash flow signals capex or investment intensity outpacing operating cash generation; if sustained this forces external financing or asset sales, constrains strategic flexibility, and raises the bar for investments to deliver long-term cash returns.
Net Margin DeclineA falling net margin despite stable gross/EBIT margins implies higher operating expenses, interest, taxes, or one-offs eroding bottom-line results. Persistent net margin pressure reduces retained earnings and ROE, weakening the company’s ability to self-fund growth and returns over time.
Leverage RiskMaterial leverage raises sensitivity to rate hikes and revenue slowdowns, increasing refinancing and liquidity risk. High debt limits strategic options for M&A or capex, may force deleveraging during downturns, and can amplify downside to equity in a prolonged leisure industry slump.