Taking Stock With Teens. A Collaborative Consumer Insights Project, Spring 2015

Transcription

1 Taking Stock With Teens A Collaborative Consumer Insights Project, 2015

2 Disclosures Disclosures for universes of: Stephanie Wissink, Neely Tamminga, Erinn Murphy, Sean Naughton, Nicole Miller Regan, Gene Munster, Peter Keith, Mike Olson, and James Marsh: 1. I or a household member have a financial interest in the securities of the following companies: none 2. I or a household member is an officer, director, or advisory board member of the following companies: none 3. I have received compensation within the past 12 months from the following companies: none 4. Piper Jaffray or its affiliates beneficially own 1% or more of any class of common equities of the following companies: Olson: GLUU 5. The following companies have been investment banking clients of Piper Jaffray during the past 12 months: Tamminga: W; Murphy: GIII, GPRO; Naughton: SFS; Miller Regan: DFRG, FLKS, HABT, NDLS, PLAY, ZOES; Keith: BOOT, CONN, FOXF, MIK, SPWH; Munster: ATHM, DL, DSKY, FB, FUEL, JD, JMEI, MCHX, WB; Olson: CHGG, KING, WBAI; Marsh: AMC, CIDM, ENT 6. Piper Jaffray expects to have the following companies as investment banking clients within the next three months: Miller Regan: FLKS, HABT, PLAY; Keith: MIK; Marsh: ENT 7. Other material conflicts of interest for Piper Jaffray regarding companies in my universe for which I am aware include: Naughton: SFS: underwriting; Miller Regan: FLKS, HABT, PLAY, ZOES: underwriting; Keith: BOOT, CONN, FOXF, MIK, SPWH: underwriting; Munster: DL, DSKY, JD, JMEI, MCHX, WB: underwriting; Olson: KING: underwriting; Marsh: CIDM, ENT: underwriting; Murphy: GIII, GPRO: underwriting 8. Piper Jaffray received non-investment banking securities-related compensation from the following companies during the past 12 months: Tamminga: HSNI, KIRK; Naughton: NGVC; Miller Regan: PLKI; Munster: WWWW; Olson: UEIC; Marsh: LGF, SNI; Murphy: CROX 9. Piper Jaffray makes a market in the securities of the following companies, and will buy and sell the securities of these companies on a principal basis: Wissink: AVP, COTY, HAS, IPAR, JAKK, LF, MAT, NWL, PLCE, SBH, SUMR, ULTA; Tamminga: AEO, ANF, ANN, ASNA, CBK, CHS, EXPR, GMAN, GPS, JCP, JWN, KIRK, KSS, LB, RH, ROST, TLYS, URBN, VRA, VVTV, ZU, ZUMZ; Murphy: BDE, COH, CROX, DECK, FINL, FL, FOSL, GCO, GES, GIII, GPRO, KORS, NKE, PVH, SHOO, SQBG, UA, VNCE, WWW; Naughton: BDBD, BGS, CLUB, COST, GPRO, HAIN, LTM, NGVC, SFM, TFM, TGT, UNFI, VSI, WFM; Miller Regan: BBRG, BJRI, BKW, CAKE, DFRG, DNKN, DRI, EAT, FLKS, FRGI, HABT, IRG, MCD, NDLS, PBPB, PLKI, PNRA, QSR, RUTH, SBUX, SONC, ZOES; Keith: BBY, BIG, BOOT, CAB, CONN, DG, DTLR, FDO, FOXF, HD, HGG, HIBB, LL, LOW, MFRM, MIK, SCSS, SKUL, SPWH, TPX, TSCO, TTS; Munster: APPL, AMZN, ANGI, BIDU, DRIV, DSKY, EBAY, FB, FUEL, GOOG, GRPN, JD, LNKD, LOGM, MCHX, MELI, RLOC, SINA, VIPS, WWWW, YELP, YHOO, YY; Olson: AKAM, ATVI, AWAY, CHGG, CTRP, DLB, EA, EXPE, GLUU, GME, KING, NFLX, OPEN, OUTR, PCLN, ROVI, TIVO, TRIP, TTWO, WBAI, ZNGA; Marsh: CBS, CIDM, CKEC, CMLS, DIS, DISCA, DWA, ENT, IMAX, IPG, LAMR, LGF, MDCA, NCMI, P, RGC, RLD, SIRI, VIAB 10. Piper Jaffray usually provides bids and offers for the securities of the following companies and will, from time to time, buy and sell the securities of these companies on a principal basis: Wissink: BBW, CRI, EL, HELE, JAH, RGS, TUP; Tamminga: HSNI, W, WSM; Murphy: RL, VFC; Naughton: WWAV; Miller Regan: CMG; Munster: ATHM, DL, JMEI, WB, YUME; Olson: UEIC; Marsh: AMC, AMCK, CNK, SNI Note: A Piper Jaffray officer, director or employee (other than the research analyst) is a member of the board of directors of DWA. 2 Taking Stock With Teens

3 Meet Our Team Steph Wissink Managing Director Sr. Research Analyst Universe: Household, Beauty, and Children s Products Sean Naughton Principal Sr. Research Analyst Universe: Healthy Living & Consumables Gene Munster Managing Director Sr. Research Analyst Universe: Internet Neely Tamminga Managing Director Sr. Research Analyst Universe: Multi-Brand Retail & Specialty Commerce Nicole Miller Regan Managing Director Sr. Research Analyst Universe: Restaurants Mike Olson Managing Director Sr. Research Analyst Universe: Online Content Erinn Murphy Principal Sr. Research Analyst Universe: Global Fashion & Lifestyle Brands Peter Keith Principal Sr. Research Analyst Universe: Hardlines Retail & Specialty Products James Marsh Managing Director Sr. Research Analyst Universe: Media & Entertainment 3 Taking Stock With Teens

4 Introduction Project Framework & Demographics Behaviors & Priorities Brand Preferences Winners & Losers Questions & Answers Appendix

5 Piper Jaffray Consumer Insights Depth of expertise anchored in primary research Restaurant Benchmark Book Taking Stock With Teens Taking Stock With Young Adults Event Based Surveys Millennial Moms Global Executive Sentiment Women Consumers Seasonal / Holiday Spending Lifestyle Trends Home Remodeling 5 Taking Stock With Teens

6 29th Semi-Annual Proprietary Teen Research Project National survey of teens measuring: Behaviors & Priorities Capacity & Intentions Brand Preferences 6,200 Total Responses 1,400 teens Classroom visits and electronic surveys UPPER-INCOME GROUP $104,000 Household income Represents top 20% of U.S. household units 16.3 Average Age 35% Part-Time Employed 4,800 teens Classroom visits and electronic surveys $56,000 Household income Aligns more closely with U.S. median LOWER-INCOME GROUP Survey is executed in partnership with DECA. 6 Taking Stock With Teens

7 Perceptions Of Their World Regional distribution skews to West More than 8% of total responses 5-8% of total responses 0-5% of total responses No responses Top 9 states = 63% Teens maintain a largely optimistic view of the economy Optimism soars by an additional 5ppts in the vs. 38% Economic Stability 65% Parent Contrib 37% Economic Prosperity 27% 41% 32% Getting Better Staying the Same Getting Worse Parent contribution to teen spending at 65%; consistent with last 3 years 7 Taking Stock With Teens

8 Teen Spending Improves Post Recession WALLET SHIFTS FROM POSSESSIONS TO EXPERIENCES Teens directly command $75B of discretionary spending 2008 recession was their first formative economic experience Teens became budget conscious, value seekers; exhibited brand selectivity Wallet share shift from possession based expressions to shareworthy experiences $3,023 26% pullback peak to trough 21% recovery $2,713 $2,234 Food 35% Clothing 65% Food 54% Clothing 46% 8 Taking Stock With Teens

9 Teen Years Are (Still) Formative Years TEEN SPENDING & PRIORITIES VARY BY AGE Rite of passage still exists some things never change Events, dining out and car-related expenses increase at age 16 Categories such as fashion and video games under-index RESPONSES BY AGE 14 7% 15 20% 16 26% 29% 17 17% 18 18% Spend on Car, Events, & Experiences 39% 40% Spend on Fashion and Gaming 29% Age 14 Age 15 Age 16 Age 17 Age 18 9 Taking Stock With Teens

10 A Shift In Prioritization: Upper-Income Spends More On Events ELECTRONICS AS % OF TEEN WALLET WALLET MIX DIFFERENCE: UPPER- VS. AVERAGE-INCOME Wallet Mix Difference: Upper To Average Income Average Income Teens allocating MORE of thier wallet Upper Income Teens allocating MORE of thier wallet 4% Electronics As % Of Teen Wallet Mobile Hardware Adoption Routine 2 YR Upgrade Cycle 8% 8% 7% Other Furniture Books/magazines Car Concerts & Events Food Shoes Access/Personal Care Clothing Electronics Music / movies Video games -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3 10 Taking Stock With Teens

11 A Shift In Channel Behavior: Teens Spending More Time Online WEEKS BETWEEN SHOPPING EVENTS SHOPPING CHANNEL PREFERENCES 1.9 Weeks Between Shopping Events 1.9 Shopping Channel Preferences Specialty Internet Taking Stock With Teens

12 Teens Increasingly Prefer To Shop Online Rather Than In Stores % RESPONDENTS WHO PREFER TO SHOP ONLINE VS. IN STORE (UPPER-INCOME, ALL) 100% Female Male 80% 60% 40% 20% 0% Taking Stock With Teens

13 But They Still Prefer Sites Associated With Stores Over etailers PREFERENCES WHEN PURCHASING CLOTHING ONLINE (UPPER-INCOME, ALL) 100% 80% 81% 60% 64% 64% 61% 40% 20% 0% Prefer Online-Only etailers Prefer Sites Of Retailers w/ Physical Stores 13 Taking Stock With Teens

14 Females Shopping For Accessories On Mobile; Males, Electronics MOBILE (BROWSER OR APP) PURCHASES BY CATEOGORY Accessories Clothing Personal Care Shoes Electronics 2015 Men Shop More Women Shop More 14 Taking Stock With Teens

15 Amazon Mindshare Steps Up Despite Already Large Presence 15 Taking Stock With Teens PREFERRED WEBSITES (UPPER-INCOME, ALL) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Amazon 36% 1 Amazon 32% 1 Amazon 31% 1 Amazon 31% 2 Nike 8% 2 Nike 8% 2 Nike 10% 2 ebay 8% 3 Forever 21 5% 3 ebay 5% 3 ebay 7% 3 Nike 5% 4 ebay 5% 4 Forever 21 5% 4 Forever 21 4% 4 Forever 21 4% 5 Victoria's Secret 3% 5 Urban Outfitters 2% 5 Victoria's Secret 3% 5 Urban Outfitters 3% 6 American Eagle 2% 6 Victoria's Secret 2% 6 Eastbay 2% 6 Nordstrom 3% 7 Urban Outfitters 2% 7 American Eagle 2% 7 American Eagle 2% 7 American Eagle 3% 8 Eastbay 1% 8 Nordstrom 2% 8 Urban Outfitters 1% 8 Eastbay 2% 9 Brandy Melville 1% PacSun 2% 9 Dick's Sporting Goods 1% 9 Victoria's Secret 2% 10 Wanelo 1% 10 Brandy Melville 2% Wanelo 1% 10 PacSun 2% Eastbay 2% PREFERRED WEBSITES (UPPER-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Amazon 23% 1 Amazon 21% 1 Amazon 26% 1 Amazon 25% 2 Forever 21 11% 2 Forever 21 10% 2 Forever 21 9% 2 Forever 21 9% 3 Victoria's Secret 8% 3 Victoria's Secret 5% 3 Victoria's Secret 7% 3 Nordstrom 6% 4 ebay 4% 4 Nordstrom 4% 4 American Eagle 4% Urban Outfitters 6% 5 American Eagle 4% 5 Brandy Melville 4% 5 ebay 4% 5 American Eagle 5% 6 Urban Outfitters 3% 6 Urban Outfitters 4% 6 Wanelo 3% 6 ebay 5% 7 Brandy Melville 3% 7 American Eagle 3% 7 Urban Outfitters 3% 7 Victoria's Secret 4% 8 Wanelo 3% 8 Wanelo 3% 8 Nike 3% 8 Wanelo 3% 9 Charlotte Russe 2% 9 ebay 2% 9 Hollister 2% 9 Etsy 3% 10 Nordstrom 2% 10 Hollister 2% lululemon 2% 10 Brandy Melville 2% TOBI 2% PREFERRED WEBSITES (UPPER-INCOME, MALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Amazon 47% 1 Amazon 40% 1 Amazon 34% 1 Amazon 35% 2 Nike 12% 2 Nike 13% 2 Nike 15% 2 ebay 10% 3 ebay 5% 3 ebay 7% 3 ebay 8% 3 Nike 9% 4 Eastbay 2% 4 Eastbay 3% 4 Eastbay 4% 4 Eastbay 4% 5 Steam 2% 5 PacSun 2% 5 Ralph Lauren 2% 5 PacSun 2% 6 American Eagle 1% 6 Dick's Sporting Goods 2% 6 Foot Locker 2% 6 CCS 2% Dick's Sporting Goods 1% 7 Foot Locker 1% 7 Dick's Sporting Goods 2% Ralph Lauren 2% 8 Foot Locker 1% 8 Ralph Lauren 1% 8 CCS 1% 8 Karmaloop 1% 9 Zappos 1% 9 Vineyard Vines 1% Finish Line 1% Zumiez 1% 10 PacSun 1% 10 Karmaloop 1% PacSun 1% 10 Three Sites Tied 1% Ralph Lauren 1% Urban Outfitters 1% Vineyard Vines 1%

16 Amazon Mindshare Steps Up Despite Already Large Presence MINDSHARE TRENDS FOR AMAZON & EBAY 40% Mindshare Trends For Amazon And ebay 35% 30% 25% 20% 15% Amazon ebay 10% 5% 0% Mindshare Trends Amazon 20% 23% 31% 31% 32% 36% ebay 6% 5% 8% 7% 5% 5% S ourc e : P ipe r Ja ffra y Te e n S urve y 16 Taking Stock With Teens

17 Instagram Remains Top For Teens; Snapchat Ramping Quickly MOST IMPORTANT SOCIAL NETWORK Most Important Social Network Change Instagram 17% 27% 30% 32% 2pp Twitter 30% 31% 27% 24% -3pp Facebook 33% 27% 23% 14% -9pp Snapchat 13% Tumblr 4% 5% 5% 4% -1pp Google+ 5% 4% 4% 1% -3pp Pinterest 2% 2% 2% 2% - Other 4% 2% 4% 8% 4pp Don't Use Social Networks 6% 3% 5% n/a 17 Taking Stock With Teens

18 Apple Still Top Tech Brand For Teens DEVICE OWNERSHIP Device Ownership Own an iphone 61% 67% 66% Expect next phone to be: iphone 67% 73% 72% Android 24% 19% 21% Blackberry 1% 1% 1% Other Smartphone 5% 5% 4% Non-Smartphone 3% 2% 2% Own a tablet computer 60% 63% 62% ipad 55% 54% 51% ipad Mini 11% 12% 13% Android Tablet 25% 16% 18% Windows Tablet 10% 10% Kindle Fire 9% 8% 7% Plan on buying a tablet computer in next 6 months 18% 19% 14% ipad 49% 46% 48% ipad Mini 17% 14% 12% Android Tablet 27% 16% 16% Windows Tablet 19% 20% Kindle Fire 8% 5% 4% Own A Smartwatch 6% 7% 5% Would buy Apple Watch 17% 16% 11% 18 Taking Stock With Teens

19 Fashion Athletic Gains Further Mindshare; Denim Yet To Turn AGGREGATE MINDSHARE BY CATEGORY (UPPER-INCOME, FEMALES) 25% Athleisure Denim 20% 20.2% 15% 14.4% 15.6% 10% 5.8% 8.3% 7.1% 10.2% 9.1% 5% 1.5% 0% 19 Taking Stock With Teens

20 Top-Trending Fashion Trends Right Now TOP FASHION TRENDS RIGHT NOW (UPPER-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Leggings / lululemon 33% 1 Leggings / lululemon 26% 1 Leggings / lululemon 31% 1 Leggings / lululemon 21% 2 Victoria's Secret / PINK 5% 2 Crop Tops 6% 2 Victoria's Secret / PINK 5% 2 High-Waisted Pants / Skirts 10% 3 Boots 4% 3 High-Waisted Pants / Skirts 6% 3 UGG Australia 5% 3 Maxi Dresses/Skirts 5% 4 UGG Australia 4% 4 Nike 4% 4 Boots 4% 4 Jeans / Skinny Jeans 4% 5 Nike 4% 5 Boots 3% 5 High-Waisted Pants / Skirts 3% 5 Crop Tops 3% 6 Crop Tops 3% 6 Victoria's Secret / PINK 3% 6 Combat Boots 3% 6 Dresses 3% 7 Converse 2% 7 Preppy 2% 7 Crop Tops 3% 7 Victoria's Secret / PINK 3% 8 High-Waisted Pants / Skirts 2% 8 UGG Australia 2% 8 Michael Kors 3% 8 Nike 3% 9 Birkenstock 2% 9 Converse 2% 9 Scarves 2% 9 Combat Boots 3% Dresses 2% Dresses 2% 10 Forever 21 2% 10 UGG Australia 2% TOP FASHION TRENDS RIGHT NOW (UPPER-INCOME, MALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike / Jordans 17% 1 Nike / Jordans 20% 1 Nike / Jordans 21% 1 Nike / Jordans 22% 2 Jogger Pants 10% 2 Preppy 11% 2 Ralph Lauren 10% 2 Shoes 7% 3 Ralph Lauren 9% 3 Ralph Lauren 10% 3 Boat Shoes 7% 3 Boat Shoes 6% 4 Preppy 8% 4 Tall Socks 8% Shoes 7% 4 Tall Socks 5% 5 Vineyard Vines 7% 5 Vineyard Vines 8% 5 Khakis / Chinos 4% 5 Ralph Lauren 4% 6 Khakis / Chinos 5% 6 Boat Shoes 8% 6 Athletic Wear 3% 6 Athletic Wear 3% 7 Athletic Wear 4% 7 Athletic Wear 4% Timberland 3% 7 Jeans / Skinny Jeans 3% 8 Timberland 4% 8 Khakis / Chinos 3% 8 Preppy 2% 8 Shorts 3% 9 Boat Shoes 3% 9 Chubbies 2% 9 Polos 2% 9 Snapback Hats 2% Tall Socks 3% 10 Jogger Pants 2% 10 Vineyard Vines 2% 10 Tank Tops 2% 20 Taking Stock With Teens

21 Nike Remains The Top Clothing Brand Among Upper-Income PREFERRED CLOTHING BRANDS (UPPER-INCOME, ALL) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 24% 1 Nike 22% 1 Nike 23% 1 Nike 19% 2 Forever 21 8% 2 American Eagle 8% 2 Forever 21 8% 2 Forever 21 7% 3 American Eagle 6% 3 Forever 21 7% 3 American Eagle 8% 3 American Eagle 7% 4 Ralph Lauren 4% 4 Ralph Lauren 6% 4 Ralph Lauren 6% 4 Ralph Lauren 6% 5 Victoria's Secret 4% 5 Urban Outfitters 4% 5 Hollister 3% 5 Urban Outfitters 4% 6 Urban Outfitters 3% 6 PacSun 4% 6 Urban Outfitters 3% 6 Nordstrom 3% 7 Hollister 2% 7 Hollister 2% Victoria's Secret 3% 7 PacSun 3% 8 Nordstrom 2% 8 Nordstrom 2% 8 PacSun 2% 8 Hollister 2% 9 Free People 2% 9 T.J. Maxx 2% Nordstrom 2% 9 Abercrombie & Fitch 2% PacSun 2% 10 Victoria's Secret 2% 10 Abercrombie & Fitch 2% 10 Victoria's Secret 2% Target 2% PREFERRED CLOTHING BRANDS (UPPER-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Forever 21 16% 1 Forever 21 14% 1 Forever 21 19% 1 Forever 21 16% 2 Victoria's Secret 7% 2 American Eagle 10% 2 American Eagle 9% 2 American Eagle 9% 3 American Eagle 7% 3 Urban Outfitters 7% 3 Victoria's Secret 6% 3 Urban Outfitters 8% 4 Nike 6% 4 PacSun 5% 4 Nike 5% 4 Nordstrom 6% 5 Urban Outfitters 5% 5 Nordstrom 5% 5 Urban Outfitters 5% 5 Hollister 4% 6 Nordstrom 4% 6 Victoria's Secret 4% 6 Hollister 5% 6 Victoria's Secret 3% 7 Free People 4% 7 Nike 4% 7 Nordstrom 4% 7 PacSun 3% 8 Hollister 3% 8 Free People 4% 8 Target 3% 8 Charlotte Russe 3% 9 PacSun 3% 9 Hollister 4% 9 lululemon 3% 9 Nike 3% 10 Four Brands Tied 2% 10 T.J. Maxx 3% PacSun 3% 10 H&M 2% PREFERRED CLOTHING BRANDS (UPPER-INCOME, MALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 40% 1 Nike 39% 1 Nike 37% 1 Nike 32% 2 Ralph Lauren 7% 2 Ralph Lauren 9% 2 Ralph Lauren 9% 2 Ralph Lauren 10% 3 American Eagle 4% 3 American Eagle 6% 3 American Eagle 7% 3 American Eagle 6% 4 Vineyard Vines 3% 4 PacSun 2% 4 Adidas 2% 4 PacSun 3% 5 Vans 2% 5 Vineyard Vines 2% Hollister 2% 5 Diamond Supply Co. 2% 6 Adidas 2% 6 Vans 2% PacSun 2% 6 Abercrombie & Fitch 2% Kohl's 2% 7 Adidas 2% 7 Vineyard Vines 2% Adidas 2% 8 J.Crew 2% 8 Under Armour 2% 8 Kohl's 2% 8 Vans 1% Under Armour 2% 9 Hollister 1% 9 Under Armour 2% 9 Hollister 1% 10 Hollister 2% Kohl's 1% 10 Diamond Supply Co. 1% 10 Express 1% Express 1% 21 Taking Stock With Teens

22 Nike Remains The Top Clothing Brand Among Average-Income PREFERRED CLOTHING BRANDS (AVERAGE-INCOME, ALL) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 19% 1 Nike 18% 1 Nike 18% 1 Nike 17% 2 Forever 21 7% 2 American Eagle 8% 2 Forever 21 8% 2 Forever 21 8% 3 American Eagle 7% 3 Forever 21 7% 3 American Eagle 7% 3 American Eagle 8% 4 Ralph Lauren 5% 4 Ralph Lauren 6% 4 Ralph Lauren 5% 4 Hollister 5% 5 Hollister 4% 5 Hollister 4% 5 Hollister 5% 5 Ralph Lauren 5% 6 Victoria's Secret 4% 6 PacSun 3% 6 Victoria's Secret 3% 6 Aeropostale 3% 7 PacSun 3% 7 Victoria's Secret 2% 7 PacSun 3% 7 PacSun 3% 8 H&M 2% 8 Aeropostale 2% 8 Aeropostale 3% 8 Victoria's Secret 2% 9 Kohl's 2% 9 Charlotte Russe 2% 9 Hot Topic 2% 9 The Buckle 2% 10 Three Brands Tied rue21 2% 10 Kohl's 2% 10 JCPenney 2% PREFERRED CLOTHING BRANDS (AVERAGE-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Forever 21 14% 1 Forever 21 14% 1 Forever 21 16% 1 Forever 21 17% 2 American Eagle 8% 2 American Eagle 9% 2 American Eagle 8% 2 American Eagle 9% 3 Victoria's Secret 8% 3 Nike 5% 3 Victoria's Secret 6% 3 Hollister 6% 4 Nike 6% 4 Hollister 5% 4 Hollister 5% 4 Victoria's Secret 5% 5 Hollister 5% 5 Victoria's Secret 5% 5 Nike 5% 5 Nike 4% 6 Charlotte Russe 4% 6 Charlotte Russe 4% 6 PacSun 3% 6 The Buckle 3% 7 Urban Outfitters 3% 7 rue21 3% 7 Aeropostale 3% 7 Charlotte Russe 3% 8 PacSun 3% 8 PacSun 3% 8 Charlotte Russe 3% 8 Aeropostale 3% 9 H&M 3% 9 Aeropostale 2% 9 rue21 2% 9 PacSun 3% 10 rue21 2% 10 Ralph Lauren 2% 10 T.J. Maxx 2% 10 T.J. Maxx 2% PREFERRED CLOTHING BRANDS (AVERAGE-INCOME, MALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 33% 1 Nike 30% 1 Nike 30% 1 Nike 30% 2 Ralph Lauren 8% 2 Ralph Lauren 10% 2 Ralph Lauren 9% 2 American Eagle 8% 3 American Eagle 6% 3 American Eagle 7% 3 American Eagle 6% 3 Ralph Lauren 8% 4 PacSun 3% 4 Hollister 4% 4 Hollister 4% 4 Hollister 5% 5 Hollister 3% 5 PacSun 3% 5 Aeropostale 3% 5 PacSun 3% 6 H&M 2% 6 Aeropostale 2% 6 PacSun 3% 6 Aeropostale 3% 7 Kohl's 2% 7 Levi's 2% 7 Levi's 2% 7 Adidas 2% 8 Adidas 2% Under Armour 2% 8 Vans 2% 8 Levi's 2% Vans 2% Vans 2% 9 Under Armour 2% Under Armour 2% 10 Aeropostale 2% 10 Adidas 1% 10 Hot Topic 2% 10 Express 2% 22 Taking Stock With Teens

23 Nike Remains The Top Footwear Brand Among Upper-Income PREFERRED FOOTWEAR BRANDS (UPPER-INCOME, ALL) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 46% 1 Nike 43% 1 Nike 49% 1 Nike 40% 2 Vans 9% 2 Vans 10% 2 Vans 10% 2 Vans 12% 3 Converse 5% 3 Converse 6% 3 Sperry Top-Sider 4% 3 Steve Madden 6% 4 DSW 3% 4 Sperry Top-Sider 5% 4 Converse 4% 4 Converse 5% Steve Madden 3% 5 Steve Madden 5% Steve Madden 4% 5 Sperry Top-Sider 4% 6 Sperry Top-Sider 3% 6 DSW 4% 6 DSW 3% 6 Adidas 3% 7 UGG Australia 2% 7 Nordstrom 2% 7 UGG Australia 3% 7 DSW 3% 8 Adidas 2% 8 Adidas 2% 8 Adidas 1% 8 UGG Australia 2% 9 Nordstrom 1% 9 UGG Australia 1% 9 Nordstrom 1% 9 Nordstrom 2% 10 Payless ShoeSource 1% 10 Payless ShoeSource 1% 10 Payless ShoeSource 1% 10 ALDO 2% PREFERRED FOOTWEAR BRANDS (UPPER-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 22% 1 Nike 19% 1 Nike 23% 1 Nike 14% 2 Converse 10% 2 Converse 11% 2 Vans 13% 2 Vans 13% 3 Vans 9% 3 Steve Madden 10% 3 Steve Madden 9% 3 Steve Madden 12% 4 DSW 7% 4 Vans 10% 4 Converse 7% 4 Converse 7% Steve Madden 7% 5 DSW 8% 5 DSW 6% 5 DSW 6% 6 UGG Australia 4% 6 Nordstrom 5% 6 UGG Australia 6% 6 UGG Australia 5% 7 Nordstrom 3% 7 Sperry Top-Sider 4% 7 Sperry Top-Sider 4% 7 Sperry Top-Sider 5% 8 Payless ShoeSource 3% 8 UGG Australia 3% 8 Nordstrom 3% 8 Nordstrom 4% 9 Sperry Top-Sider 2% 9 Payless ShoeSource 2% 9 Payless ShoeSource 3% 9 ALDO 3% 10 Famous Footwear 2% 10 Rainbow 2% 10 ALDO 2% 10 TOMS 2% TOMS 2% PREFERRED FOOTWEAR BRANDS (UPPER-INCOME, MALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 67% 1 Nike 63% 1 Nike 69% 1 Nike 61% 2 Vans 8% 2 Vans 11% 2 Vans 8% 2 Vans 11% 3 Sperry Top-Sider 3% 3 Sperry Top-Sider 5% 3 Sperry Top-Sider 4% 3 Adidas 5% 4 Adidas 3% 4 Adidas 3% 4 Adidas 2% 4 Sperry Top-Sider 4% 5 Converse 2% 5 Converse 2% 5 Foot Locker 2% 5 Converse 3% Foot Locker 2% 6 Ralph Lauren 1% 6 Converse 2% 6 Foot Locker 1% 7 New Balance 1% 7 Foot Locker 1% 7 New Balance 1% 7 Ralph Lauren 1% 8 Asics 1% 8 New Balance 1% 8 Champs Sports 1% 8 Asics 1% Ralph Lauren 1% 9 Dick's Sporting Goods 1% DC Shoes 1% 9 DC Shoes 1% 10 Clarks 1% Skechers 1% Reebok 1% 10 Finish Line 1% Timberland 1% Under Armour 1% 23 Taking Stock With Teens

24 Nike Remains The Top Footwear Brand Among Average-Income PREFERRED FOOTWEAR BRANDS (AVERAGE-INCOME, ALL) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 46% 1 Nike 46% 1 Nike 48% 1 Nike 48% 2 Vans 11% 2 Vans 11% 2 Vans 10% 2 Vans 9% 3 Converse 7% 3 Converse 5% 3 Converse 4% 3 Converse 4% 4 Sperry Top-Sider 3% 4 Sperry Top-Sider 4% 4 Sperry Top-Sider 3% 4 Sperry Top-Sider 4% 5 Adidas 2% 5 Steve Madden 3% 5 Adidas 2% 5 Adidas 3% 6 Steve Madden 2% 6 Adidas 2% 6 Steve Madden 2% 6 TOMS 2% 7 Foot Locker 2% 7 Foot Locker 2% 7 Foot Locker 2% 7 Steve Madden 2% 8 Payless ShoeSource 1% 8 UGG Australia 2% 8 Payless ShoeSource 2% 8 Foot Locker 2% 9 UGG Australia 1% 9 Payless ShoeSource 1% UGG Australia 2% 9 Payless ShoeSource 2% 10 Three Brands Tied 1% 10 TOMS 1% 10 TOMS 2% 10 Journeys 2% PREFERRED FOOTWEAR BRANDS (AVERAGE-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 30% 1 Nike 30% 1 Nike 31% 1 Nike 31% 2 Vans 12% 2 Vans 13% 2 Vans 11% 2 Vans 10% 3 Converse 10% 3 Converse 8% 3 Converse 6% 3 Converse 7% 4 Steve Madden 4% 4 Steve Madden 5% 4 Steve Madden 5% 4 Sperry Top-Sider 5% 5 Payless ShoeSource 3% 5 UGG Australia 3% 5 Sperry Top-Sider 4% 5 TOMS 5% 6 Sperry Top-Sider 3% 6 Sperry Top-Sider 3% 6 UGG Australia 3% 6 Steve Madden 4% 7 UGG Australia 2% 7 Payless ShoeSource 2% 7 Payless ShoeSource 3% 7 Payless ShoeSource 3% 8 Tory Burch 2% 8 TOMS 2% 8 TOMS 3% 8 Journeys 3% 9 DSW 2% 9 DSW 2% 9 DSW 3% 9 UGG Australia 3% 10 TOMS 2% 10 Jack Rogers 2% 10 Journeys 2% 10 DSW 2% Journeys 2% PREFERRED FOOTWEAR BRANDS (AVERAGE-INCOME, MALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 63% 1 Nike 62% 1 Nike 63% 1 Nike 64% 2 Vans 9% 2 Vans 9% 2 Vans 9% 2 Vans 8% 3 Sperry Top-Sider 4% 3 Sperry Top-Sider 4% 3 Adidas 4% 3 Adidas 4% 4 Adidas 3% 4 Adidas 3% 4 Sperry Top-Sider 3% 4 Sperry Top-Sider 3% 5 Converse 3% 5 Converse 2% 5 Converse 2% 5 Converse 2% 6 Foot Locker 2% 6 Foot Locker 2% 6 Foot Locker 2% 6 Foot Locker 2% 7 New Balance 1% 7 DC Shoes 1% 7 Ralph Lauren 1% 7 DC Shoes 1% 8 Ralph Lauren 1% 8 Finish Line 1% 8 New Balance 1% 8 Ralph Lauren 1% 9 DC Shoes 1% Ralph Lauren 1% 9 DC Shoes 1% 9 Puma 1% 10 Champs Sports 1% 10 Under Armour 1% 10 Asics 1% 10 Champs Sports 1% 24 Taking Stock With Teens

25 Uptrending Brands NEW BRANDS STARTING TO WEAR (UPPER-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 lululemon 6% 1 Brandy Melville 6% 1 Forever 21 5% 1 Forever 21 6% 2 Nike / Jordans 6% 2 American Eagle 6% 2 American Eagle 5% 2 American Eagle 5% 3 Victoria's Secret / 5% 3 Free People 5% lululemon 5% 3 Urban Outfitters 5% PINK 4 Forever 21 5% 4 PacSun 5% 4 Nike / Jordans 4% 4 Brandy Melville 5% 5 H&M 5% 5 Urban Outfitters 4% 5 Urban Outfitters 4% 5 Nike / Jordans 4% 6 American Eagle 4% 6 H&M 4% 6 Pacific Sunwear 4% 6 Victoria's Secret / 3% 7 Urban Outfitters 3% 7 Forever 21 4% 7 Victoria's Secret / 3% PINK 8 Free People 3% Nike / Jordans 4% PINK 7 H&M 3% 9 PacSun 3% 9 Hollister 4% 8 H&M 3% 8 J.Crew 3% 10 Express 3% 10 Vineyard Vines 3% Hollister 3% 9 Charlotte Russe 3% J.Crew 3% PacSun 3% NEW BRANDS STARTING TO WEAR (UPPER-INCOME, MALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike / Jordans 15% 1 Nike / Jordans 15% 1 Ralph Lauren 14% 1 Nike / Jordans 14% 2 Ralph Lauren 9% 2 Ralph Lauren 12% 2 Nike / Jordans 13% 2 Ralph Lauren 12% 3 Under Armour 6% 3 Under Armour 5% 3 American Eagle 5% 3 American Eagle 5% 4 Vineyard Vines 5% 4 American Eagle 5% 4 Under Armour 4% 4 Adidas 3% 5 American Eagle 4% 5 Vineyard Vines 5% 5 Adidas 3% 5 Under Armour 3% 6 Adidas 3% 6 Adidas 3% 6 Vans 2% 6 Vans 3% 7 Vans 3% 7 Vans 3% 7 The North Face 2% 7 Vineyard Vines 3% 8 Sperry Top-Sider 2% 8 Sperry Top-Sider 2% Vineyard Vines 2% 8 Diamond Supply Co. 2% 9 Express 2% 9 RVCA 2% 9 Express 2% 9 Levi's 2% Hollister 2% 10 H&M 2% 10 Diamond Supply Co. 1% 10 Express 2% J. Crew 2% 25 Taking Stock With Teens

26 Downtrending Brands BRANDS NO LONGER WORN (UPPER-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Aeropostale 28% 1 Aeropostale 28% 1 Aeropostale 32% 1 Aeropostale 25% 2 Abercrombie & Fitch 19% 2 Abercrombie & Fitch 21% 2 Abercrombie & Fitch 19% 2 Abercrombie & Fitch 22% 3 Justice / Limited Too 14% 3 Justice / Limited Too 11% 3 Hollister 16% 3 Hollister 15% 4 Hollister 11% 4 Hollister 10% 4 Justice / Limited Too 8% 4 Justice / Limited Too 8% 5 Gap 5% 5 Gap 6% 5 Gap 5% 5 Gap 5% 6 Forever 21 2% 6 American Eagle 2% 6 American Eagle 3% 6 Forever 21 2% 7 Old Navy 2% 7 Forever 21 2% 7 Old Navy 1% 7 American Eagle 2% 8 American Eagle 2% Old Navy 2% 8 Nike / Jordans 1% 8 Old Navy 2% 9 delia*s 1% 9 Miss Me Jeans 1% 9 Forever 21 1% 9 Roxy 2% Miss Me Jeans 1% 10 Three Brands Tied 1% 10 Three Brands Tied 1% 10 Juicy Couture 1% BRANDS NO LONGER WORN (UPPER-INCOME, MALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Gap 14% 1 Gap 14% 1 Gap 12% 1 Gap 11% 2 Adidas 10% 2 Adidas 10% 2 Hollister 11% 2 Abercrombie & Fitch 9% 3 Abercrombie & Fitch 8% 3 Abercrombie & Fitch 9% 3 Abercrombie & Fitch 9% 3 Hollister 8% 4 Aeropostale 6% 4 Aeropostale 7% 4 Aeropostale 9% 4 Aeropostale 7% 5 Hollister 5% 5 Hollister 6% 5 Adidas 9% 5 Adidas 6% 6 Nike / Jordans 5% 6 Under Armour 4% 6 American Eagle 8% 6 American Eagle 4% 7 American Eagle 4% 7 Nike / Jordans 4% 7 Reebok 4% 7 Nike / Jordans 4% Under Armour 4% 8 American Eagle 3% 8 Under Armour 4% 8 Under Armour 3% 9 Reebok 3% 9 Reebok 3% 9 Nike / Jordans 2% 9 Quiksilver 3% 10 DC Shoes 3% 10 Skechers 3% Quiksilver 2% 10 DC 3% Puma 3% 26 Taking Stock With Teens

27 KORS Remains No. 1 Handbag & Eclipses COH s Peak Share PREFERRED HANDBAG BRANDS (UPPER-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Michael Kors 39% 1 Michael Kors 30% 1 Coach 29% 1 Coach 26% 2 Coach 14% 2 Coach 18% 2 Michael Kors 26% 2 Michael Kors 21% 3 Kate Spade 10% 3 Kate Spade 10% 3 Kate Spade 6% 3 Louis Vuitton 7% 4 Louis Vuitton 5% 4 Louis Vuitton 4% 4 Louis Vuitton 4% 4 Vera Bradley 6% 5 Vera Bradley 5% 5 Longchamp 4% 5 Vera Bradley 3% 5 Marc Jacobs 3% 6 Tory Burch 4% 6 Vera Bradley 4% 6 Chanel 3% 6 Kate Spade 3% 7 Chanel 2% 7 Chanel 3% Tory Burch 3% 7 Longchamp 3% 8 Target 2% Tory Burch 3% 8 Fossil 3% 8 Gucci 3% 9 Longchamp 1% 9 Marc Jacobs 3% 9 Longchamp 2% 9 Tory Burch 2% 10 Gucci 1% 10 Gucci 2% Marc Jacobs 2% 10 Fossil 2% Marc Jacobs 1% PREFERRED HANDBAG BRANDS (AVERAGE-INCOME, FEMALES) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Michael Kors 39% 1 Michael Kors 38% 1 Michael Kors 31% 1 Coach 33% 2 Coach 17% 2 Coach 20% 2 Coach 27% 2 Michael Kors 21% 3 Kate Spade 6% 3 Vera Bradley 5% 3 Louis Vuitton 5% 3 Louis Vuitton 5% 4 Louis Vuitton 4% 4 Louis Vuitton 4% 4 Vera Bradley 4% 4 Vera Bradley 5% 5 Vera Bradley 3% 5 Gucci 3% 5 Gucci 4% 5 Gucci 4% 6 Gucci 2% 6 Kate Spade 3% 6 Chanel 2% 6 Fossil 3% 7 Chanel 2% 7 Fossil 2% Fossil 2% 7 Chanel 2% Tory Burch 2% 8 Chanel 2% Kate Spade 2% 8 Steve Madden 2% 9 Fossil 2% 9 Tory Burch 2% 9 Steve Madden 2% Guess 2% 10 Steve Madden 1% 10 Steve Madden 1% 10 Tory Burch 2% 10 Juicy Couture 1% Target 1% 27 Taking Stock With Teens

28 Apple Cracks The Top Ten Of Teen Watch Preferences PREFERRED WATCH BRANDS (UPPER-INCOME) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Rolex 31% 1 Rolex 30% 1 Rolex 31% 1 Rolex 31% 2 Michael Kors 24% 2 Michael Kors 23% 2 Michael Kors 15% 2 Michael Kors 15% 3 Casio 8% 3 Casio 9% 3 Casio 11% 3 Casio 13% 4 Fossil 7% 4 Fossil 5% 4 Fossil 9% 4 Fossil 7% 5 Nike 4% 5 Nike 4% 5 Nike 4% 5 Nixon 6% 6 Apple 3% 6 Nixon 2% 6 Nixon 3% 6 Nike 3% 7 Nixon 1% 7 Swatch 2% 7 Timex 2% 7 Timex 2% 8 Swatch 1% 8 Timex 2% 8 Marc Jacobs 1% 8 Swatch 2% 9 Timex 1% 9 Marc Jacobs 2% 9 Gucci 1% 9 Gucci 1% 10 Gucci 1% 10 Gucci 1% Swatch 1% 10 Swiss Army 1% Kate Spade 1% Guess? 1% WOULD YOU BUY AN APPLE WATCH FOR $350? WEARABLES OWNERSHIP BY TYPE Yes Female Male 17% 16% 13.2% 13.1% 11% 5.7% 2.6% Fitness Band Ownership Smartwatch Ownership 28 Taking Stock With Teens

29 Performance Athletic Underscores Nike s Dominance PREFERRED ATHLETIC CLOTHING BRANDS (UPPER-INCOME) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 72% 1 Nike 68% 1 Nike 70% 1 Nike 70% 2 Under Armour 7% 2 Under Armour 8% 2 Under Armour 8% 2 Under Armour 9% 3 lululemon 4% 3 lululemon 6% 3 lululemon 5% 3 Adidas 5% 4 Adidas 4% 4 Adidas 4% 4 Adidas 4% 4 lululemon 3% 5 The North Face 1% 5 The North Face 1% 5 Bauer < 1% 5 The North Face 1% Jordan < 1% The North Face < 1% PREFERRED ATHLETIC FOOTWEAR BRANDS (UPPER-INCOME) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Nike 81% 1 Nike 81% 1 Nike 83% 1 Nike 80% 2 Adidas 4% 2 Adidas 4% 2 Adidas 4% 2 Adidas 6% 3 New Balance 2% 3 ASICS 2% 3 ASICS 2% 3 ASICS 2% 4 ASICS 1% 4 Jordan 1% 4 Jordan 1% 4 Jordan 2% 5 Under Armour 1% 5 Under Armour 1% New Balance 1% 5 Under Armour 1% Under Armour 1% PREFERRED SPORTS (UPPER-INCOME) Rank 2015 % Rank 2014 % Rank 2014 % Rank 2013 % 1 Soccer 14% 1 Soccer 16% 1 Basketball 13% 1 Soccer 13% 2 Basketball 11% 2 Basketball 12% 2 Soccer 11% 2 Football 11% 3 Running 10% 3 Football 9% 3 Football 9% 3 Basketball 11% 4 Football 8% 4 Running 8% 4 Baseball 7% 4 Running 7% 5 Baseball 6% 5 Baseball 6% 5 Running 7% 5 Baseball 7% 29 Taking Stock With Teens

30 4.8% 4.2% 4.3% 3.9% 3.1% 3.3% 3.9% 3.4% 2.5% 1.8% 1.7% 1.2% 10.1% 9.8% 8.2% 9.4% 9.0% 9.4% 8.4% 9.0% 24.6% 25.3% 29.8% 31.2% 45.9% 46.1% 43.7% 41.9% TAKEAWAYS Headphone Brand Planning to Purchase Next When asked which brand of headphones teens plan to purchase next, Beats by Dr. Dre received 41.9% of responses, Apple received 31.2% and Skullcandy received 9.4%. Skullcandy s share of future purchases declined 40 bps y/y but accelerated by 120 bps sequentially. 60% 50% % 30% 20% 10% 0% Beats by Dr. Dre Apple Skullcandy Sony Bose JVC All others 30 Taking Stock With Teens

31 Headphone Share of Teen Wish Lists TAKEAWAYS Percentage of teens asking for headphones as gifts was roughly flat sequentially and down y/y (see chart below). Percentage of teens planning to purchase headphones in next six months was flat y/y at 56% and down slightly on a sequential basis. 3.0% 2.6% 2.5% 2.3% 2.1% 2.0% 1.5% 1.7% 1.7% 1.6% 1.0% 0.6% 0.7% 0.5% 0.0% 0.4% 0.2% 0.1% 0.1% 0.1% 0.0% 0.1% SP08 FA08 SP09 FA09 SP10 FA10 SP11 FA11 SP12 FA12 SP13 FA13 SP14 FA14 SP15 31 Taking Stock With Teens

32 Beauty Spending ANNUAL SPEND BY CATEGORY (UPPER-INCOME) $170 Skin Care Cosmetics Fragrance $150 $130 $110 $90 $70 $50 $145 $69 $53 Teen spending on beauty overall is flattish with spending on cosmetics continuing to increase while skin care and fragrance are mixed ANNUAL SPEND BY CATEGORY (AVERAGE-INCOME) $170 Skin Care Cosmetics Fragrances $150 $130 $134 $110 $90 $70 $50 $76 $65 32 Taking Stock With Teens

33 85% Cosmetics Top 10 Brand Concentration 83% The de-concentration of brand share in cosmetics continues to speak to test & trial 80% 75% 70% 69% 65% 64% 60% Taking Stock With Teens

34 MAC Is Top Cosmetic Brand Among Both Income Sets For 1 st Time PREFERRED COSMETIC BRANDS (UPPER-INCOME, FEMALES) 2015: 13% 13% 9% 9% 7% Rank 2014 % Rank 2014 % 1 Maybelline 13% 1 Maybelline 13% 2 CoverGirl 10% 2 CoverGirl 12% 3 MAC 10% 3 MAC 12% 4 Urban Decay 7% 4 Sephora 7% 5 Sephora 7% 5 Urban Decay 7% PREFERRED COSMETIC BRANDS (AVERAGE-INCOME, FEMALES) 2015: 15% 12% 10% 7% 7% Rank 2014 % Rank 2014 % 1 Maybelline 14% 1 CoverGirl 15% 2 CoverGirl 13% 2 Maybelline 15% 3 MAC 13% 3 MAC 13% 4 Sephora 7% 4 L'Oreal 7% 5 Urban Decay 6% 5 Sephora 6% 34 Taking Stock With Teens

35 Discounters Rank As Top Beauty Destinations; Ulta Gaining Share PREFERRED BEAUTY DESTINATIONS (UPPER-INCOME FEMALES) 2015: 19% 19% 18% 14% 9% Rank 2014 % Rank 2014 % 1 Sephora 22% 1 Target 24% 2 Target 21% 2 Sephora 16% 3 CVS 13% 3 Ulta 15% 4 Ulta 13% 4 Walmart 11% 5 Walmart 7% 5 CVS 9% PREFERRED BEAUTY DESTINATIONS (AVERAGE-INCOME FEMALES) 2015: 21% 16% 15% 14% 6% Rank 2014 % Rank 2014 % 1 Walmart 24% 1 Walmart 26% 2 Target 16% 2 Target 15% 3 Ulta 13% 3 Ulta 12% 4 Sephora 12% 4 Sephora 10% 5 Walgreens 5% 5 Walgreens 6% 35 Taking Stock With Teens

36 User Reviews Highly Valued In Beauty All Online Shopping Teens Online Shoppers For Personal Care Teens who spend above average on beauty prefer customer reviews over selection as a top factor in online purchasing decisions Price Free shipping Selection Customer reviews Ease of returns Two-day shipping Mobile app 36 Taking Stock With Teens

37 Teens Embrace Organic Food, Trends Accelerating TEENS WHO EAT ORGANIC AT HOME % OF THOSE EATING MORE VERSUS LESS 50% 45% 40% 35% 30% 25% 20% 15% 33% Average: 40% 40% 39% 42% 39% 40% 41% 44% 45% 40% 35% 30% 25% 20% 15% 39% 36% Average: 36% 31% 33% 35% 37% 39% 40% 10% 10% 5% 5% 0% % Taking Stock With Teens

38 Restaurant Brand Preferences PREFERRED RESTAURANTS (UPPER-INCOME) No. 1 No. 2 No. 3 No. 4 No Chipotle Chick-fil-A Panera Bread Company Olive Garden Chipotle Chipotle Chipotle Chipotle Chipotle Chipotle Chipotle Chipotle Chick-fil-A Chili's Olive Garden Chick-fil-A Olive Garden Olive Garden Olive Garden Olive Garden Chili's Olive Garden Dunkin Donuts Panera Bread Company Chick-fil-A Dunkin Donuts Chili's Outback Steakhouse Chipotle Chipotle Chipotle Chipotle Chipotle Chipotle Chipotle Chipotle Chick-fil-A Panera Bread Company Olive Garden The Cheesecake Factory Applebee's Chick-fil-A Olive Garden Olive Garden TGI Friday's Olive Garden The Cheesecake Factory Panera Bread Company Chick-fil-A Chick-fil-A Chili's Olive Garden Applebee's Chipotle PREFERRED RESTAURANTS (AVERAGE-INCOME) No. 1 No. 2 No. 3 No. 4 No Chipotle Olive Garden Chick-fil-A Olive Garden Olive Garden Olive Garden Chipotle Olive Garden Olive Garden Olive Garden Olive Garden Red Lobster Applebee's Chick-fil-A Taco Bell Red Lobster Taco Bell Taco Bell Red Lobster Applebee's Taco Bell Chipotle Taco Bell Applebee's Applebee's Applebee's Red Lobster Olive Garden Olive Garden Olive Garden Olive Garden Chipotle Olive Garden Olive Garden Olive Garden Applebee's Applebee's Applebee's Olive Garden Taco Bell Taco Bell Taco Bell Applebee's Taco Bell Buffalo Wild Wings Red Lobster Applebee's Chili's Chili's Red Lobster Red Lobster 38 Taking Stock With Teens

39 Console Video Game Takeaways DO YOU PLAN TO SPEND MORE TIME PLAYING VIDEO GAMES IN 2015 (VS. 2014)? DO YOU PURCHASE USED/PRE-OWNED VIDEO GAMES? IF YES, WHERE DO YOU PURCHASE YOUR USED VIDEO GAMES? Used/Pre-owned Purchase % of Students 2011 % of Students 2012 % of Students 2012 % of Students 2013 % of Students 2013 % of Students 2014 % of Students 2014 % of Students 2015 Yes 51% 60% 59% 63% 64% 64% 63% 62% No 49% 40% 41% 37% 36% 36% 37% 38% Used Games % of Students 2011 % of Students 2012 % of Students 2012 % of Students 2013 % of Students 2013 % of Students 2014 % of Students 2014 % of Students 2015 More 27% 28% 26% 32% 35% 32% 34% 36% Less 73% 72% 74% 68% 65% 68% 66% 64% GameStop 54% 52% 56% 53% 56% 57% 41% 48% Amazon 8% 10% 9% 12% 11% 11% 15% 16% ebay 6% 6% 6% 7% 6% 6% 7% 7% Best Buy 13% 13% 11% 10% 11% 9% 14% 11% Walmart 12% 13% 13% 13% 12% 12% 16% 13% Other 6% 6% 5% 5% 4% 4% 8% 5% 36% anticipate playing more games in 2015 (up from 34% in 2014) the highest intention to play more games in our survey in at least four years GameStop maintains its lead in pre-owned video game market share during the critical early stages of the next-gen console cycle with a 48% share of respondents (up from 41% in our fall survey) 39 Taking Stock With Teens

40 Teen Mobile Game Trends Stable DO YOU PLAY GAMES ON YOUR MOBILE PHONE OR TABLET? % of Students 2013 % of Students 2013 % of Students 2014 % of Students 2014 % of Students 2015 Yes 83% 81% 85% 80% 81% No 17% 19% 15% 20% 19% WHEN PLAYING GAMES ON YOUR MOBILE DEVICE, DO YOU BUY VIRTUAL? % of Students 2013 % of Students 2013 % of Students 2014 % of Students 2014 % of Students % play games on smartphone or tablet, flat from 80% in the fall 21% of teens who play mobile games spend money in game (vs. 22% in the fall) Top three mobile games: Clash of Clans, Madden & Crossy Road Yes 16% 18% 18% 22% 21% No 84% 82% 82% 78% 79% 40 Taking Stock With Teens

41 Teen Movie Rental Trends PJC Teen Survey How do you rent movies today? Retail Store 29% 28% 23% 21% 20% DVD-By-Mail 6% 5% 5% 4% 4% Dow nload/streaming 46% 49% 55% 57% 61% Kiosks 19% 18% 17% 18% 15% PJC Teen Survey Which will you use most to rent movies in the next 5 yrs? Netflix 59% 59% 65% 67% 69% Redbox 18% 17% 14% 13% 10% Other 11% 12% 10% 8% 8% Rental Store 3% 3% 2% 2% 2% Hulu 4% 4% 3% 4% 5% Amazon 5% 5% 6% 7% 7% Download/streaming of movies continues to gain share, accounting for 61% of how teens rent movies today (vs. 57% in the fall); DVD kiosks dropped several points to 15% Looking out 5 years, 69% expect Netflix to be their primary source of movie rentals, up from 67% in the fall 41 Taking Stock With Teens

42 IMAX Popularity Rebounds PREFERRED METHOD TO WATCH A FILM DVD rental 9% 3D in theater 11% Video-ondemand 9% Digital streaming 18% DVD purchase 6% IMAX 21% 2D in theater 19% Other premium theaters 7% IMAX remains the dominant format among teens; recent slate experiment helping to grow its share Studios continue to benefit from continued growth in streaming demand PREFERRED METHOD TO WATCH TV SHOWS Mobile phone 12% Tablet 8% TV 60% Desktop/ laptop 20% 42 Taking Stock With Teens

43 Questions & Answers SPEAKER Wissink Tamminga Murphy Wissink Berg Naughton Munster Olson Marsh TOPIC Survey Demographics & Shopping Behavior Shopping Behavior Channel Convergence, Loyalty, Mobile Brand Preferences Apparel & Footwear Brand Preferences Beauty Brand Preferences Specialty Accessories Brand Preferences Organic Foods Brand Preferences Electronics, Social Media, ecommerce Brand Preferences Video Games, Movie Rentals Brand Preferences Entertainment & Media 43 Taking Stock With Teens

44 Stock Highlights: Multi-Brand Retail & Specialty Commerce Analyst: Neely Tamminga ANF (+): SURVEY SHOWS EVIDENCE OF STABILIZATION AMONG U.S. TEENS Hollister remained at No. 7 overall among upper-income teens, consistent with last fall and relative to No. 5 last spring. Hollister also showed up as a top 10 new brand that teens are starting to wear among males (No. 9), and both A&F and Hollister remained stable among brands no longer worn. As it relates to our average-income survey group, Hollister remained at No. 5, consistent with last fall and a year ago. KSS (+): SURVEY SHOWS EVIDENCE OF INITIATIVES TAKING HOLD Kohl s moved up to No. 6 among upper-income males up from No. 8 a year ago and No. 9 just six months ago the highest since 2011 (No. 5) when comps came in at 2% vs. the average comp of -0.7% since that time frame. Among average-income, Kohl s ranked No. 9 overall and No. 7 among males; this is the first time Kohl s has ranked in the top 10 among males since 2012 (No. 9). LB (+): SURVEY SHOWS EVIDENCE OF THE POWER OF MULTI-CATEGORY LIFESTYLE BRANDS Victoria s Secret / PINK moved up to No. 5 among upper-income teens overall up from No. 10 six months ago and No. 6 a year ago and moved up to No. 2 among upper-income females versus No. 6 last fall and No. 3 last spring. This is the highest rank we ve seen in our survey history (both overall and among females only). In addition, the brand ranked No. 3 as a new brand worn among upperincome females after not showing up in the top 10 just six months ago and versus No. 7 a year ago and when asked to name the top fashion trends right now, Victoria s Secret / PINK was named No. 2 among upper-income females. When looking at our average-income survey group, Victoria s Secret ranked No. 6 overall consistent with No. 6 a year ago and compared to No. 7 six months ago. When looking at females specifically, the brand ranked No. 3 versus No. 5 last fall and No. 3 a year ago. 44 Taking Stock With Teens

45 Stock Highlights: Global Fashion & Lifestyle Brands Analyst: Erinn Murphy NKE (+): UPGRADING TO OVERWEIGHT FROM NEUTRAL; BRAND SHOWING NO SLOWDOWN Nike remains the top apparel and footwear brand among both upper- and average-income groups. The brand pulled ahead significantly in women s both in fashion and performance athletic. GPRO (+): TRANSITIONING COVERAGE FROM NAUGHTON; RAISING TO OVERWEIGHT BUT MAINTAINING ESTIMATES & PT Brand is seeing strong adoption rate in Teen Survey: 1) teen family ownership of GoPro's moved up 520 bps year-over-year with family ownership nearing 18%, and 2) GoPro capturing more share of teen wish lists from 0.64% last year to 1.57% this year. FINL (+): FAVORITE DEEP-VALUE NAME (5.5X EV/EBITDA) Finish Line likely benefits from running improvement running listed as No. 3 sport with 10% share, up from No. 5 with 7% share a year ago. WWW (-): BOTH SPERRY BRAND & BOAT SHOE TREND ON THE DECLINE Sperry (18% of sales) ceded share particularly among females (No. 9 brand vs. No. 7 last year); boat shoe downtrending as a fashion trend. RL (-): MAINTAINS RANK BUT CEDES SHARE Still No. 4 preferred apparel brand but ceded share year-over-year from 6% to 4%; seeing volatility more in female vote vs. male vote with upper-income female rank moving to No. 41 vs. No. 19 last year. 45 Taking Stock With Teens

46 Stock Highlights: Beauty Analyst: Stephanie Wissink ULTA (+): GAINED SHARE AMONG TOP BEAUTY DESTINATIONS & PREFERRED LOYALTY MEMBERSHIP Ulta replaced CVS as the No. 3 preferred beauty destination, gaining 6 ppt share from Among top loyalty programs, teens continued to rank Sephora No. 1 and Ulta No. 2, but Ulta gained 5 ppt share from the fall amounting to 21% of total share this spring. The shift toward specialty beauty reinforced by channel level data; provides comp support. The de-concentration of brand mindshare highlights emerging brands, test and trial, and experiential selling environment; expanded brand network for Ulta helps to capture share. Ulta s financial model is staged for improved leverage following heightened investment period; we see $9+ in EPS power. EL (+): MAC RANKS AS NO. 1 PREFERRED COSMETIC BRAND FOR BOTH INCOME SETS FOR THE FIRST TIME MAC was the favorite cosmetic brand in both our upper-income and average-income surveys marking the first time in our survey history that a mass brand was unseated for the top spot among average-income teens. When ranking their top beauty destinations, MAC moved up to the No. 7 position from No. 10 in the fall. MAC continued to rank among the top 10 preferred loyalty programs, moving back to the No. 3 spot (consistent with 2014) and gained 2 ppt share from the fall. 46 Taking Stock With Teens

47 Stock Highlights: Healthy Living & Consumables Analyst: Sean Naughton NGVC (+): SURVEY DEMONSTRATES ORGANIC FOOD TRENDS ACCELERATING WITH NEXT GENERATION Results are positive for the group, but we are calling out Natural Grocers specifically as it is lapping a competitive intrusion from last year (Trader Joe s), has expanded store hours, and is well off its all-time highs. In addition, the company trades at 11.5x EV/EBITDA on our CY16E numbers, which we think is attractive given the 20% unit growth for the company. As a reminder, this concept only carries 100% USDA organic produce. 47 Taking Stock With Teens

48 Stock Highlights: Hardlines Retail & Specialty Products Analyst: Jon Berg (Peter Keith) SKUL (+) Intent to purchase improves sequentially: 9.4% plan to buy Skullcandy headphones as next pair, down 40 bps from 2014 but accelerates 120 bps from Skullcandy falls to 9.4% from 13.7% in 2014 and 11.2% in 2014 when asked what brand of headphones teens currently own. Share of teens asking for headphones as gifts is stable sequentially from 2014 but down on a y/y basis from Percentage of teens planning to purchase headphones in next six months also stable y/y and down slightly on a sequential basis. We believe increased advertising and marketing effectiveness over the holidays as well as new innovative products and points of distribution have started to positively impact demand trends by teens for the Skullcandy brand. We anticipate improved brand penetration in our 2015 survey based on current demand trends. 48 Taking Stock With Teens

49 Stock Highlights: Internet Analyst: Gene Munster AMZN (+): SURVEY SHOWS STEP UP IN MINDSHARE DESPITE ALREADY LARGE PRESENCE Despite being the largest player in ecommerce globally and owning 33%+ ecommerce share in the US, the PJC Teen Survey saw Amazon increasing mindshare among teens; the number of teens indicating Amazon as their preferred ecommerce site increase to 36.3% from 32.1% in our 2014 survey and 30.9% in our 2014 surveys. We believe this bodes well for the long-term growth story of Amazon as teens are still a decade away from moving into power-spending years; this provides support to long-term ecommerce GMV growth. EBAY (-): EBAY CONTINUES SHARE LOSS AS CONSUMERS TURN TOWARD MORE STRUCTURED ECOMMERCE Over the past four surveys (since of 2013) ebay has been gradually losing share among teens, which we attribute to consumers desire the ubiquity of Amazon and retailer experiences and move away from hunt-and-peck style ecommerce search seen on ebay. ebay saw decreased mindshare from 4.9% in 2014 and 6.5% in 2014 to 4.5% in 2015; we are cautious on the future of ebay Marketplace. FB(+): INSTAGRAM REMAINS TOP FOR TEENS, SNAPCHAT RAMPING QUICKLY 32% of teens stated that Instagram is the most important social network for them vs. 30% in Twitter second with 24% of teens vs. 27% in Snapchat had 13% of the teen vote for most important network, which was fourth behind Facebook at 14%. Also note that 47% of teens noted they use Facebook vs. 45% in % of teens stated that they use Instagram and 68% use Snapchat. 49 Taking Stock With Teens

50 Stock Highlights: Internet Analyst: Gene Munster AAPL (+): APPLE STILL TOP TECH BRAND FOR TEENS 66% of teens owned an iphone vs. 67% in % of teens expect their next phone to be an iphone vs. 73% in Believe iphone penetration may be reaching upper limits among teens (U.S. overall iphone ownership ~40%). Apple Watch interest declined with 11% of teens suggesting they intend to buy a Watch vs. 16% in Believe this reiterates our thesis that initial adoption will be modest and ramp over time. 50 Taking Stock With Teens

51 Stock Highlights: Video Games & Digital Media Analyst: Mike Olson ATVI(+), EA(+), GME(+), TTWO(+): SURVEY POINTS TO TIME SPENT PLAYING VIDEO GAMES INCREASING, CONTINUED STRONG UPTAKE OF NEXT GEN CONSOLES, AND ONGOING DEMAND FOR PRE-OWNED BUY/SELL/TRADE Video game publishers (ATVI, EA, TTWO) will be beneficiaries of increasing time spent playing video games as 36% of teens expect to play more games this year vs. last year the highest percentage we have seen in >4 years. GameStop (GME) appears to continue to be well-positioned to capture a strong demand from consumers for pre-owned buy/sell/trade capabilities; 48% of teen gamers said GameStop is where they buy/sell/trade used games, up from 41% in Mobile gaming interest and % of teens willing to pay to play mobile games remained stable/unchanged since NFLX(+) & OUTR(=); TEENS INCREASINGLY TRENDING TOWARD STREAMING/DOWNLOAD MOVIE RENTALS OVER OTHER CHANNELS; REDBOX FADING, BUT NOT RAPIDLY Netflix (NFLX) continues to have increasing popularity among teens when it comes to being a primary source of movie rentals; 69% of teens suggested that Netflix will be where they rent most of their movies in five years, up from 67% in Redbox (Outerwall OUTR), not surprisingly, is seeing some signs of secular decline among teens; 10% of teens expect Redbox to be the way they rent movies most in five years, down from 13% in our 2014 survey; this is consistent with our estimates for declining rentals/kiosk for Redbox in the coming years. 51 Taking Stock With Teens

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53 Important Research Disclosures Analyst Certification Peter Keith, James Marsh, Nicole Miller Regan, Gene Munster, Erinn Murphy, Sean Naughton, Mike Olson, Neely Tamminga, Stephanie Wissink, Senior Research Analysts The views expressed in this report accurately reflect my personal views about the subject company and the subject security. In addition, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report. Piper Jaffray research analysts receive compensation that is based, in part, on the firm's overall revenues, which include investment banking revenues. Piper Jaffray does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decisions. This report should be read in conjunction with important disclosure information, including an attestation under Regulation Analyst Certification, found at the following site: Ratings and Other Definitions Stock Ratings: Piper Jaffray ratings are indicators of expected total return (price appreciation plus dividend) within the next 12 months. At times analysts may specify a different investment horizon or may include additional investment time horizons for specific stocks. Stock performance is measured relative to the group of stocks covered by each analyst. Lists of the stocks covered by each are available at Stock ratings and/or stock coverage may be suspended from time to time in the event that there is no active analyst opinion or analyst coverage, but the opinion or coverage is expected to resume. Research reports and ratings should not be relied upon as individual investment advice. As always, an investor s decision to buy or sell a security must depend on individual circumstances, including existing holdings, time horizons and risk tolerance. Piper Jaffray sales and trading personnel may provide written or oral commentary, trade ideas, or other information about a particular stock to clients or internal trading desks reflecting different opinions than those expressed by the research analyst. In addition, Piper Jaffray offers technical research products that are based on different methodologies, may contradict the opinions contained in fundamental research reports, and could impact the price of the subject security. Recommendations based on technical analysis are intended for the professional trader, while fundamental opinions are typically suited for the longer-term institutional investor. Overweight (OW): Anticipated to outperform relative to the median of the group of stocks covered by the analyst. Neutral (N): Anticipated to perform in line relative to the median of the group of stocks covered by the analyst. Underweight (UW): Anticipated to underperform relative to the median of the group of stocks covered by the analyst. 53 Taking Stock With Teens