Declining Free Cash FlowFalling free cash flow is a durable concern because it reduces the company’s ability to fund inventory, refurbishment, digital investments, or pay down debt. Persistent FCF erosion limits strategic flexibility, elevates reliance on external financing, and can force cost cuts that harm long-term growth initiatives.
Rising Leverage And Lower ROEHigher debt levels combined with materially lower ROE point to deteriorating capital efficiency and heightened financial risk. Increased leverage raises interest obligations, reduces cushion for earnings volatility, and constrains capital allocation choices, pressuring long-term shareholder returns if profitability does not recover.
Weak Revenue TrendA negative revenue growth rate indicates structurally weaker demand or market share loss. Sustained top-line declines undermine fixed-cost absorption in retail, compress operating margins, and make it harder to finance omnichannel investments. Reversing this is critical for restoring durable profitability.