Thin Absolute MarginsDespite recent margin gains, absolute operating and net margins remain low relative to typical buffers, leaving profits vulnerable to commodity inflation, wage pressure or retailer price negotiation. Limited margin headroom reduces ability to absorb shocks and constrains long-term profitability resilience.
Elevated LeverageLeverage remains moderate-to-elevated with debt modestly above equity, limiting financial flexibility. Higher debt burdens heighten refinancing and interest-rate sensitivity, constrain capacity for opportunistic investment or M&A, and increase downside risk if margins or cash flow deteriorate.
Inconsistent Free Cash Flow ConversionCash conversion has been uneven, with FCF roughly half of net income in 2026 and past large deficits. Volatile working capital and investment swings undermine reliable internal funding for capex, dividends or debt paydown, potentially forcing external financing during downturns and limiting strategic optionality.