Plunging Free Cash FlowA nearly 80% drop in free cash flow materially weakens internal funding for capex, working capital and dividends. Persistently compressed cash generation would force greater reliance on external financing, constrain strategic investments, and reduce resilience to supplier or demand shocks over the medium term.
Declining Operational MarginsFalling EBIT and thin net margins, despite revenue growth, point to cost pressures or pricing erosion in a competitive apparel sourcing market. If operational efficiency is not restored, margin compression could persist, limiting free cash flow recovery and the company's ability to invest in higher‑margin services or technology.
Rising LeverageAn uptick in debt-to-equity to 0.42, while still moderate, reduces financial flexibility. Combined with weaker cash flow, higher leverage raises refinancing and interest risks, making the company more vulnerable to cost-of-capital increases and limiting its ability to pursue opportunistic investments during industry cycles.