Multi-year Revenue DeclinePersistent top-line contraction erodes scale benefits, reduces bargaining power with suppliers, and raises per-unit fixed costs. If revenue declines continue, pressure on store economics and digital fulfillment margins intensifies, making durable recovery harder without structural change.
Compressed ProfitabilityA material and sustained margin compression reduces cash available for reinvestment and debt reduction. Low-single-digit margins leave limited buffer for cost inflation or demand shocks, increasing vulnerability and requiring persistent operating improvements to restore historical profitability.
Moderate-to-elevated LeverageDebt near or above equity increases sensitivity to earnings volatility and limits strategic flexibility. Elevated leverage raises refinancing and interest-rate risk, constrains capital allocation choices, and makes margin or revenue setbacks more likely to pressure solvency or investment plans over the medium term.