Taking Stock With Teens

Transcription

1 Taking Stock With Teens A Collaborative Consumer Insights Project Fall 2013

2 Disclosures Disclosures for universe of: Stephanie Wissink, Nicole Miller Regan, Sean Naughton, Neely Tamminga, Erinn Murphy, Gene Munster, Mike Olson, 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: Naughton: FL; Olson: GLUU 5. The following companies have been investment banking clients of Piper Jaffray during the past 12 months: Miller Regan: BAGL, DFRG, FRGI, IRG, NDLS, SBUX; Murphy: KORS; Wissink: i TLYS; Naughton: NGVC; Tamminga: COTY, GMAN, RH, ULTA; Munster: AAPl, WWW, YUM; Marsh: DISCA, ENT, P 6. Piper Jaffray expects to have the following companies as investment banking clients within the next three months: Miller Regan: DFRG, NDLS; Murphy: KORS; Tamminga: COTY, RH; Munster: YUME; Marsh: P 7. Other material conflicts of interest for Piper Jaffray regarding companies in my universe for which I am aware include: Miller Regan: DFRG, FRGI, NDLS: underwriting; Murphy: KORS: underwriting; Wissink:: TLYS: underwriting; Naughton: BDE, NGVC: underwriting; Tamminga: COTY, RH: underwriting; Munster: YUME, YY: underwriting; Marsh: DISCA, P: underwriting 8. Piper Jaffray received non-investment banking securities-related compensation from the following companies during the past 12 months: Miller Regan: AFCE; Murphy: CROX; Naughton: NGVC; Wissink: GCO, WTSL; Tamminga: HSNI; Munster: DRIV, RLOC, VCLK; 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: Miller Regan: AFCE, BAGL, BBRG, BJRI, BKW, CAKE, DFRG, DNKN, DRI, EAT, FRGI, IRG, MCD, NDLS, PEET, PNRA, RRGB, RUTH, SBUX, SONC; Murphy: COH, CROX, DECK, FOSL, GES, GIII, KORS, PVH, SHOO, WWW, ZQK; Wissink: AEO, ANF, ARO, BODY, GCO, GPS, HAS, JAKK, MAT, PLCE, PSUN, RUE, TLYS, WTSLA, ZUMZ; Naughton: BDE, BGFV, CLUB, COST, DKS, FINL, HAIN, HIBB, NGVC, SKUL, TFM, TGT, UA, UNFI, WFM; Tamminga: ANN, ASNA, CACH, CHS, CWTR, EXPR, GMAN, IPAR, JCP, JWN, KIRK, KSS, RH, ROST, ULTA, URBN, VRA, VVTV; Munster: AAPL, AMZN, ANGI, BIDU, DRIV, EBAY, FB, GOOG, GRPN, IACI, LNKD, LOGM, MCHX, MELI, MOBI, PRTS, RLOC, SINA, VCLK, WWWW, YELP, YHOO, YNDX, YY; Olson: ADBE, AKAM, ATVI, CTRP, DLB, DTSI, EA, EXPE, GLUU, GME, LLNW, NFLX, OPEN, OUTR, PCLN, RNWK, ROVI, TIVO, TRIP, TTWO, ZNGA; Marsh: CBS, CKEC, CMLS, DIS, DISCA, DWA, IMAX, IPG, LAMR, LGF, MDCA, MM, 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: Miller Regan: CMG; Murphy: RL, VFC; Naughton: BGS, CAB, FL, LTM, NKE, VSI; Wissink: CRI, LF, SUMR; Tamminga: CBK, COTY, EL, HSNI, LTD, NWY, WSM; Munster: YUME; Olson: AWAY; Marsh: CNK, ENT, SNI 2

3 Results Conference Call & Speaking Order Conference Call Details Tuesday, October 8 at 4:30pm ET Dial-in Instructions: Conference ID: Speaking Order 1) Steph Wissink Survey Details Spending Highlights 2) Erinn Murphy Brand Preferences Fashion Insights 3) Sean Naughton (Adam Engebretson) Athletic Brands and Headphones Organic Foods 4) Nicole Miller Regan (Joshua Long) Restaurants t 5) Neely Tamminga Online & Off-Price Retailing Beauty & Personal Care 6) Gene Munster Digital & Social Media Apple and Facebook 7) Michael Olson (Andrew Connor & Ryan Wright) Online Movie Rentals Video Games 8) James Marsh Media & Entertainment 3

4 Investment Risks Risks to achievement of investment objectives include, but are not limited to: Reliance on key top management Changing consumer preferences Changes in input costs and raw materials Markdown risks Product flow and inventory disruptions Competition Lack of pricing power Deleveraging of fixed expenses Foreign exchange rate risk General macroeconomic uncertainty 4

5 Survey Details National Survey Of Teens Measures: Brand Preferences Spending Trends Shopping Characteristics 26th Semi-Annual Proprietary Teen Research Project Two Unique Surveys: Total 8,650 teen responses Average Age 16.2 years 1) Upper-Income Teen Survey Classroom visit & electronic surveys of 2,400 teens HH Income of $105,000 represents top 25% of U.S. household units 2) Average-Income Teen Survey Classroom visit & electronic surveys of 6,250 teens HH Income of $53,000 aligns more closely with U.S. median 5

6 Teen Spending By Category Music & Movies 6% Events 6% BooksFurniture Other 2% 1% 3% Clothing 21% Video Games 7% Electronics 7% Food 20% Shoes 9% Car 9% Accessories/ Personal Care 10% 6

7 Spending Behavior Highlights Fashion Spending Declined Low To Mid-Single Digits Relative To Prior Seasons Spending Expectations Moderate From Spring To Fall Footwear Category Gains Share in Wallet, Share Shift Coming From Accessories Shopping Frequency For Fashion Continues To Moderate Internet & Off-Price Channels Preferred Over Traditional Mall Retail Households Digest Tax Changes As Parent Contribution Returns To 65% Range 7

8 Teens Spending Less On Fashion $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $1,285 $1,468 $1,562 $1,139 $1,244 $1,267 $1,423 $1,415 $1,353 $1,348 $1,531 $1,285 $1,454 $1,052 $1,183 $1,083 $1,062 $1,018 $932 $934 $933 $969 $1,133 $1,102$1,087 $1,041 $800 $700 8

9 Spending Expectations Moderate From Spring To Fall 60% 50% 40% 30% 20% 10% Apparel Shoes Accessories 49% 35% 16% 0% 9

10 Fashion Wallet Share Shift From Accessories To Footwear Shoes Accessories 26% 26% 20% 14% 10% Spr Spr Spr Sp Sp Sp Sp Sp Sp Sp Sp Sp Sp Spr Spr Spr Spr Spr Spr Spr Fall 2010 ring 2011 Fall 2011 ring 2012 Fall 2012 ring 2013 Fall 2013 Fall 2013 ring 2013 Fall 2012 ring 2012 Fall 2011 ring 2011 Fall 2010 ring 2010 Fall 2009 ring 2009 Fall 2008 ring 2008 Fall 2007 ring 2007 Fall 2006 ring 2006 Fall 2005 ring 2005 Fall 2004 ring 2004 Fall 2003 Fall 2003 ring 2004 Fall 2004 ring 2005 Fall 2005 ring 2006 Fall 2006 ring 2007 Fall 2007 ring 2008 Fall 2008 ring 2009 Fall 2009 ring

11 Shopping Frequency For Fashion Continues To Moderate

12 Parent Contribution To Teen Spending Returns To Historical Levels 80% 75% 70% 65% 60% 55% 50% 45% 40% Spring 2011 Fall 2011 Spring 2012 Fall 2012 Spring 2013 Fall 2013 Average Income Upper Income 12

13 A Spotlight On Emerging Channels: Online Retailing Shopping Preferences By Channel Internet, 10% Mail Order, 6% Specialty, 27% Outlet, 14% Discount, 12% Major Chain/Dept Store/Off-Price, 30% 13

14 Top 5 Clothing Brands History TOP CLOTHING BRAND PREFERENCES (UPPER-INCOME TEEN SURVEY) No. 1 No. 2 No. 3 No. 4 No. 5 Fall 2013 Nike Action Sports Brands Forever 21 American Eagle Polo Ralph Lauren Spring 2013 Nike Action Sports Brands American Eagle Forever 21 Polo Ralph Lauren Fall 2012 Nike Forever 21 Polo Ralph Lauren Action Sports Brands American Eagle Spring 2012 Nike Forever 21 Action Sports Brands American Eagle Polo Ralph hlauren Fall 2011 Nike Forever 21 Action Sports Brands American Eagle Polo Ralph Lauren Spring 2011 Nike Forever 21 American Eagle Action Sports Brands Polo Ralph Lauren Fall 2010 Action Sports Brands Nike American Eagle Forever 21 Hollister Spring 2010 Action Sports Brands Forever 21 Nike Hollister American Eagle Fall 2009 Action Sports Brands Forever 21 Hollister Nike American Eagle Spring 2009 Action Sports Brands Hollister Nike Forever 21 American Eagle Fall 2008 ActionSports Brands Hollister Forever 21 American Eagle A&F Spring 2008 Hollister Action Sports Brands American Eagle A&F Forever 21 Fall 2007 Hollister Action Sports Brands American Eagle A&F Forever 21 Spring 2007 Hollister American Eagle Action Sports Brands A&F Forever 21 Fall 2006 Hollister Action Sports Brands A&F American Eagle Urban Outfitters TOP CLOTHING BRAND PREFERENCES (AVERAGE-INCOME TEEN SURVEY) No. 1 No. 2 No. 3 No. 4 No. 5 Fall 2013 Nike Forever 21 American Eagle Action Sports Brands Hollister Spring 2013 Nike American Eagle Forever 21 Action Sports Brands Hollister Fall 2012 Nike Forever 21 American Eagle Action Sports Brands Hollister Spring 2012 Forever 21 Nike Action Sports Brands American Eagle Hollister Fall 2011 Nike American Eagle Forever 21 Hollister Action Sports Brands Spring 2011 American Eagle Nike Forever 21 Action Sports Brands Hollister Fall 2010 American Eagle Hollister Nike Action Sports Brands Aeropostale Spring 2010 American Eagle Nike Action Sports Brands Hollister Forever 21 Fall 2009 Action Sports Brands American Eagle Nike Hollister Forever 21 Spring 2009 American Eagle Action Sports Brands Hollister Nike Forever 21 Fall 2008 American Eagle Action Sports Brands Hollister Nike Aeropostale Spring 2008 American Eagle Action Sports Brands Hollister Nike A&F Fall 2007 American Eagle Hollister Action Sports Brands Nike A&F Spring 2007 American Eagle Hollister Action Sports Brands A&F Nike Fall 2006 American Eagle Action Sports Brands Hollister A&F Aeropostale 14

15 Top 5 Footwear Brands History TOP FOOTWEAR BRAND PREFERENCES (UPPER-INCOME TEEN SURVEY) No. 1 No. 2 No. 3 No. 4 No. 5 Fall 2013 Nike Vans Steve M adden Converse Sperry Top-Sider Spring 2013 Nike Vans Steve M adden Sperry Top-Sider UGG Australia Fall 2012 Nike Vans Sperry Top-Sider Steve M adden UGG Australia Spring 2012 Nike Vans Converse Steve M adden DSW Fall 2011 Nike Vans Steve M adden DSW Converse Spring 2011 Nike Vans UGG Australia Steve M adden DSW Fall 2010 Nike Vans Steve M adden Converse DSW/UGG Australia Spring 2010 Nike Vans UGG Australia Converse Steve M adden Fall 2009 Nike Vans Steve M adden UGG Australia Converse Spring 2009 Nike UGG Australia Vans Puma Steve M adden Fall 2008 Nike Vans Steve M adden Converse Adidas Spring 2008 Nike UGG Australia Steve M adden Adidas Puma Fall 2007 Nike Steve M adden Adidas Puma Vans Spring 2007 Nike Steve M adden Puma Adidas DSW TOP FOOTWEAR BRAND PREFERENCES (AVERAGE-INCOME TEEN SURVEY) No. 1 No. 2 No. 3 No. 4 No. 5 Fall 2013 Nike Vans Converse Sperry Top-Sider Adidas Spring 2013 Nike Vans Converse TOM S Sperry Top-Sider Fall 2012 Nike Vans Sperry Top-Sider Converse Adidas Spring 2012 Nike Vans Converse TOM S Sperry Top-Sider Fall 2011 Nike Vans Converse Sperry Top-Sider Journeys Spring 2011 Nike Vans Converse Sperry Top-Sider UGG Australia Fall 2010 Nike Vans Converse Adidas Journeys Spring 2010 Nike Vans Converse Puma UGG Australia Fall 2009 Nike Converse Vans Adidas Puma Spring 2009 Nike Vans Converse Adidas DC Shoes Fall 2008 Nike Vans Adidas Converse Puma Spring 2008 Nike Vans Adidas Converse Puma Fall 2007 Nike Adidas Puma Vans Converse Spring 2007 Nike Adidas Puma Vans Converse 15

16 Top Handbag Brands History Upper-Income Teens Fall 2013 Spring 2013 Fall 2012 Rank Brand % Total Rank Brand % Total Rank Brand % Total 1 Coach 26% 1 Coach 30% 1 Coach 36% 2 Michael Kors 21% 2 Michael Kors 18% 2 Michael Kors 9% 3 Louis Vuitton 7% 3 Louis Vuitton 7% 3 Vera Bradley 7% 4 Vera Bradley 6% 4 Vera Bradley 6% 4 Louis Vuitton 7% 5 Marc Jacobs 3% 5 Longchamp 4% 5 Tory Burch 4% 6 Kate Spade 3% 6 Juicy Couture 3% 6 Fossil 4% 7 Longchamp 3% Tory Burch 3% 7 Juicy Couture 4% 8 Gucci 3% Kate Spade 3% 8 Longchamp 2% 9 Tory Burch 2% 9 Chanel 3% 9 Kate Spade 2% 10 Fossil 2% 10 Gucci 2% 10 Gucci 2% Marc Jacobs 2% Average-Income Teens Fall 2013 Spring 2013 Fall 2012 Rank Brand % Total Rank Brand % Total Rank Brand % Total 1 Coach 33% 1 Coach 39% 1 Coach 43% 2 Michael Kors 21% 2 Michael Kors 14% 2 Vera Bradley 6% 3 Louis Vuitton 5% 3 Louis Vuitton 5% 3 Gucci 5% 4 Vera Bradley 5% 4 Gucci 5% 4 Michael Kors 5% 5 Gucci 4% 5 Vera Bradley 4% 5 Louis Vuitton 5% 6 Fossil 3% 6 Fossil 3% 6 Fossil 3% 7 Chanel 2% 7 Juicy Couture 2% 7 Juicy Couture 3% 8 Steve Madden 2% 8 Betsey Johnson 2% 8 Chanel 2% Guess 2% 9 Chanel 2% 9 Guess 2% 10 Juicy Couture 1% 10 Dooney & Bourke 2% 10 Betsey Johnson 1% 16

17 Teens Talk Fashion Down-Trending Brands She Says: Fall 2013* Spring 2013 Fall 2012 Rank Brand No Longer Worn % Total Rank Brand No Longer Worn % Total Rank Brand No Longer Worn % Total 1 Aeropostale 25% 1 Aeropostale 33% 1 Abercrombie & Fitch 35% 2 Abercrombie & Fitch 22% 2 Hollister 17% 2 Hollister 15% 3 Hollister 15% 3 Abercrombie & Fitch 10% 3 Aeropostale 12% 4 Justice/Limited Too 8% 4 Justice/Limited Too 5% 4 Justice/Limited Too 6% 5 Gap 5% 5 Gap 4% 5 Gap 3% 6 Forever 21 2% 6 American Eagle 2% 6 American Eagle 3% 7 American Eagle 2% 7 Baby Phat 2% 7 Forever 21 1% 8 Old Navy 2% 8 Old Navy 1% 8 Uggs 1% 9 Roxy 2% 9 Forever 21 1% 9 Juicy Couture 1% 10 Juicy Couture 1% 10 Six Brands Tied for 10th 1% 10 Three Brands Tied for 10th 1% He Says: Fall 2013* Spring 2013 Fall 2012 Rank Brand No Longer Worn % Total Rank Brand No Longer Worn % Total Rank Brand No Longer Worn % Total 1 Gap 11% 1 Hollister 12% 1 Gap 11% y 2 Abercrombie & Fitch 9% 2 Aeropostale 8% 2 Abercrombie & Fitch 10% 3 Hollister 8% 3 Gap 7% 3 Hollister 8% 4 Aeropostale 7% 4 Adidas 6% 4 American Eagle 5% 5 Adidas 6% 5 American Eagle 5% 5 Adidas 5% 6 American Eagle 4% 6 Abercrombie & Fitch 4% 6 Nike/Jordans 3% 7 Nike/Jordans 4% 7 Under Armour 3% Volcom 3% 8 Under Armour 3% DC 3% 8 Aeropostale 3% 9 Quiksilver 3% 9 Reebok 2% DC 3% 10 DC 3% Southpole 2% Quiksilver 3% * Reflects change in methodology accounting for upper-income teens in online survey only 17

18 Teens Talk Fashion Up-Trending Brands She Says: Fall 2013* Spring 2013 Fall 2012 Rank Brand % Total Rank Brand % Total Rank Brand % Total 1 Forever 21 6% 1 Forever 21 12% 1 Forever 21 12% 2 American Eagle 5% 2 H&M 5% 2 Urban Outfitters 7% 3 Urban Outfitters 5% 3 American Eagle 5% 3 American Eagle 6% 4 Brandy Melville 5% Hollister 5% 4 Victoria's Secret/PINK 4% 5 Nike/Jordans 4% 5 Victoria's Secret/PINK 4% 5 H&M 4% 6 Victoria's Secret 3% 6 PacSun 4% 6 PacSun 3% 7 H&M 3% 7 lululemon 3% 7 Miss Me 3% 8 J.Crew 3% 8 Urban Outfitters 2% 8 Free People 3% 9 Charlotte Russe 3% 9 Charlotte Russe 2% 9 Abercrombie & Fitch 3% PacSun 3% 10 Four Brands Tied for 10th 2% 10 Nike/Jordans 2% He Says: Fall 2013* Spring 2013 Fall 2012 Rank New Brand Starting To Wear % Total Rank New Brand Starting To Wear % Total Rank New Brand Starting To Wear % Total 1 Nike/Jordans 14% 1 Nike/Jordans 16% 1 Nike/Jordans 16% 2 Polo Ralph Lauren 12% 2 Polo Ralph Lauren 9% 2 Polo Ralph Lauren 15% 3 American Eagle 5% 3 Under Armour 4% 3 American Eagle 4% 4 Adidas 3% 4 American Eagle 3% 4 Vans 4% 5 Under Armour 3% Adidas 3% 5 Adidas 3% 6 Vans 3% 6 Diamond Supply Co. 3% 6 Diamond Supply Co. 3% 7 Vineyard Vines 3% 7 Hollister 2% 7 H&M 2% 8 Diamond Supply Co. 2% Vans 2% 8 Sperry's 2% 9 Levi's 2% 9 Express 2% 9 Abercrombie & Fitch 2% 10 Express 2% H&M 2% 10 Hollister 1% * Reflects change in methodology accounting for upper-income teens in online survey only 18

19 Fashion Trend Insights Action Sports Upper-Income Teens 47 Brands mentioned vs. 29 in Spring (-) PacSun losing mindshare 20% 18% 24-Survey Average = 10.3% 18% (+) Tilly s & Vans gaining 16% 14% 12% 10% 8% 6% 5% 7% 10% 8% 13% 11% 12% 11% 10% 9% 9% 9% 6% 14% 13%13% 12% 12% 10% 10% 9% 8% 9% 4% 2% 0% 19

20 Fashion Trend Insights Fast Fashion Upper-Income Teens 22-Survey Average = 21% (-) F21 remains No. 1 while losing mindshare (=) Charlotte Russe No. 2 maintaining share (=) H&M No. 3 maintaining share 40% 35% 30% 25% 20% 15% 10% 5% 0% 8% 11%13% 17% 12% 9% 14% 14% 10% 24% 25% 20% 16% 16% 33% 29% 30%32% 33% 34% 28% 25% 20

21 Fashion Trend Insights Refined Classic Upper-Income Teens 19-Survey Average = 14% (=) Polo Ralph Lauren maintaining share (+) Nordstrom moving up in rank (+) A&F moving up in rank 25% 20% 15% 10% 21% 21% 18% 16% 17% 17% 19% 14% 14% 15% 13% 14% 14% 14% 9% 10% 10% 11% 8% 5% 0% 21

22 Fashion Trend Insights Fashion Athletic Upper-Income Teens (+) Nike remains No. 1 gaining share (-) Under Armour losing mindshare (+) Lululemon holding share 25% 20% 18% 18% 18% 20% 23% 22% 15% Average = 15% 12% 15% 10% 9% 9% 5% 6% 5% 0% Spring Fall Spring Fall Spring Fall Spring Fall Spring Fall Spring Fall

23 Fashion Trend Insights Legacy Vertically Integrated Teen Retailers Upper-Income Teens 40% 26-Survey Average = 24.6% 35.6% (+) A&F moving up in rank; maintaining share 35% (-) AE moving down in share & rank 30% 25% 20% (-) Aero moving down in share & rank 15% 12.1% 10% 5% 0% 23

24 Most Popular Fashion Trend In School Right Now Fall 2013 Spring 2013 Rank Popular Fashion Trend % Total Rank Popular Fashion Trend % Total 1 Nike / Jordans 12% 1 Nike / Jordans 11% 2 Yoga Pants / lululemon 8% 2 Yoga Pants / lululemon 10% 3 High-Waisted Pants/Skirts 5% 3 Leggings 6% 4 Shoes 4% 4 Boots 5% 5 Boat Shoes 3% 5 Color Apparel 3% 6 Jeans / Skinny Jeans 3% Polo Ralph Lauren 3% 7 High Socks 2% 7 Jeans / Skinny Jeans 3% 8 Polo Ralph Lauren 2% 8 Diamond Supply Co. 2% 9 Maxi Dresses/Skirts 2% 9 Boat Shoes 2% 10 Athletic Wear 2% 10 Athletic Wear 2% Spring 2012 Fall 2011 Rank Popular Fashion Trend % Total Rank Popular Fashion Trend % Total 1 Yoga Pants 8% 1 Nike / Jordans 7% 2 Nike 6% 2 Feathers In Hair 6% TOMS Shoes 6% 3 Yoga Pants / lululemon 5% 4 Jeans / Skinny Jeans 5% 4 TOMS Shoes 5% 5 Leggings / Jeggings 4% 5 Jeans / Skinny Jeans 5% 6 Vans 4% 6 Boat Shoes 4% 7 Uggs 4% 7 Snapback Hats 4% 8 Snapback Hats 4% 8 Vans 3% 9 Boat Shoes 3% 9 High-Waisted Pants/Skirts 3% 10 Scarves 2% 10 Uggs 2% 24

25 Athletic Apparel Brands All Teens PREFERRED ATHLETIC CLOTHING BRAND - UPPER-INCOME TEEN SURVEY - ALL TEENS Fall 2013 Spring 2013 Fall 2012 Rank Brand % Total Rank Brand % Total Rank Brand % Total 1 Nike 70% 1 Nike 68% 1 Nike 70% 2 Under Armour 9% 2 Under Armour 11% 2 Under Armour 10% 3 Adidas 5% 3 Adidas 4% 3 Adidas 5% 4 Lululemon 3% 4 Lululemon 3% 4 Lululemon 1% 5 The North Face 1% 5 The North Face 1% 5 The North Face 1% PREFERRED ATHLETIC CLOTHING BRAND - AVERAGE-INCOME TEEN SURVEY - ALL TEENS Fall 2013 Spring 2013 Fall 2012 Rank Brand % Total Rank Brand %Total Rank Brand % Total 1 Nike 68% 1 Nike 64% 1 Nike 63% 2 Under Armour 11% 2 Under Armour 14% 2 Under Armour 16% 3 Adidas 5% 3 Adidas 5% 3 Adidas 5% 4 Lululemon 1% 4 Jordan 1% 4 Jordan 1% 5 Jordan 1% The North Face 1% 5 The North Face 1% Nike continues to maintain or gain share within athletic apparel Under Armour mindshare slipping 25

26 Athletic Apparel Brands Females PREFERRED ATHLETIC CLOTHING BRAND - UPPER-INCOME TEEN SURVEY - FEMALE Fall 2013 Spring 2013 Fall 2012 Rank Brand % Total Rank Brand % Total Rank Brand % Total 1 Nike 67% 1 Nike 67% 1 Nike 67% 2 Under Armour 9% 2 Under Armour 12% 2 Under Armour 12% 3 Lululemon 8% 3 Lululemon 7% 3 Adidas 5% 4 Adidas 4% 4 Adidas 3% 4 Lululemon 3% 5 The North Face 2% 5 The North Face 1% 5 The North Face 1% PREFERRED ATHLETIC CLOTHING BRAND - AVERAGE-INCOME TEEN SURVEY - FEMALE Fall 2013 Spring 2013 Fall 2012 Rank Brand % Total Rank Brand %Total Rank Brand % Total 1 Nike 66% 1 Nike 63% 1 Nike 64% 2 Under Armour 12% 2 Under Armour 15% 2 Under Armour 15% 3 Adidas 5% 3 Adidas 5% 3 Adidas 4% 4 Lululemon 2% 4 Lululemon 1% 4 The North Face 1% 5 The North Face 1% The North Face 1% 5 Soffe 1% Lululemon moves from 7% to 8% mindshare with upper-income females; only 1ppt behind Under Armour Lululemon l mindshare increasing i among average-income females as well 26

27 Headphones 3.0% HEADPHONE SHARE OF TEEN WISHLISTS 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% FA06 SP07 FA07 SP08 FA08 SP09 FA09 SP10 FA10 SP11 FA11 SP12 FA12 SP13 FA13 The percentage of teens asking for headphones as holiday/birthday gifts declined First year-over-year decline since Spring 2009 Percentage of teens planning to purchase headphones in next six months fell from 63% in Fall 2012 to 58% in Fall

28 Headphones 50% 45% 45% 46% 46% HEADPHONE BRAND PLANNING TO PURCHASE NEXT 40% 35% 30% 25% 20% 25% 22% 21% 15% 10% 5% 14% 11% 10% 6% 6% 5% 3% 4% 3% 3% 2% 2% 8% 9% 9% 0% Beats by Dr. Dre Apple Skullcandy Sony Bose JVC All others Fall 2012 Spring 2013 Fall 2013 When asked which brand of headphones teens plan to purchase next, Beats by Dr. Dre received 46% of responses, Apple received 25% and Skullcandy receive 10% Skullcandy s share of future purchases declined 100bp sequentially and 400bp y/y 28

29 Next Generation Eating Organic Do you eat organic food? Delta of respondents eating more versus less organic food versus a year ago 45% 40% 35% 30% 33% 40% 42% 39% 39% 45% 40% 35% 30% 39% 36% 31% 33% 35% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% Fall 2011 Spring 2012 Fall 2012 Spring 2013 Fall % Fall 2011 Spring 2012 Fall 2012 Spring 2013 Fall 2013 Number of teens eating organic food was flat y/y; Important to understand the preferences of next generation grocery shoppers (food & beverage for off premises consumption is ~$750B category) Of those teens that are eating organic, we are seeing them spend more on the category sequentially and year-over-year 29

30 Restaurants: Consistently #2 Rank In Terms % of Spend Survey Results Support Year of the Restaurant: The Second Course Early Stages of Restaurant Industry Recovery: Lack of Unit Growth Supply, Public Growth Stock Shortage, Growing Demand to Eat Out More Recipe For Success: Brand Equity+ Asset Light Growth + High-Margin Licensing Arrangements Limited Service Segment Benefitting Most: During Last Ten Survey Periods: Gained Momentum and Increased Overall Preference to 60% Today from 43% in Spring 2009 Due to Blurring of the Lines: Operators Tailoring Convenience Alternatives, Menu Relevance, Service Initiatives and Value Propositions Results in Shrinking Same-Store Sales Gap Between Segments Starbucks (SBUX) Accelerating Mind Share: Upper Income 18% Total, 83% by Cuisine i Proprietary Analysis By Cuisine Type: The Cheesecake Factory (CAKE) Accelerating Mind Share Maintained No. 1 Position Upper Income 14% Total, 200 bps > No. 2 and 400 bps > No. 3 Rank Within Hamburger Cuisine Type Red Robin (RRGB) Maintains Mind Share: Only Casual-Dining Operators In Top Ten Upper Income 10%+ For 4 of Last 5 Survey Cycles Maintain Neutral Until Traffic Trends Are Sustainably Positive 30

31 A Spotlight On Emerging Channels: Online Retailing Shopping Preferences By Channel Internet, 10% Mail Order, 6% Specialty, 27% Outlet, 14% Discount, 12% Major Chain/Dept Store/Off-Price, 30% 31

32 A Spotlight On Emerging Channels: Online Retailing Do You Shop Online? FEMALES YES MALES YES 78% 82% Do You Prefer To Shop Online Or In Store? FEMALES ONLINE MALES ONLINE 25% 37% FEMALES IN STORE MALES IN STORE 63% 75% 63% 32

33 A Spotlight On Emerging Channels: Online Retailing Regarding The Clothing You Buy Online, Which Do You Buy More From? Female Teens Male Teens Store Site 70% E-Tail Pure Play 30% Store Site 59% E-Tail Pure Play 41% 33

34 A Spotlight On Emerging Channels: Online Retailing Online Shopping By Category Other, 11% Accessories, 13% Personal Care, 6% Footwear, 22% Apparel, 29% Electronics, 20% 34

35 A Spotlight On Emerging Channels: Online Retailing Gender Differences When Shopping Online Accessories Personal Care Apparel Footwear Other Electronics Men Shop More Women Shop More 35

36 A Spotlight On Emerging Channels: Online Retailing Favorite Websites Female Teens RANK WEBSITE % TOTAL 1 Amazon 25% 2 Forever 21 9% 3 Nordstrom 6% Urban Outfitters 6% 5 American Eagle 5% 6 ebay 5% 7 Victoria's Secret 4% 8 Wanelo 3% 9 Etsy 3% 10 Brandy Melville 2% TOBI 2% Male Teens RANK WEBSITE % TOTAL 1 Amazon 35% 2 ebay 10% 3 Nike 9% 4 Eastbay 4% 5 PacSun 2% 6 CCS 2% Polo Ralph Lauren 2% 8 Karmaloop 1% Zumiez 1% 10 Three Sites Tied for 10th 1% 36

37 A Spotlight On Emerging Channels: Off-Price Retailing Do You Shop Off-Price Retailers? FEMALES YES MALES YES 71% 57% Is It Popular To Shop Off-Price OffPi Retailers? FEMALES YES MALES YES 52% 45% Do You Prefer To Shop Off-Price Retailers vs. Traditional Department Stores? FEMALES YES 42% MALES YES 37% 37

38 A Spotlight On Emerging Channels: Off-Price Retailing Reasons Teens Prefer Off-Price Retailing QUALITY PRICE/VALUE SELECTION CONVENIENCE 38

39 A Spotlight On Emerging Channels: Off-Price Retailing Reasons Teens Prefer Traditional Department Stores QUALITY THE EXPERIENCE SELECTION MORE POPULAR CONVENIENCE PRICE 39

40 Beauty & Personal Care: Gen Y (Teen Girls) Snapshot Total Beauty Spending Among Teens UPPER-INCOME Y/Y UPPER-INCOME SEQ -6% -8% AVERAGE-INCOME Y/Y -9% AVERAGE-INCOME SEQ -12% Top Skin Care Brand Top Cosmetics Brand Top Fragrance Brand UPPER-INCOME Neutrogena AVERAGE-INCOME Neutrogena UPPER-INCOME MAC AVERAGE-INCOME Cover Girl FEMALE Victoria s Secret MALE Ralph Lauren 40

41 Beauty & Personal Care: Beauty Retailers & Their Loyalty Programs Where Do You Most Often Shop For Beauty Products? Upper-Income Teens RANK BEAUTY STORE % TOTAL 1 Sephora 17% 2 Target 16% 3 CVS 10% 4 Walmart 10% 5 Ulta 9% 6 Walgreens 3% 7 MAC 3% 8 Nordstrom 3% 9 Mall 2% 10 Macy's 2% Average-Income Teens RANK BEAUTY STORE % TOTAL 1 Walmart 26% 2 Target 13% 3 Sephora 7% 4 Ulta 7% 5 Walgreens 4% 6 CVS 3% 7 Mall 3% 8 Bath & Body Works 3% 9 Macy's 2% 10 MAC 2% 41

42 Beauty & Personal Care: Beauty Retailers & Their Loyalty Programs Loyalty Program Participation Top Loyalty Programs For Beauty TEENS WHO BELONG TO A BEAUTY/ PERSONAL CARE LOYALTY PROGRAM 34% 4 RANK BEAUTYSTORE %TOTAL 1 Sephora 32% 2 Ulta 22% 3 MAC 5% Bath & Body Works 3% CVS 3% 6 Victoria's Secret 3% 7 Target 2% 8 Walgreen's 2% 9 Clinique 2% 10 Macy's 1% 42

43 Social Media Facebook Twitter exceeds Facebook as most favored for first time: PJC Teen Survey - Social Networking Fall-12 Spring-13 Fall-13 Change Most Important Social Network? Facebook 42% 33% 23% -10pp Twitter 27% 30% 26% -4pp Instagram 12% 17% 23% 7pp Google+ 6% 5% 3% -2pp Tumblr 3% 4% 4% - Pinterest 2% 2% 1% -1pp Other 2% 4% 17% 13pp* Don't Use Social lnetworks 7% 6% 2% -4pp Believe data was expected given trend toward Twitter as most favored Instagram now tied for second most popular p with Facebook Expect Facebook to continue to be a part of teens lives with more influence from other networks 43

44 Digital Media Apple Apple s mobile devices continue to gain popularity among teens iphone Ownership Among Teens Exceed 50% For First Time 55% of teens own an iphone compared to 48% in the Spring and 40% last fall Believe 5S/C could continue to push ownership higher 65% of teens plan on making iphone their next mobile device 24% expect Android from 23% in Spring 2013 Tablet Ownership Continues To Grow, ipad Holding Share 56% of teens surveyed owned a tablet from 51% Spring % ipad share flat vs Spring % of teens plan on buying a tablet in the next 6 months (vs. 17% Spring 2013) 64% plan to buy an ipad (52% full size/12% Mini) 44

45 Movie Rentals Netflix & Redbox are alternative video rental models gaining share from traditional channels Netflix (NFLX) streaming and Outerwall s (OUTR) Redbox kiosks are benefiting from the closing of movie rental retail stores (Blockbuster, etc) Retail Stores: 28% of teens currently rent movies at retail stores (32% in Fall-12), and just 3% expect to rent at retail stores in five years; share will shift online and to kiosks Netflix: DVD-by-Mail and Digital streaming address 54% of market today DVD-By-Mail: 5% of teens currently use DVD-by-Mail Downloads/Streaming: 49% currently download/stream movie rentals In 5 Years 59% of teens expect Netflix to be their primary source of movie rentals (55% in Fall-12) Outerwall/Redbox: Kiosks keep share from retail stores (Blockbuster) closing & declining DVD-by-mail Kiosks: 18% currently use kiosks to rent movies (flat from 18% in our Fall-12 survey) In 5 years 17% of teens expect Redbox to be their primary source of movie rentals (no significant chg from the 18% using kiosks today) 45

46 Video Games Teens represent over one-third of video game players games represent 7% of teen spending Teen interest in traditional console gaming has grown ahead of the new console launches 35% of teens plan to spend more time playing video games next year vs. 26% in Spring-12; this was the highest since Spring-08 Interest In Next Gen Consoles Is High Of the 5,564 gamers surveyed (those that play games at least once per month), 86% indicated they are aware next gen consoles (PS4 & Xbox One) are expected to launch later this year 49% of teen gamers expect to purchase one of the next gen consoles Used Market Remains Critical Component of Industry 26% of gamers said they will trade in an old console and game library to purchase new consoles Following Microsoft s now infamous policy reversal post-e3, we know that both new consoles will support used games 64% of teen gamers said they purchase used games (the highest we ve seen in multiple years) and 56% of those purchase them at GameStop (Walmart next closest at 12%) 46

47 Media & Entertainment Teens broader radio listenership remains at elevated levels positive for both Pandora (P) and radio (CMLS, SIRI) : Both broadcast and streaming radio remain at elevated levels from our 1H12 survey as the listenership of mp3 and CDs continues to shrink, boding well for radio broadcaster CMLS, digital radio streamer Pandora and satellite radio operator SIRI. Teens like watching films in premium formats including IMAX Corp (IMAX): IMAX remains the most preferred way to watch a movie in theaters, interestingly with-in home video, streaming continues to gain share -- improving from 4% in 2012 to 11% in Increasing interest in home video boding well for Lionsgate: Interest in home video entertainment increased from 25% in 1H12 survey to 42% in 2H13, boding well for teen centric studio like LGF. 47

48 Appendix Stock Highlights: Teen Retail Stock Highlights: g Global Fashion Brands Stock Highlights: Active & Healthy Lifestyle Stock Highlights: Restaurants Stock Highlights: Multi-Brand & Specialty Retail Stock Highlights: Digital & Social Media 48

49 Stock Highlights: Teen Retail GCO (+) Footwear A Pocket Of Relative Outperformance; Mens Accessories Contracts On Snap Back Maturation Footwear continues to gain share in the fashion wallet; shoes are a fashion accessory of choice; Vans & Converse among top cited brands Adjusting estimates on accel. maturation in the snap-back hat trend among males; 15%-20% of Lids asst; co. is managing inventory tightly ANF (-) Risk Profile Elevated Near-term; Maintaining Positive Bias On Improved Visibility Into Model Realignment Maintaining bias into 2014 in hopes that visibility surrounding cost rationalization and business model realignment efforts will improve Adjusting estimates on extended recovery timeline; high beta stock; domestic stabilization needed, global brand growth still exists AEO(-) Share Losses Continue; Intrigued By Engagement; Recalibrating Estimates Rank & mindshare decelerated d among both males and females, reaching the lowest level l since Fall 2011 (onset of colored denim cycle) l) Modest improvement in brand reengagement suggests risk reward is fairly balanced; trimming near-term estimates ARO (-) Negative Brand Equity Persists Despite Significant Merchandise Changes; Brand Skewing Younger Aero remains brand cited as no longer worn by teens; aging up the brand curve results in Aero positioning toward a younger teen Recovery is prolonged; supply exceeds demand; significant store closures and cost reengineering appears necessary Lowering estimates in view of mindshare losses; hope trade supporting shares as fundamentals continue to weaken PSUN (-) Downgrade To Neutral; Action Sports Brands Gain, PacSun Cedes; Elevated Comp For Profit Is Key Risk Action Sports moved higher in rank while PacSun ceded share in the category, particularly among female teens Pathway to profitability dependent on need to recapture share at accelerating comp sales rate; +MSD needed, current trend +LSD at best Lowering estimates; higher-margin direct sourced mix under pressure (denim); profitability deferred by additional 9-12 months TLYS (+) Growth Play Tied To Action Sports Lifestyle Evolution; Share Gainer In Survey; Upside To Estimates WTSL, BODY (-) Fast Fashion Cedes Share Among Females; Channel Shift & Frequency Challenge Positioning 49

50 Stock Highlights: Global Fashion & Lifestyle Brands KORS (+) Upgrading To Overweight; $90 PT (26x FY15 $3.45) Share gainer across multiple lifestyle categories: No. 2 handbag (21% share); No. 2 watch (15%); No. 5 jewelry (5%) Intent to purchase handbag in next 6 months for MK consumer: 64% upper-income and 73% average-income say "Yes" European checks suggest strong market share gains; store expansion underway Raising estimates: F14 from $2.75 to $2.78; F15 from $3.32 to $3.45; PT $73 to $90; EPS power ~$6.00/share RL (-/=) Downgrading To Neutral; $170 PT (17x FY15 $10.02) Fashion spending down MSD sequentially and Y/Y; RL is No. 5 for upper-income; No. 6 average-income Europe is improving for RL but expect Asian woes to continue Investment cycle into FY15; changes parameters for upside and valuation; trimming multiple No estimate revisions; PT from $200 to $170 DECK (+) Raising PT To $72 (16x FY14 $4.50); Intact Multi-Year Recovery Thesis UGG brand in survey in top-ten; No. 8 for upper-income; No. 9 for average-income females Mindshare slips in upper-income as brand evolves into winter wardrobe staple Est. teens ~25% of UGG sales; less dependent on teen as brand evolves UK checks (11% of sales) suggest pick-up in biz; cleaner distribution Stock near-term trades on potential for sales and margin outperformance; we believe this is possible starting in Q3 VFC (+/=) Raising PT To $197 (16x FY14 $12.32); Strength Of Vans In Teen Survey No. 2 brand Vans sees increases in mindshare: from 10% to 12% for all upper-income teens; from 7% to 9% for average-income TNF stays No. 5 (1% share) for preferred athletic clothing brands for upper-income; slips to No. 6 for average-income Raising estimates ; F13 from $10.90 to $10.98; F14 from $12.20 to $12.32; PT from $183 to $197 50

51 Stock Highlights: Global Fashion & Lifestyle Brands Assuming Coverage COH (-/=) Reducing PT To $53 (13x FY15 $4.10); Trimming Estimates As Mindshare Fades Assuming coverage of COH from Tamminga at Neutral Coach still No. 1 handbag but at a share loss; from 30% to 26% for upper-income Intent to purchase handbag in next 6 months for Coach consumer: only 38% upper-income and 52% average-income say "Yes" Trimming estimates: Q1 (Sep) from $0.79 to $0.76; FY14 from $3.73 to $3.71 and FY15 from $4.20 to $4.10 FOSL (+/=) Portfolio Share Remains Strong In Teen Survey; PT of $121 (17x FY14 $7.31) Assuming coverage of FOSL from Tamminga at Neutral; positive bias Licensed brand Michael Kors ranks No. 2; Fossil ranks No. 4 as preferred watch brand Fossil watch portfolio share steady in Fall 2013 at 25.2% vs. 25.8% in Spring 2013 EU recovery play (Europe is 28% of sales, Germany is largest market); Long-term Asian distribution growth 51

52 Stock Highlights: Active & Healthy Lifestyle NKE (+) Remains favorite apparel brand, footwear brand, athletic apparel brand and athletic footwear brand For the third consecutive survey, Nike ranks as the No. 1 apparel and footwear brand among upper and average-income teens Increases mindshare as preferred apparel brand and sets new survey records Nike/Jordan the most popular fashion trend at school right now for second consecutive survey Athletic apparel mindshare maintains i or sets new record highs h as Nike builds lead over Under Armour DKS (=/+) Remains favorite sporting goods store; beneficiary of Nike s strength Dick s Sporting Goods remains the No. 1 sporting goods retailer among both upper-income and average-income teens Mindshare declined among upper-income teens, but mostly due to higher mix of responses from West region (smaller store base in West) Mindshare slips slightly to 28% among average-income teens; down modestly from 29% in Spring 2013 and 30% in Fall 2012 Nike (17% of sales) remains preferred clothing and footwear brand across athletic and fashion categories among both income groups UA (=/-) Athletic brand mindshare slips to new lows among teens; Brand has broad consumer base to limit impact Under Armour remains No. 2 most preferred athletic apparel brand among both income groups and genders Athletic apparel mindshare remains well behind Nike, spreads at highest point in survey history Lululemon share improved to 8% (highest in history of survey) with upper-income women; may pass UA in Spring 2014 SKUL (-) Brand desirability slips again; Signs of teens losing interest in headphone category Skullcandy falls to 15% from 16% in Spring 2013 and 18% in Fall 2012 when asked what type of headphones teens own Intent to purchase decelerates; 10% plan to buy Skullcandy headphones as next pair, down from 11% in Spring 2013 and 14% in Fall 2012 Cycle appears post -peak; Share of teens asking for headphones as gifts declines sequentially and year-over-year; first y/y decline since 2009 Beats by Dr. Dre and Apple continue to gain share in the category 52

53 Restaurants: Stock Highlights Top Pick: Starbucks SBUX (+) Global Growth Portfolio Potential Upside: Lower Coffee Costs Conservative Comp Estimates Dividend Increase Kraft Resolution Price Target: $85 Based on 18x FY14E EV/EBITDA Average of 12x Retail and 25x CPG Top Pick: The Cheesecake Factory CAKE (+) Global Growth Portfolio Store Growth Domestically Asset-Light Growth Internationally Long-Term CPG Business in Place Price Target: $50 Based on 10x FY14E EV/EBITDA Potential Upside From International Franchise Units: 1 Store = $0.02+ in EPS/unit or = $1 Mil. + in EBITDA Neutral Call Out: Red Robin RRGB (+/-) Maintaining Teen Survey Mind Share by Cuisine Potential Upside: November Analyst Day Price Target: $68 Based on 25x FY14E EPS Maintain Neutral Until Traffic Trends Are Sustainably Positive 53

54 Stock Highlights: Multi-Brand & Specialty Retail URBN (+) Focused On An Older Customer, But A Perennial Top Ten Urban Outfitters remains on the radar of teens, with upper-income teens voting the brand No. 6 and upper-income women (who have historically proven to be leading indicators to style, fashion, brands and trends) ranking UO at No. 3 UO showing up in top three brands that upper-income women have recently started wearing UO ranking as No. 5 preferred website among upper-income teens and No. 3 among upper-income women JWN (+) Favored Retailer & Top E-Commerce Destination Upper-income teens voting Nordstrom as No. 7 destination to shop for apparel; young women voting Nordstrom as their No. 5 favorite retailer Nordstrom showing up in the top ten across multiple categories apparel, jewelry, footwear, beauty and loyalty Nordstrom a top five destination among upper-income women when shopping online LTD (+) Strength In Fragrance & Apparel; Survey Points To Victoria s Secret As A Trending Brand Victoria s Secret and Bath & Body Works continue to increase mindshare among teens and are the dominant fragrances Victoria s Secret, again, shows up in not just fragrances, but also as a preferred apparel brand demonstrating its multicategory reach ULTA (+) Favored Beauty Destination & Loyalty Program For Beauty/Personal Care Upper-income teens voting Ulta as No. 2 loyalty l program for beauty/personal care with solid ld 22% mindshare Ulta ranking as No. 5 top beauty destination among upper-income women and No. 4 among average-income women Ulta in the process of rolling out a much more understandable (points versus certificate) program 54

55 Stock Highlights: Digital, Social Media & ecommerce AAPL (+) Apple Remains Most Popular Technology Brand Among Teens 55% iphone ownership makes iphone most important mobile platform for teens Path to 60%+ share remains intact FB (+/-) Facebook Now Second To Twitter As Most Favored Social Network 23% of teens chose FB as most important social network, 26% Twitter Instagram tied with FB at 23%; continues to gain favor AMZN (+) Continues To Gain Traction Among Teens 31% of teens chose AMZN as their favorite ecommerce destination, up from 23% in previous survey 33% of respondents live in a household with Prime membership, up from 29% in Spring % of respondents say they prefer to shop online, up from 18% in Spring 2013 EBAY (+) Popularity Among Teens Rebounded In Most Recent Survey 8% of teens chose EBAY as their favorite ecommerce destination, up from 5% in previous survey 32% of respondents say they prefer to shop online, up from 18% in Spring

56 Stock Highlights: Video Games & Online Content GME (+) Pre-Owned Mindshare is Growing with No Sign of Incremental Competition Of gamers who trade in their games, 56% choose GameStop, consistent with the results observed during the Spring-13 survey. Walmart is the #2 market share leader with only 12% used game share among teens (a significant share gap). ATVI, EA, TTWO (+) Console Gaming Continues to Be an Important Activity Among Teens Today Spending by category data suggests male teens from upper income households spend 11% of their disposable wallet share toward video games, a 100 bps expansion vs. our Fall 2012 survey results. 35% of teen gamers indicated they expect to play more video games next year vs. just 26% during the Fall-12 survey. OUTR (+) Redbox Share Among Teens Remains Stable 18% of teens indicated they currently use DVD rental kiosks as a primary source of movies, unchanged from Fall-12. Among movie services teens expect to use most over the next five years, Netflix and Redbox topped the list at 59% and 17%, respectively. NFLX (=) Strong Mindshare Despite Limited Selection As expected, renting from retail stores is decreasing in popularity; 28% of teens use stores today and 3% expect to use retail rental tl stores in five years. Netflix continues to have strong mindshare and, despite having a limited selection of newer release films for streaming, remains well positioned for growth in the movie rental category. 56

57 Analyst Biographies & Coverage Lists (Analysts listed in speaking order) Steph Wissink is a principal, senior research analyst and co-director of investment research. Wissink joined Piper Jaffray in May 2002 and has served in various capacities within Investment Research including as an associate analyst on the consumer team for eight years. As a senior analyst, Wissink i focuses on teen/youth specialty retail, authoring reports on youth spending, fashion brands, and retail markets. Wissink i spearheads Piper Jaffray's bi-annual Taking Stock With Teens consumer insight project in which nearly 20,000 teens, young adults, and their parents are surveyed each year. Wissink combines her interest in youth marketing and generational psychology with her professional experience by serving on the National Advisory Board for DECA. Associate: Maria Vizuete Coverage Includes: ANF, ARO, AEO, BODY, CRI, GPS, GCO, HAS, JAKK, MAT, PLCE, PSUN, RUE, SUMR, TLYS, WTSL, ZUMZ Erinn Murphy is a vice president and senior research analyst at Piper Jaffray covering global fashion & lifestyle brands. Murphy was raised in the Middle East and is passionate about international markets and has a strong affinity for languages with competencies in both French and Arabic. Murphy joined Piper Jaffray in January 2005 as an associate analyst in the retail sector. In December 2008, she expandedher international experience by joining ExxonMobil's gas & power marketing group as a natural gas negotiator and a senior supply/demand planner. Murphy re-joined Piper Jaffray in 2011 on the consumer team and now covers the global fashion and lifestyle brands. Sheholds a bachelor's degree in economics and French from Calvin College. Associate: Eric Johnson Coverage Includes: COH, CROX, DECK, FOSL, GIII, GES, KORS, PVH, ZQK, RL, SHOO, VFC, WWW 57

58 Analyst Biographies & Coverage Lists (Analysts listed in speaking order) Sean Naughton is a vice president and senior research analyst covering the consumer sector, specifically companies contributing to active and healthy lifestyles. Prior to joining Piper Jaffray in 2007, Sean worked for Target in capital investment analysis responsible for new and existing store valuations. Sean holds the Chartered Financial Analyst designation. Associates: Adam Engebretson, CFA & Jared Madlin Coverage Includes: BGS, BGFV, BDE, CAB, COST, DKS, FINL, FL, FOXF, HAIN, HIBB, LTM, NGVC, NKE, SKUL, TGT, TFM, CLUB, UA, UNFI, VSI, WFM Nicole Miller Regan is a managing director and senior research analyst at Piper Jaffray, where she focuses on the restaurant sector. Prior to joining Piper Jaffray in 2006, Regan worked in equity research at ThinkEquity Partners in Minneapolis, and at Sterne, Agee & Leach in New Orleans. In 2006, she was ranked No. 1 Stock Picker, related to 2005 coverage of her universe, by StarMine. Senior Associate: Josh Long, CFA Coverage Includes: AFCE, BJRI, BBRG, EAT, BKW, CAKE, CMG, DRI, DFRG, DNKN, BAGL, GMCR, IRG, MCD, PNRA, RRGB, RUTH, SONC, SBUX 58

59 Analyst Biographies & Coverage Lists (Analysts listed in speaking order) Neely Tamminga is a managing director and senior research analyst at Piper Jaffray focusing on specialty retailing: women's apparel & accessories, and personal products. Tamminga ranked as a top sell-side analyst in The Wall Street Journal Best on the Street analyst survey in 2006 and 2011 for her coverage in broadline and apparel retailers. In 2010, FT/Starmine ranked Tamminga No. 2 in Stock Picking for her 2009 coverage in Specialty Retail. In 2009, FT/Starmine ranked Tamminga No. 2 Industry Estimator for her 2008 coverage in Personal Products. Tamminga has also received recognition by Institutional Investor magazine for her coverage in the apparel & footwear, department stores, and hardlines retailing sectors. Prior to joining Piper Jaffray in 2002, Tamminga worked at A.G. Edwards & Sons, Inc. in St. Louis, where she covered specialty apparel retailing companies. Associate: Kayla Berg Coverage Includes: ANN, ASNA, CACH, CHS, CBK, CWTR, COTY, EL, EXPR, GMAN, HSNI, IPAR, JCP, KIRK, KSS, LTD, NWY, JWN, RH, ROST, ULTA, URBN, VVTV, VRA, WSM Gene Munster is a managing director and senior research analyst at Piper Jaffray, specializing in Internet. He joined Piper Jaffray in Munster's Internet focus includes the US, Europe, China & Latin America. In addition, Munster has covered the Digital Media space since 1995, including Apple. He has authored several key industry reports on technology and is quoted frequently in key financial and technical news journals. Senior Associate: Doug Clinton Associate: Matt Lebo Coverage Includes: AMZN, ANGI, AAPL, BIDU, DRIV, EBAY, FB, GOOG, GRPN, IACI, LNKD, LOGM, MCHX, MELI, RLOC, SINA, MOBI, PRTS, VCLK, VIPS, WWWW, YHOO, YNDX, YELP, YY 59

60 Analyst Biographies & Coverage Lists (Analysts listed in speaking order) Mike Olson is a managing director and senior research analyst at Piper Jaffray covering online media, online travel, and video games. Olson has been with Piper Jaffray covering companies in these industries since 2001 and has authored numerous industry reports, including "Internet Video: Field of Dreams or Nightmare on Elm Street," "The Next Leg of Online Travel," and "Pwned: How Casual Games Changed The Gaming Landscape." Olson was recognized as the No. 2 stock picker and earnings estimator t in the 2011 Financial i Times / StarMine Internet & Catalog Retail category and was ranked in the 2010 Wall Street Journal "Best On The Street" for the Leisure Goods & Services category. Associates: Andrew Connor & Ryan Wright Coverage Includes: ATVI, ADBE, AKAM, AVID, CSTR, CTRP, DLB, DTSI, EA, EXPE, GME, GLUU, AWAY, KYAK, LLNW, NFLX, OPEN, OWW, PCLN, RNWK, ROVI, TTWO, TIVO, TRIP, ZNGA James Marsh is a managing director and senior research analyst at Piper Jaffray, following entertainment, radio and television broadcasting, outdoor advertising, and publishing companies. Previously, he co-founded Hanover Square Capital Management, LLC., a hedge fund focused on the Consumer and Media sectors. Prior to that, Marsh covered the radio and television broadcasting, publishing and outdoor advertising sectors at Cowen & Co., Robertson Stephens and Prudential Securities. In 2004, Marsh ranked third in stock picking for the broadcasting & entertainment sector in The Wall Street Journal's "Best on the Street" analyst survey. James is a Chartered Financial Analyst, as well as a Certified Public Accountant. Associate: Stan Meyers Coverage Includes: BONA, CKEC, CBS, CHRM, CNK, CMLS, DISCA, DWA, ENT, IMAX, LAMR, LGF, MDCA, MM,NCMI, P, RLD, RGC, SNI, SIRI, IPG, VIAB, DIS 60

61 Important Research Disclosures Analyst Certification Stephanie Wissink, Erinn Murphy, Nicole Miller Regan, Sean Naughton, Neely Tamminga, Gene Munster, Mike Olson, James Marsh, 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 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. Piper Jaffray research analysts receive compensation that is based, in part, on the firm's overall revenues, which include investment banking revenues. 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 pp 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 technical research products are based on different methodologies and may contradict the opinions contained in fundamental research reports. Overweight ih (OW): Anticipated ii 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. 61