Moderate Net Profit MarginNet margin under 10% leaves limited buffer against rising input, shipping, or labor costs. In a cost-up environment or if promotional pricing is needed to defend share, profitability could compress materially, impacting durable earnings power.
Cyclical, Discretionary End MarketOperating in apparel and accessories exposes revenue to consumer discretionary cycles and seasonal swings. Economic slowdowns or weaker consumer spending can durably reduce demand and strain revenue visibility for several quarters.
Asset-management Vigilance NeededManagement warning to monitor asset management implies potential working-capital or inventory risks. If receivables or inventory build unexpectedly, cash conversion and returns could deteriorate, undermining the benefits of low leverage and strong FCF.