Top-line VolatilitySignificant swings in revenue, including a sharp 2023 drop and only modest recovery, indicate that demand and assortment execution are not yet fully stable. Persistent top-line variability undermines margin durability and makes future cash flows and investment paybacks harder to predict.
Inconsistent Free Cash Flow HistoryAlthough recent years show positive cash flow, the meaningful FCF drop in 2025 and past negative years reveal unstable cash conversion. This inconsistency limits confidence in ongoing self-funded growth and raises risk around funding inventory spikes, marketing cycles, or absorbing demand shocks.
Residual Leverage RiskEven with a better 2025 ratio, historical periods of debt exceeding equity show limited headroom. For a fashion retailer with seasonal cash needs and return risk, remaining leverage can constrain strategic moves and heighten vulnerability if sales or margins deteriorate.