Sharp Cash‑Flow DeteriorationA large step‑down in operating and free cash flow materially reduces near‑term financial flexibility, raising reliance on working‑capital improvements or external financing. Persistent cash volatility undermines the durability of buybacks/dividends and constrains reinvestment over several quarters.
FX & Tariff HeadwindsMaterial and recurring FX translation effects plus non‑mitigated tariff costs directly compress reported growth and operating profit. These structural external risks complicate multi‑year planning, can dilute margin progress, and may persist across reporting periods absent geopolitical or policy changes.
Inventory & Working‑Capital PressureElevated inventories tied up cash and heighten markdown risk in a promotional market. Even if management expects normalization, the working‑capital strain materially contributed to 2025 cash declines and may pressure margins and cash conversion for multiple quarters during destocking.