TCM – 1Q19 results registered contrasting topline and bottomline growth – Earnings Update

• Strong 1Q19 topline performance exceeded our expectations.
• However, 1Q19 net profit fell 12.4% yoy due to contracting gross margin and rising SG&A expenses.
• Possibility of collecting Sears’ receivables is unclear.
• Terms of payment are being re-negotiated to mitigate risk of uncollectable receivables, starting with 2 clients Sears and Eddie Bauer.

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