Historical Earnings VolatilityMulti‑year history of large losses means the recent profit swing may yet prove cyclical. Persistent volatility undermines visibility into sustained margin improvement, raising execution risk: management must demonstrate repeatable profitability to lock in gains.
FCF VolatilityA sharp FCF decline after a year of improvement, plus prior negative periods, reduces predictability of internal funding. In luxury retail, uneven cash conversion constrains consistent inventory investment, marketing spend, and limits ability to build a durable growth runway.
Modest Return On EquityEven with a strong equity base, modest ROE signals limited capital efficiency. Over the medium term this can cap shareholder returns and suggest the company may struggle to convert its conservative capitalization into advantaged growth versus better‑rotating luxury peers.