consumer - piper jaffray · 2017-10-11 · industry note consumer october 11, 2017 taking stock...

I N D U S T R Y N O T EO c t o b e r 1 1 , 2 0 1 7

ConsumerTaking Stock With Teens Survey - Fall 2017 Results

Erinn E. MurphySr Research Analyst, Piper Jaffray & Co.612 303-8356, [email protected]

Nicole Miller ReganSr Research Analyst, Piper Jaffray & Co.612 303-6637, [email protected]

Michael J. OlsonSr Research Analyst, Piper Jaffray & Co.612 303-6419, [email protected]

Sam KempSr. Research Analyst, Piper Jaffray & Co.612 303-6179, [email protected]

Stan MeyersSr. Research Analyst, Piper Jaffray & Co.212 284-5037, [email protected]

Related Companies: Share Price:AAPL 155.90ADS GR 194.77AMC 13.85AMZN 987.20ATVI 61.45CMG 310.88CNK 36.00COH 40.00DECK 71.62EA 117.82EBAY 38.84FB 171.59FOSL 8.48IMAX 21.75JCP 3.54JWN 43.38KORS 47.56LB 42.95LGF/A 30.57MCD 160.58NFLX 195.08NKE 51.53P 7.85PVH 126.04RGC 16.00RL 87.22SBUX 55.42SHOO 42.50SNAP 14.34TTWO 102.67UAA 16.84VFC 64.51ZNGA 3.71

INDUSTRY RISKS

Reliance on top mgmt, consumer preferencechanges, consumer spending, FX, competition.

CONCLUSIONWhat surprised us most in our Fall 2017 Teen Survey was the stark decline of Nike. Incontrast, adidas achieved new highs. Overall, larger brands are ceding share for smallbrands. Emerging on the scene was notable strength in streetwear (Vans, Supreme).Accessories spending is the most muted we've seen. Food/restaurant spend dipped frompeak but remain a focal point of teen spending. Starbucks remains the only concept withDD% share. The shift online strengthened with 49% of teens citing Amazon as their favoritewebsite. In video games, the mix shift to full game downloads is playing out at a morerapid pace than many expect. Next phone purchase intent peaked again for Apple (82%).Snapchat bolstered its social media lead and Instagram engagement continues to impress.Unsurprisingly, on-demand music & SVOD services continue roll up legacy providers aspreference for linear TV fell 300 bps Y/Y.

Actionable Movers In Teen Results:

• (+) Biggest Brand Gainers: adidas, Amazon, Apple, American Eagle, Birkenstock(private), Gucci, Starbucks, Supreme (private), Tommy Hilfiger.

• (-) Largest Brand Losers: Facebook, Fossil, Michael Kors, Nike, Pandora, RalphLauren, Steve Madden, Tory Burch (private), UGG (DECK), Under Armour.

Key Themes In The Data:1. While overall teen spending was down 4%, fashion as a percent of the budget was

steady Y/Y at 38% of the wallet. Restaurants remain a focal point, albeit at perhapspeak levels as spending on food remained the single largest category at 22% of theupper teen wallet (vs. a high of 24% in Spring 2017).

2. Athletic apparel trends are moderating as Nike's share losses are not fully offset byrise of adidas. Within footwear, we are still seeing a strong athletic appetite by females(athletic now represents 73% of female footwear preferences vs. 67% last year).Newer trends include denim, Streetwear/culture & 1990s/retro.

3. Teens estimate they spend 17% of their time online when shopping - up from 15%last year. Traditional channels (dept. stores plus specialty) now represent 38% of timespent vs. 42% last year.

4. Amazon is 49% of teens' favorite website - up 600 bps from Spring.5. Teens who anticipate downloading most of their purchased video games reached 50%,

a significant jump from 45% in Spring.6. Facebook saw a 600 bps decline in engagement, driven by younger, newly sampled

cohorts not adopting Facebook at rates of prior cohorts. This is offset by increasingstrength in use and engagement in Instagram.

Demographic Breakdown & Spending Results: In our 34th semi-annual Taking StockWith Teens Fall survey we spoke with 6,100 teens across 44 states in the U.S. with anaverage age of 15.9 years. We split our data into upper-income HH ($101k/year) andaverage-income HH ($55k/year). The gender split this Fall was 46% female/54% males -similar to the last four surveys. Geographically, we received the most responses from theSouth (45%) and Midwest (32%) with the balance from the West & Northeast. Spendingoverall for teens contracted 4% Y/Y. Looking at wallet allocation, food spend moderatedfrom 24% to 22% share of wallet. "Car" and necessities spend ticked higher.

of 66

Piper Jaffray does and seeks to do business with companies covered in its research reports. As a result, investors should be awarethat the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as onlya 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 on pages 65 - 66 of this report or at the following site:http://www.piperjaffray.com/researchdisclosures.

mailto:[email protected]





http://www.piperjaffray.com/researchdisclosures

Taking Stock With TeensA Collaborative “GEN Z” Insights Project

Fall 2017

of 66

Investment Risks

Risks to achievement of investment objectives include, but are not limited to, the following:

• 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

of 66

Taking Stock With Teens

Survey is executed in partnership with DECA

The source for all charts/tables within this report is Piper Jaffray.

National survey of teens measuring:

• Spending Patterns

• Channel Preferences

• Product Trends & Cycles

15.9 Average Age

35% Part-Time Employed

1,500 teensElectronic

surveys

$101,000 Household income

Represents top 20% of

U.S. household units

4,600 teensElectronic

surveys

$55,000 Household income

Aligns more closely

with U.S. median

UPPER-INCOME GROUP

AVERAGE-INCOME GROUP

6,100 Responses

34th Semi-Annual Proprietary Teen Research Project

of 66


Executive Summary

• Spending Is Down Overall By 4% Y/Y For Teens; 38% Of Budgets Spent On Fashion

• Monitoring A Cresting In “Food” Spend & Uptick In “Car” / Necessity Spend

• Athletic Trend Evolving Led By NIKE Declines; adidas Reaches Yet Another High

• Culture-Oriented/Streetwear Fashion Trends Surging: Vans, Supreme

• Amazon Captures Nearly 50% Of GenZ’s Vote For Favorite Website

• Accessorizing Less? 75% Of Females Do Not Plan To Buy A Handbag Next

• Intent To Buy iPhone Reaches High; Over 80% of GenZ Will Choose iPhone Next

• Video Game Download Momentum – 50% Will Download More Vs. 45% In Spring

• Snapchat & Instagram Engagement Ticks Up; Facebook Engagement Declines

• On-Demand Music & SVOD Services Continue Share Gain From Legacy Providers

of 66

Global Fashion & Lifestyle BrandsClothing, Shoes, Accessories & Connected Devices

38% of Teen Spending

of 66


Teen Spending Declined >4% Y/Y Fall vs. -2% Y/Y Spring

Male’s Wallet Share

1 Food 22%

2 Clothing 17%

3 Video Games 11%

Female’s Wallet Share

1 Clothing 24%

2 Food 22%

3Personal Care/

Accessories 16%

$2,450/YrGenZ contributes $830B (7% U.S. retail sales)*

what teens estimate they spend each year

*Source: Fung Global Retail & Technology

of 66


Athletic Trend Evolving Led By Nike; adidas Ticks Up

Rank Spring 2016 % Rank Fall 2016 % Rank Spring 2017 % Rank Fall 2017 %

1 Nike 21% 1 Nike 29% 1 Nike 31% 1 Nike 23%

2 American Eagle 8% 2 American Eagle 9% 2 American Eagle 10% 2 American Eagle 11%

3 Forever 21 7% 3 Forever 21 5% 3 Forever 21 5% 3 Adidas 4%

4 Ralph Lauren 6% 4 Ralph Lauren 4% 4 lululemon 3% 4 Forever 21 4%

5 Hollister 4% 5 Urban Outfitters 3% 5 H&M 3% 5 Hollister 4%

6 PacSun 3% 6 H&M 3% Adidas 3% 6 PacSun 3%

7 Urban Outfitters 3% 7 PacSun 2% 7 Hollister 2% 7 lululemon 3%

Victoria's Secret 3% 8 Adidas 2% 8 Urban Outfitters 2% 8 H&M 3%

9 H&M 3% 9 Vineyard Vines 2% Vans 2% 9 Urban Outfitters 3%

10 Adidas 2% 10 Victoria's Secret 2% 10 PacSun 2% 10 Supreme 3%

Ralph Lauren 2%

Upper-Income Favorite Apparel Brand (All Teens)

• Nike, while still No. 1, moves from 29% share as preferred apparel brand to 23%

• Adidas doubles its mindshare from 2% to 4% as it moves from No. 8 to No. 3

• American Eagle captures another double-digit % mindshare

• Supreme, makes its foray into top-10 preferred apparel brands (male led)

of 66


Athletic Trend Evolving Led By Nike; adidas Ticks UpUpper-Income Favorite Footwear Brand (All Teens)



2 Vans 10% 2 Vans 9% 2 Vans 9% 2 Vans 12%

3 Converse 7% 3 Converse 7% 3 Adidas 8% 3 Adidas 11%

4 Adidas 4% 4 Adidas 6% 4 Converse 6% 4 Converse 7%

5 Sperry 3% 5 Steve Madden 2% 5 Steve Madden 3% 5 Birkenstock 2%

6 DSW 3% 6 Sperry 2% 6 Sperry 2% 6 DSW 2%

7 Steve Madden 3% 7 DSW 2% 7 DSW 2% 7 Foot Locker 2%

8 Foot Locker 2% 8 Birkenstock 2% 8 Foot Locker 1% 8 Sperry Top-Sider 2%

9 UGG 1% 9 Foot Locker 1% 9 Birkenstock 1% 9 New Balance 1%

10 TOMS 1% 10 Nordstrom 1% 10 Payless ShoeSource 1% 10 Steve Madden 1%

UGG 1%

• Nike, while still No. 1, moves from 51% share as preferred footwear brand to 46%

• Adidas almost doubles mindshare from 6% to 11% as it moves from No. 4 to No. 3

• Vans strengthens its No. 2 spot hitting 12%; Birkenstock rounds out top 5

• Steve Madden & UGG move down considerably (now tied for No. 20)

of 66


Athletic Apparel Moderates As Brand Leadership RotatesUpper-Income Favorite Apparel Brand (All Teens)

• 33% of preferred apparel brands are “athletic,” down from 41% in Spring and 35% in Fall

• Nike’s 800 bps of share erosion accounted for the entire loss vs. Spring; adidas continued to gain

of 66


Athletic Footwear Inches Higher For Females

• 73% of females prefer an athletic brand of footwear, up from 67% last year (below)

• 86% of males prefer an athletic brand of footwear, even with the last two surveys

Upper-Income Favorite Footwear Brand (Females)

of 66


The Big Three Athletic Brands (Y/Y Comparison)

Nike (No. 1 brand) seeing more share loss from males vs. females

• Preferred clothing: UI males from 44% to 36% share Y/Y; AI males from 40% to 36%

• Preferred footwear: UI males from 66% to 59% share Y/Y; AI males from 65% to 57%

• Preferred clothing: UI females steady at 7% Y/Y; AI females from 12% to 11%

• Preferred footwear: UI females steady at 30% Y/Y; AI females steady at 38% Y/Y

• Nike/Jordan declined as “top-fashion trend for males” from 19% to 12%

• As a performance athletic brand, Nike lost share among both genders & both categories

Adidas gaining share across both genders but more notably among males

• Preferred clothing: UI and AI males saw the same move from 3% to 6% share Y/Y

• Preferred footwear: UI males from 6% to 14% share Y/Y; AI males from 6% to 13%

• Preferred clothing: Not in the top-ten for females of either income demographic

• Preferred footwear: UI females from 5% to 7% Y/Y; AI females from 4% to 7%

• Adidas is No. 1 “new” brand that males are wearing & No. 3 for females

• As performance athletic brand, adidas gained share among both genders & categories

Under Armour being boxed out by resurgent adidas & retro-category growth

• Preferred apparel brand (UI males), UAA fell out of top-ten, from No. 8 to No. 11 Y/Y

• Preferred apparel brand (AI males), UAA fell from No. 6 to No. 9 Y/Y (2% share)

• Among upper-income females, UAA only received one vote as preferred apparel brand

• Under Armour still cited as the No. 1 “old” brand that males are no longer wearing

of 66


Brands That Made Significant Upwards Moves In Top 20

Supreme

GUCCI

BIRKENSTOCK

of 66


Brands That Made Significant Upwards Moves In Top 20

• Supreme ranked in the Top 10 as preferred apparel brand (1st time)

• No. 7 up & coming brand from males; No. 10 preferred website

• Street brand with minority investment from The Carlyle Group

• First time in top-10 preferred handbag rankings

• CK was No. 8 among upper-income females; No. 10 for avg-income

• GIII is PVH’s licensee for handbags; ~$130-$150M category

• Tommy Hilfiger (~43% of PVH sales) saw strength among males

• First time in top 20 as preferred apparel brand for males

• Jumped to No. 15 preferred apparel brand (No. 10 for males)

• Moved up in top-five handbags among avg-income (3% to 7% Y/Y)

• Moved from No. 8 to No. 6 as preferred handbag (upper-income)

• First time as top-five preferred footwear brand with upper-income

Supreme

BIRKENSTOCK

GUCCI

of 66


Vans Pick Up As Teens Shift Focus From Athletic To Street












UGG 1%

Upper-Income Favorite Footwear Brand (All Teens)

• Vans hits the highest level in our survey history at 12% (achieved once previously in Fall 2013)

• Women’s was driving the most significant piece of this increase (14% vs. 7% last year)

• First time its hit top-ten apparel brands with average-income teens (led by males)

• Listed as a top-ten fashion trend for males & females and an up & coming brand for both

Share gains led

by women’s

of 66


The Biggest Losers

of 66


The Biggest Losers

• RL fell out of top-10 preferred brands (No. 11 UI teens)

• RL moved from No. 4 to No. 8 (avg-income teens)

• UGG now No. 16 preferred brand (upper-income

females) vs. No. 9 last year

• First time out of top-ten in over 10 years of surveys

• Fossil moved from No. 3 at 8% to No. 4 brand at 5%

• Michael Kors (No. 1 licensed brand) from 15% in

Spring to 12% this Fall, reaffirming this brand’s

downtrend in watches (rightsizing of brand underway)

• Nike lost between 600-800 bps Y/Y of share across

apparel & footwear for all teens regardless of how data

was sliced

of 66


Brands Over Boxes…Seeing A Deeper Focus On BrandsA Deeper Look At Top-20 Preferred Apparel Choices (Upper-Income Teens)

Rank Fall 2014 Share Rank Fall 2015 Share Rank Fall 2016 Share Rank Fall 2017 Share


2 American Eagle 8% 2 Forever 21 7% 2 American Eagle 9% 2 American Eagle 11%

3 Forever 21 7% 3 American Eagle 6% 3 Forever 21 5% 3 Adidas 4%

4 Ralph Lauren 6% 4 Ralph Lauren 5% 4 Ralph Lauren 4% 4 Forever 21 4%

5 Hollister 4% 5 Urban Outfitters 3% 5 Urban Outfitters 3% 5 Hollister 4%

6 PacSun 3% 6 PacSun 2% 6 H&M 3% 6 PacSun 3%

7 Victoria's Secret 2% 7 Free People 2% 7 PacSun 2% 7 lululemon 3%

8 Aeropostale 2% 8 H&M 2% 8 Adidas 2% 8 H&M 3%

9 Charlotte Russe 2% 9 Vineyard Vines 2% 9 Vineyard Vines 2% 9 Urban Outfitters 3%

Rue21 2% 10 Nordstrom 2% 10 Victoria's Secret 2% 10 Supreme 2%

11 H&M 2% 11 Hollister 2% 11 Hollister 2% 11 Ralph Lauren 2%

12 Kohl's 2% 12 Abercrombie & Fitch 2% 12 lululemon 2% Vans 2%

13 Abercrombie & Fitch 1% 13 Victoria's Secret 2% 13 Vans 1% 13 Victoria's Secret 2%

14 Hot Topic 1% 14 Kohl's 1% 14 Nordstrom 1% 14 Vineyard Vines 2%

15 Urban Outfitters 1% 15 lululemon 1% 15 Tilly's 1% 15 Gucci 1%

16 T.J. Maxx 1% 16 Target 1% Under Armour 1% 16 Target 1%

17 The Buckle 1% 17 T.J. Maxx 1% Brandy Melville 1% 17 Kohl's 1%

18 JCPenney 1% 18 Adidas 1% 18 Free People 1% 18 Under Armour 1%

19 Levi's 1% 19 Brandy Melville 1% 19 Abercrombie & Fitch 1% 19 Old Navy 1%

20 Vans 1% 20 J.Crew 1% 20 Old Navy 1% T.J. Maxx 1%

of 66


Channel Preferences Still Favor OnlineTime Spent By Channel; Upper-Income Teen

of 66


Amazon Captures Almost 50% Of Teen VoteFavorite Website To Purchase From, Upper-Income Teens


1 Amazon 41% 1 Amazon 40% 1 Amazon 43% 1 Amazon 49%


3 Forever 21 5% 3 American Eagle 4% 3 American Eagle 5% 3 American Eagle 5%

4 eBay 3% 4 eBay 3% 4 Forever 21 3% 4 ebay 3%

5 American Eagle 3% 5 Forever 21 2% 5 eBay 2% 5 Forever 21 3%

Victoria's Secret 3% 6 Urban Outfitters 2% 6 Urban Outfitters 2% 6 Urban Outfitters 2%

7 Urban Outfitters 3% 7 Nordstrom 1% 7 Victoria's Secret 2% 7 Fashion Nova 2%

8 Eastbay 2% 8 Victoria's Secret 1% 8 lululemon 1% 8 lululemon 2%

9 Dick's Sporting Goods 1% 9 Hollister 1% PacSun 1% 9 PacSun 2%

10 PacSun 1% PacSun 1% 10 Zumiez 1% 10 Supreme 1%

>100% Of Softlines

Dollar Growth In

North America

of 66


Fashion Moving Towards Street, Denim & Festival WearTop Fashion Trends Right Now, Upper-Income Males

Top Fashion Trends Right Now, Upper-Income Female


1 Nike/Jordans 20% 1 Nike/Jordans 19% 1 Nike / Jordans 18% 1 Nike / Jordans 12%

2 Jogger Pants 12% 2 Jogger Pants 8% 2 Jogger Pants 8% 2 Supreme 8%

3 Ralph Lauren 6% 3 Vineyard Vines 7% 3 Athletic Wear 6% 3 Jogger Pants 5%

4 Preppy 6% 4 Athletic Wear 6% 4 Khakis / Chinos 5% Ripped Jeans 5%

5 Athletic Wear 5% 5 Khakis/Chinos 6% 5 Adidas 4% 5 Khakis / Chinos 5%

6 Hair / Man Buns 5% 6 Preppy 6% 6 Leggings / lululemon 4% 6 Adidas 4%

Khakis/Chinos 5% 7 Ralph Lauren 4% 7 Ripped Jeans 3% 7 Vineyard Vines 4%

8 Vineyard Vines 4% 8 Tall Socks 4% 8 Preppy 3% 8 Preppy 3%

9 Boat Shoes 3% 9 Boat Shoes 3% 9 Jeans 3% 9 Jeans 3%

10 Tall Socks 2% 10 Adidas 2% 10 Timberland 2% Vans 3%

Athletic Wear 3%


1 Leggings/lululemon 23% 1 Leggings/lululemon 25% 1 Leggings / lululemon 25% 1 Ripped Jeans 12%

2 Victoria's Secret 7% 2 Birkenstock 6% 2 Chokers 11% 2 Off the Shoulder Tops 11%

3 Converse 6% 3 Victoria's Secret 5% 3 Converse 5% 3 Birkenstock 10%

4 Nike / Jordans 6% 4 Converse 4% 4 Victoria's Secret 4% 4 Jeans 9%

5 Boots 3% 5 Ripped Jeans 4% 5 Adidas 4% 5 Leggings / lululemon 8%

6 Crop Tops 3% 6 Jeans 3% 6 Ripped Jeans 4% 6 Converse 4%

7 Athletic Wear 2% 7 Adidas 3% 7 Jeans 3% 7 Crop Tops 3%

8 Jeans 2% 8 Bralettes 3% 8 Boots 3% 8 Chokers 2%

9 Michael Kors 2% 9 Nike / Jordans 3% 9 Nike / Jordans 2% American Eagle 2%

10 Adidas 2% 10 Chokers 3% 10 UGG 2% Vans 2%

of 66


75%

Accessories Spending Intentions Waning All Female Teens

of females do NOT plan to purchase a handbag in next six

months—this is a higher level from 63% in Spring and the

59% multi-year average

$100is what all female teens estimate they spend each year on

handbags/accessories—this is down double-digits

sequentially & Y/Y and is survey trough

Handbags are the second lowest dollar

spend category for females behind fragrance. Even skin

care & cosmetics carry a greater share of wallet

of 66


Handbag Brand PreferencesUpper-Income Females

Average-Income Females


1 Michael Kors 38% 1 Michael Kors 34% 1 Michael Kors 33% 1 Michael Kors 31%

2 Kate Spade 16% 2 Kate Spade 19% 2 Kate Spade 19% 2 Kate Spade 16%

3 Coach 12% 3 Coach 10% 3 Coach 9% 3 Coach 14%

4 Louis Vuitton 4% 4 Louis Vuitton 5% 4 Longchamp 5% 4 Louis Vuitton 6%

5 Gucci 4% 5 Longchamp 3% 5 Louis Vuitton 5% 5 Vera Bradley 6%

6 Chanel 3% Vera Bradley 3% 6 Gucci 4% 6 Gucci 5%

7 Tory Burch 3% 7 Chanel 2% 7 Tory Burch 3% 7 Longchamp 3%

8 Longchamp 2% 8 Gucci 2% 8 Vera Bradley 2% 8 Calvin Klein 2%

9 Vera Bradley 2% 9 Tory Burch 2% 9 Target 2% 9 Chanel 2%

10 Fossil 2% 10 Fossil 1% 10 Chanel 2% 10 Target 1%

Tory Burch 1%



2 Coach 12% 2 Coach 13% 2 Coach 14% 2 Coach 13%

3 Kate Spade 8% 3 Kate Spade 10% 3 Kate Spade 12% 3 Kate Spade 12%

4 Vera Bradley 4% 4 Vera Bradley 5% 4 Vera Bradley 4% 4 Gucci 7%

5 Louis Vuitton 3% 5 Gucci 3% 5 Louis Vuitton 3% 5 Vera Bradley 5%

6 Fossil 2% 6 Louis Vuitton 3% 6 Gucci 3% 6 Louis Vuitton 4%

7 Gucci 2% 7 Chanel 2% 7 Target 2% 7 Chanel 2%

8 Chanel 2% 8 Fossil 1% 8 Tory Burch 2% 8 Guess 2%

9 Tory Burch 1% Target 1% 9 Chanel 2% 9 Longchamp 1%

10 Steve Madden 1% 10 Betsey Johnson 1% 10 Guess 1% 10 Calvin Klein 1%

Guess 1%

of 66


Watch Brands Upper-Income Teens


1 Rolex 29% 1 Rolex 37% 1 Rolex 37% 1 Rolex 44%


3 Fossil 8% 3 Apple 5% 3 Fossil 8% 3 Apple 7%

4 Casio 6% Casio 5% 4 Apple 6% 4 Fossil 5%

5 Apple 5% 5 Fossil 5% 5 Casio 4% 5 Nixon 4%

6 Nixon 3% 6 Nixon 3% 6 Nixon 2% 6 Casio 3%

7 Nike 3% 7 Nike 2% 7 Gucci 2% 7 Fitbit 2%

8 Invicta 1% 8 Timex 2% 8 Nike 2% 8 Garmin 1%

9 Kate Spade 1% 9 Fitbit 1% 9 Citizen 2% Timex 1%

10 Citizen 1% 10 Gucci 1% 10 Garmin 1% 10 Nike 1%

Gucci 1% Kate Spade 1%

MVMT 1%

72%of teens do NOT plan to purchase a watch in next six

months—this is higher than the Spring level and multi-year

average, both 71%.

of females intend to purchase a smartwatch in the next

six months, above the Spring level and multi-year

average, both 10%.16%

of 66

RestaurantsFood


of 66


FOOD VS. CLOTHING SPEND AMONG UPPER INCOME TEENS

Restaurant Spending Trends

• Restaurants have steadily grown in importance within the broader teen wallet.

• During the most recent survey, restaurants represented 22% of overall spending for upper income

teens. This result was within the context of the longer-term trend of food spend outpacing clothing

spend but was down sequentially vs. Spring 2017’s all-time high level of 24%.

• Restaurant spending continues to outpace spending on clothing.

of 66


PREFERENCE FOR LIMITED SERVICE BRANDS

Restaurant Spending Trends

• Teens are showing a continued preference for limited service restaurants relative to full service

brands.

• This is the continuation of a longer-term trend we have observed going back to Spring 2009, at

least, when teen brand preferences were primarily focused around full service brands. We believe

this fueled by Fast Casual preference coupled with affordability considerations.

43% 44%41%

48% 50% 52% 54% 54%57%

60% 59%62% 61% 62% 60%

64% 64% 63%

57% 56%59%

52% 50% 48%46% 46%

43%40% 41%

38% 39% 38% 40%36% 36% 37%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Spring Fall Spring Fall Spring Fall Spring Fall Spring Fall Spring Fall Spring Fall Spring Fall Spring Fall

2009 2010 2011 2012 2013 2014 2015 2016 2017

Full-Service

Limited-Service

of 66


Restaurant Spending TrendsPREFERRED BRANDS (UPPER INCOME)

PREFERRED BRANDS (AVERAGE INCOME)

1 2 3 4 5

Fall Starbucks Chick-fil-A Chipotle McDonald's Dunkin Donuts

Spring Chick-fil-A Starbucks Chipotle Buffalo Wild Wings Panera

Fall Starbucks Chipotle Chick-fil-A Taco Bell McDonald's

Spring Starbucks Chipotle Chick-fil-A Panera McDonald's

Fall Starbucks Chipotle Chick-fil-A McDonald's Panera

Spring Chipotle Starbucks Chick-fil-A Panera Olive Garden

Fall Starbucks Chipotle Chick-fil-A McDonald's Dunkin Donuts

Spring Starbucks Chipotle Chick-fil-A McDonald's Panera

Fall Starbucks Chipotle McDonald's Chick-fil-A Panera

Spring Starbucks Chipotle Panera Chick-fil-A McDonald's

Fall Starbucks Chipotle McDonald's Olive Garden Chick-fil-A

Spring Starbucks Chipotle McDonald's Olive Garden Chick-fil-A

Fall Starbucks Chipotle McDonald's Olive Garden Dunkin Donuts

Spring Starbucks Chipotle McDonald's Olive Garden Chick-fil-A

Fall Chipotle Starbucks McDonald's Olive Garden Chili's

Spring Starbucks Chipotle Olive Garden T.G.I. Friday's Chili's

2017 Fall Starbucks Chick-fil-A Chipotle McDonald's Dunkin Donuts

$5.38 ~$6.00 $10.66 $6.04 $4.78

2017

Estimated Average Check By

Preferred Brand

2011

2010

2016

2015

2014

2013

2012

1 2 3 4 5

Fall Starbucks Chick-fil-A McDonald's Olive Garden Buffalo Wild Wings

Spring Starbucks Chick-fil-A McDonald's Chipotle Buffalo Wild Wings

Fall Starbucks Chick-fil-A McDonald's Olive Garden Chipotle

Spring Starbucks McDonald's Chick-fil-A Olive Garden Buffalo Wild Wings

Fall Starbucks McDonald's Chipotle Chick-fil-A Olive Garden

Spring Starbucks McDonald's Chipotle Chick-fil-A Olive Garden

Fall Starbucks McDonald's Chipotle Chick-fil-A Taco Bell

Spring Starbucks McDonald's Chipotle Olive Garden Taco Bell

Fall Starbucks McDonald's Olive Garden Taco Bell Chipotle

Spring Starbucks McDonald's Olive Garden Taco Bell Buffalo Wild Wings

Fall Starbucks McDonald's Olive Garden Red Lobster Taco Bell

Spring Starbucks McDonald's Olive Garden Taco Bell Red Lobster

Fall Starbucks McDonald's Olive Garden Taco Bell Applebee's

Spring Starbucks McDonald's Olive Garden Taco Bell Applebee's

Fall McDonalds Starbucks Olive Garden Taco Bell Apple Bee's

Spring Starbucks Olive Garden McDonald's Applebee's Chili's

2017 Fall Starbucks Chick-fil-A McDonald's Olive Garden Buffalo Wild Wings

$5.38 ~$6.00 $6.04 $17.50 $18.14

2017

2010

2016

2015

2014

2013

2012

2011

Estimated Average Check By

Preferred Brand

of 66

Media & DevicesMusic, Video Games, Mobile & Entertainment


of 66


Snap & IG Winning vs. FB & Twitter

• Snapchat and Instagram remain top platforms, while FB and Twitter are seeing engagement

declines as the youngest teens don’t adopt these platforms.

• Instagram and Snapchat have extremely high user overlap, but Instagram is a better

channel for branding, has better ad units, and stronger advertiser engagement.Which social platform do you use at least once per month?

Spring 2015 Fall 2015 Spring 2016 Fall 2016 Spring 2017 Fall 2017

Snapchat 68% 74% 75% 80% 81% 82%

Instagram 73% 76% 74% 79% 79% 81%

Twitter 57% 58% 58% 56% 56% 50%

Facebook 47% 56% 60% 52% 51% 45%

Pinterest 25% 25% 27% 25% 25% 23%

Google+ 14% 24% 23% 22% 19% 16%

What is your favorite social platform?

Spring 2015 Fall 2015 Spring 2016 Fall 2016 Spring 2017 Fall 2017

Snapchat 11% 17% 24% 35% 39% 47%

Instagram 29% 29% 23% 24% 23% 24%

Twitter 21% 18% 16% 13% 11% 7%

Facebook 12% 13% 15% 13% 11% 9%

Pinterest 2% 1% 1% 1% 1% 1%

Google+ 1% 1% 1% 1% 0% 0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

14 15 16 17 18

% u

sin

g P

latf

orm

Age

Strong, Early Adoption of Snapchat & Instagram

Facebook Twitter Snapchat Instagram

of 66


FB: Losing Engagement; Cohorts Stable

• Facebook showed a step down in aggregate teens indicating they use the platform.

• Decline appears to be driven by younger teens entering our sample at a lower rate of initial

adoption.

• Our longitudinal data suggests this isn’t an issue of churn.

• While declining engagement is an investor concern, it is unlikely to be a meaningful

headwind for several years as teens are a HSD % of MAUs.

0%

10%

20%

30%

40%

50%

60%

70%

Spring-15 Fall-15 Spring-16 Fall-16 Spring-17 Fall-17

Longitudinal Data Suggests Cohorts Not Deteriorating14 & 15 Year Olds as of Spring 2015, Followed Through to Graduation

14 Year Olds

15 Year Olds

0%

10%

20%

30%

40%

50%

60%

70%

80%

14 15 16 17 18 Total

% u

sin

g P

latf

orm

Age

Declining Engagement at Facebook

Spring-16 Fall-16 Spring-17 Fall-17

of 66


IG: Strength Continues, Best Brand

Channel• Instagram showed a step-up in engagement and is neck-and-neck with Snapchat.

• We asked teens the best channel to reach them: Instagram is the clear winner.

• We believe this reflects Instagram’s use case, which is much more brand-friendly.

• Instagram has largely the same user base as Snapchat, but a better ad unit and advertiser

engagement.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

14 15 16 17 18 Total

% u

sin

g P

latf

orm

Age

Instagram Momentum ContinuesSpring-16 Fall-16 Spring-17 Fall-17

0%

10%

20%

30%

40%

50%

60%

70%

Instagram is the Best Channel to Reach Teens% indicating channel as a best way to communicate new products/promotions

of 66


Snapchat: Maintains Engagement

• Snapchat remains the No. 1 platform among teens (~100bps ahead of Instagram).

• Efforts at Instagram and Facebook to move more into ephemeral photo/video messaging

and video has not impacted engagement.

• Snap pitches itself as having unique access to a hard-to-reach demographic, but our survey

suggests its user base is nearly identical to Instagram.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

14 15 16 17 18 Total

% u

sin

g P

latf

orm

Age

Snapchat Remains DominantSpring-16 Fall-16 Spring-17 Fall-17

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Snapchat Instagram

Snapchat & Instagram Share Vast Majority of UsersUnique Users Cross-Platform Users

of 66


• Amazon mindshare gains continue, driven by female and male respondents.

• eBay mindshare ticked up 90bps, a positive data point worth monitoring.

• Concentration of mindshare remains high, with 76% of preferred website responses

(unaided) among the top 10 platforms.

• Walmart has 0.18% of mindshare, Target has 0.44%; limited threat.

PREFERRED WEBSITES (UPPER-INCOME)

Amazon Mindshare Gains Continue

PREFERRED WEBSITES BY GENDER (UPPER-INCOME)Females




3 Victoria's Secret 6% 3 Forever 21 6% 3 Forever 21 7% 3 Forever 21 7%

4 American Eagle 5% 4 Urban Outfitters 5% 4 Urban Outfitters 5% 4 Fashion Nova 5%

5 Urban Outfitters 5% 5 Victoria's Secret 3% 5 Victoria's Secret 5% 5 lululemon 4%

6 Nike 2% 6 Nordstrom 3% 6 Lululemon 3% 6 Urban Outfitters 4%

Sephora 2% 7 Brandy Melville 3% 7 Fashion Nova 2% 7 Nordstrom 2%

8 Hollister 2% 8 Hollister 2% 8 Hollister 2% 8 Hollister 2%

lululemon 2% 9 Etsy 2% Nordstrom 2% Nike 2%

10 PacSun 2% 10 Free People 2% 10 Tobi 2% PacSun 2%

Males




3 eBay 5% 3 eBay 5% 3 eBay 3% 3 ebay 5%

4 Eastbay 3% 4 Vineyard Vines 1% 4 PacSun 2% 4 Supreme 2%

5 Dick's Sporting Goods 2% 5 Zumiez 1% Zumiez 2% 5 PacSun 2%

6 Foot Locker 2% 6 Eastbay 1% 6 adidas 1% 6 adidas 2%

7 Zumiez 2% 7 adidas 1% Foot Locker 1% 7 Eastbay 1%

8 Supreme 1% PacSun 1% 8 Eastbay 1% Zumiez 1%

9 Ralph Lauren 1% 9 Foot Locker 1% H&M 1% 9 Dick's Sporting Goods 1%

10 Three Sites Tied 1% 10 Ralph Lauren 1% 10 Aliexpress 1% H&M 1%





4 eBay 3% 4 eBay 3% 4 Forever 21 3% 4 ebay 3%

5 American Eagle 3% 5 Forever 21 2% 5 eBay 2% 5 Forever 21 3%

Victoria's Secret 3% 6 Urban Outfitters 2% 6 Urban Outfitters 2% 6 Urban Outfitters 2%

7 Urban Outfitters 3% 7 Nordstrom 1% 7 Victoria's Secret 2% 7 Fashion Nova 2%

8 Eastbay 2% 8 Victoria's Secret 1% 8 lululemon 1% 8 lululemon 2%

9 Dick's Sporting Goods 1% 9 Hollister 1% PacSun 1% 9 PacSun 2%

10 PacSun 1% PacSun 1% 10 Zumiez 1% 10 Supreme 1%

of 66


• Prime Adoption is at 66% vs. 60% in Spring 2017. Adoption increased in each income

bracket except top income earners (may be a statistical fluke).

• Our survey suggests high-60M to low-70M households have Prime memberships in the

U.S.; while a staggering number, our non-teen surveys and Amazon filings suggest similar

levels.

• 46% of new Prime members are coming from the top 2 quintiles of household income.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

$21K-$41K $41K-$68K $68K-$112K $112K+

Amazon Prime Penetration by Household IncomeFall 2014

Spring 2015

Fall 2015

Spring 2016

Fall 2016

Spring 2017

Fall 2017

M

10M

20M

30M

40M

50M

60M

70M

80M

Spring2013

Fall2013

Spring2014

Fall2014

Spring2015

Fall2015

Spring2016

Fall2016

Spring2017

Fall2017

Prime Members by Income Quintile

$112K+

$68K-$112K

$41K-$68K

$21K-$41K

$0K-$21K

Profile of Prime Growth

of 66


Teen iPhone Ownership Up Nicely

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

iPhone Ownership

Own an iPhone

Expect Next Phone To BeiPhone

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Apple Watch Intention

Own A Smartwatch

Plan to buy Apple Watch

iPhone ownership of 78% is highest we’ve seen with upside remaining as 82% of teens say next phone will be an iPhone.

Apple Watch interest is up significantly with 17% planning to buy an Apple Watch in the next 6 months vs. 13% in Spring 2017.

of 66


DO YOU ALREADY OWN OR EXPECT YOUR HOUSEHOLD TO BUY THE PS4 OR XBOX ONE IN THE NEXT TWO YEARS?

Console Video Game Takeaways

52%49%

65%

41%

33% 34%

26%22%

17% 17%

26%37%

39%52%

54%58%

62%

Spring 2013 Fall 2013 Spring 2014 Fall 2014 Spring 2015 Fall 2015 Spring 2016 Fall 2016 Spring 2017 Fall 2017

Sales of Current Gen Consoles Outpacing Prior Cycle*

Anticipate purchase Already own one

PS4 and Xbox One Launched Nov. 2013

79% of respondents anticipate buying a current gen console or already own one, compared to 75% in Spring-2017. New console ownership is up to

62% vs. 58% in spring.

Percentage of teens who anticipate downloading >50% of games onto console is now 50%, up from 45% in spring and 37% in Fall-15, when we first

asked the question.

of 66


HOW MUCH ARE TEENS SPENDING ANNUALLY ON VIDEO GAMES?• Expected spend by male teens on video games (as % of total budget) is 11% for Fall 2017, while total expected spend (male & female) is down 8% to $183.

• Only food (22%) and clothing (17%) exceed male teen spending on video games (11%).

• Average video game spend by teens over the past 15 years is $159.

Console Video Game Takeaways

0%

2%

4%

6%

8%

10%

12%

14%

$0

$50

$100

$150

$200

$250

Spri

ng

201

1

Fall

20

11

Spri

ng

201

2

Fall

20

12

Spri

ng

201

3

Fall

20

13

Spri

ng

201

4

Fall

20

14

Spri

ng

201

5

Fall

201

5

Spri

ng

201

6

Fall

20

16

Spri

ng

201

7

Fall

20

17

Video Game Spend (Male+Female) Video Game Spend Allocation (Male)

$183 - Expected Video Game Spend in 2017

11% - Budget Spent On Video Games in 2017

of 66


DO YOU PLAY GAMES ON YOUR MOBILE PHONE OR TABLET?

72% play games on smartphone or tablet, compared with 73% in the spring.

Teen Mobile Game Trends

WHEN PLAYING GAMES ON YOUR MOBILE DEVICE, DO YOU BUY VIRTUAL

GOODS LIKE ENERGY, COINS OR EXTRA LEVELS?

28% of teens who play mobile games spend money in game (flat from spring), still an all-time high for our survey.

% of

Students

Fall 2013

% of

Students

Spring 2014

% of

Students

Fall 2014

% of

Students

Spring

2015

% of

Students

Fall 2015

% of

Students

Spring

2016

% of

Students

Fall 2016

% of

Students

Spring

2017

% of

Students

Fall 2017

Yes 81% 85% 80% 81% 79% 81% 77% 73% 72%

No 19% 15% 20% 19% 21% 19% 23% 27% 28%

% of

Students

Fall 2013

% of

Students

Spring 2014

% of

Students

Fall 2014

% of

Students

Spring

2015

% of

Students

Fall 2015

% of

Students

Spring

2016

% of

Students

Fall 2016

% of

Students

Spring

2017

% of

Students

Fall 2017

Yes 18% 18% 22% 21% 24% 26% 24% 28% 28%

No 82% 82% 78% 79% 76% 74% 76% 72% 72%

of 66


Video and Music Trends

Digital platforms continue to take share: YouTube consumption saw a nice uptick to 29% from 26% in our Spring survey.

Netflix took a small dip to 37% from 38%, while linear TV continued its decline to 22% from 25% a year ago.

TEEN MUSIC CONSUMPTION

On-demand music services like Spotify, YouTube, and Apple Music (30%, 20%, and 17%) continue to gain market share

among teens, as more traditional platforms and Pandora continue to lose share.

TEEN VIDEO CONSUMPTION

of 66


Cinema Trends

Theatres remain the preferred way for teens to see a film. 58% of teens saw in-theatre as their preferred method to watch a

movie, up from 55% in our Spring survey.

Premium features like large format screens (IMAX 13%) and recliners (26%) are resonating with teens as these upgrades

enhance the experience beyond what is possible in-home.

We found teens had limited interest in a $30/30 day PVOD window, with 82% indicating they would not rent.

of 66


Analyst: Erinn Murphy

ADS-GR (+): UPWARD MARCH CONTINUES; SHARE GAINS FAR FROM OVER, IN OUR VIEW

Mounting evidence brand momentum is not being driven by legacy Originals (Superstar & Stan Smith). Sequential improvement or stability

from Spring 2017 in every income group/category, with material improvement in most. Particularly strong among males with 400-600 bps

mindshare sequential improvement in footwear.

VFC (+/=): ROBUST VANS MOMENTUM (20% OF SALES) & GENERAL STABILITY FOR THE NORTH FACE (20% OF SALES)

Vans is finding traction in apparel, while footwear mindshare is increasing rapidly among females – doubled Y/Y to 14% among the upper-

income group. Upward Patagonia momentum & downward trends for The North Face of late appear to have plateaued.

NKE (-): MINDSHARE MODERATION ONGOING & WE EXPECT FUNDAMENTAL DETERIORATION TO OUTPACE

Teens continue to show a strong affinity for wearing athletic brands in our survey, with aggregate footwear mindshare higher from Spring

2017 and aggregate apparel mindshare lower. Nike is by far the largest donator, with brands like adidas, Puma, New Balance, and Vans all

net beneficiaries.

UAA (-): ADIDAS’ RESURGENCE APPEARS TO BE CROWDING OUT UNDER ARMOUR; LOWERING ESTIMATES

Despite significant SKU expansion and reported category growth, male footwear mindshare has remained ~1% across both income

groups in our past five surveys. Apparel rank has consistently declined among average-income males over the last four surveys.

SHOO (=/-): REMAIN POSITIVE LONG TERM, BUT KEY VICTIM OF ATHLETIC & BIRKENSTOCK STRENGTH SAW DECLINES

Mindshare fell 300 bps from Spring 2017 and hit an all-time low among upper-income females. We note Birkenstock improved by the same

magnitude sequentially, while aggregate share for Nike, adidas, Vans, and Converse improved from Spring 2017.

DECK (-): UGG (84% OF SALES) HIT NEW RECORD LOW IN SURVEY AS BRAND TRANSITIONS FROM TOP-OF-MIND STATUS

While we believe the brand has become more staple like (& thus less top of mind for teens), it reached a record low and did not register in

the top ten among either female income group.

HANDBAGS (=): REMAIN NEUTRAL ON COH & KORS; CATEGORY SPENDING INTENTIONS CONTINUE TO DECLINE

Stock Highlights: Global Fashion and Lifestyle Brands

of 66


Analyst: Nicole Miller Regan

Stock Highlights: Restaurants

SBUX (+): MOST PREFERRED BRAND AMONG TEENS

Starbucks notably maintained its position as the most preferred brand overall (11% preference for upper & 12% preference for average

income teens vs. 12% & 12%, respectively, during Spring 2017) and within the coffee category where it remains the overwhelmingly

favorite brand with 68%+ share. However, these trends are more muted relative to historical peak levels of 18% preference for upper

income teens (in both Fall 2013 & Spring 2007 cycles), 16% share (Spring 2008), and 15% share (Fall 2014, Spring 2009, & Fall

2007)... reflecting what has been an approximate 100 bps loss for each of the past few survey cycles sequentially.

We remain confident in our long-term thesis based around proven global brand equity and an accelerating asset-light growth model –

both of which generate strong cash flow in support of continued reinvestment into the business and an ongoing commitment to capital

allocation.

CMG (=/+): SURVEY SUGGESTS EVIDENCE OF MODEST BRAND IMPROVEMENT

Exiting this season's survey Chipotle remained the third most preferred public brand among upper income teens (8% mindshare was flat

sequentially vs. Spring 2017) and moved down to the fifth most preferred brand among average income teens. Among average income

teens Chipotle's rank (to #4 from #3) and mindshare (to 4% from 5%) slipped a position vs. Spring 2017. At the cuisine level, the

company remained the overwhelmingly most-preferred upper income teen brand within the Hispanic cuisine category at 53%

mindshare, but ceded its top spot among average income teens to Taco Bell.

We reiterate our bullish outlook on Chipotle shares grounded by when (not if) improvement occurs, the company has the ability to

leverage strong unit-level economics, a healthy long-term unit growth pipeline, and its human capital investments.

MCD (+): SURVEY RESULTS HIGHLIGHT ONGOING COMPETITIVE INTRUSION AMONG AVERAGE INCOME TEENS

McDonald’s showed steady mind share levels among upper (Number 4 brand) and average income teens (Number 3 brand) in the latest

survey cycle. Similar to prior survey cycles, we continue to observe strong competition from non-burger names (such as Chick-fil-A).

From a cuisine perspective, McDonald’s remains the most preferred hamburger brand across both sets of teens and continues to regain

mind share percentage. That said, we believe culture change, culinary/marketing vision and technology initiatives leave McDonald's

solidly positioned as the company leverages its core global brand through EOTF efforts.

of 66


Analyst: Sam Kemp

FB (+): FACEBOOK ENGAGEMENT DECLINES, BUT INSTAGRAM REMAINS A KEY CATALYST

Teens showed declining engagement with Facebook, with the percent of teens indicating they have used Facebook in the past month declining from 51% in the Spring to 45% in our Fall 2017 survey; teens naming it as a top 3 social network remained consistent at 33%. This was counterbalanced by rising engagement with Instagram, with the percent of teens indicating they used Instagram in the past month increasing from 79% to 81%, while the percent indicating Instagram as a top 3 platform increased from 75% to 81%.

While the declining engagement among teens at Facebook is a negative, in context with the broader core Facebook story we note itshould have little impact for several years. We are not observing any cohort degradation – that is, for example, current 18 year olds who adopted Facebook when they were 13 are not abandoning Facebook; rather, teens just entering our sample are showing signs of lower initial adoption of Facebook. Therefore, the fundamental risk is not that older users abandon the platform, but that future growth from teens is lessening. We estimate teens account for a HSD percent of Facebook users, making this a limited headwind to revenue growth for core Facebook for several years.

We are encouraged by Instagram’s consistent strong showing and rising engagement, reflecting a strong defensive positive vs. Snapchat’s presence as teens’ favorite platform (though by a shrinking margin). All else equal, we would rather see teens engaged with Instagram as the long term branding potential within Instagram appears to be stronger than core Facebook; 58% of those surveyed indicated they believe Instagram is a good channel for brands/retailers to reach them, 2.5x higher than Facebook at 22%.

We are remaining Overweight on FB given our outlook for a tripling of revenue between 2016 and 2021, driven primarily by Instagram, core Facebook, and early revenue from the messaging platforms (WhatsApp and Messenger).

SNAP (=): SNAPCHAT MAINTAINS ENGAGEMENT, BUT REMAIN CAUTIOUS ON A LACK OF MOAT

Snapchat remains the king of teens’ social lives, with 82% indicating use in the past month (vs. 81% in Spring 2017) and 82% naming it as a top three social platform (vs. 79%). Teens are clearly engaged with Snapchat’s unique approach to social (narrow network, direct messaging), and we believe this provides near-term support to Snapchat daily active user (DAU) growth in Q3’17. We are remainingNeutral on SNAP as Snapchat’s user base has 92% crossover with Instagram’s user base, making it susceptible to Instagram’s expansion of its use case to encompass messaging and stories (two uses we see expanding in our recent survey work) and creating headwinds to monetization as advertisers have less reason to spend behind Snapchat vs. Instagram.

Stock Highlights: Internet

of 66


Analyst: Mike Olson

AMZN (+): SURVEY SHOWS INCREASED MINDSHARE & INCREASING PRIME ADOPTION

Amazon gained 900bps of teen mindshare y/y at 49% (most preferred shopping website). Prime adoption continues to be

strong; survey implies high-60M to low-70M U.S. households have Prime.

EBAY (=/+): SLIGHT IMPROVEMENT IN EBAY MINDSHARE AMONG TEENS

eBay mindshare rebounded modestly to 3.3% from 2.4% from our Spring-17 survey, which is a trend to watch as the company

works to surmount the challenges in shifting brand perception for an entrenched online offering, such as this. We remain

Neutral as EBAY’s current valuation (12x ’18E EBITDA) fairly represents the company’s growth opportunity, in our view.

AAPL (+): TEENS CONTINUE TO INCREASE IPHONE OWNERSHIP

Apple continued to grow smartphone share among teens with 78% of teens owning an iPhone vs 76% in Spring-17. This is

further bolstered by 82% of respondents expecting their next phone to be an iPhone, up slightly from 81% in the spring. We

view the survey as a positive data point on iPhone 8 and X demand and increasing interest in the Apple Watch.

Netflix (+): Leading the Pack in Video Consumption

Teens spend 37% of their time watching video on Netflix, the next closest is YouTube at 29% and pay TV at 22%.

ATVI(+), EA(+), TTWO(+): TEEN VIDEO GAME BUDGET ALLOCATION DOWN SLIGHTLY, INCREASING ACCEPTANCE

OF FULL GAME DOWNLOADS

We saw a slight downtick in % of teen budgets allocated to video games, but not a material change. We also note that the

proportion of respondents who digitally download >50% of titles on consoles has increased to 50% from 45% in Spring-17.

ZNGA (=/+): SURVEY POINTS TO DECLINES IN MOBILE GAME INTEREST, BUT INCREASED WILLINGNESS TO SPEND

Mobile gaming interest declined for the third consecutive survey. However, willingness to spend in-game remained at an all-

time high. Declining DAUs and improving ARPU has been a trend evident with several of the major mobile developers recently.

Stock Highlights: Consumer Technology & eCommerce

of 66


Analyst: Stan Meyers

LGF (+): LIONSGATE WELL-POSITIONED AMID CONTINUED VIDEO CONSUMPTION FRAGMENTATION

• Viewership among teens continues to fragment creating more demand for content across traditional and emerging

platforms.

• Netflix (37%) and YouTube (28%) continue to dominate teens’ video consumption as Cable TV continues to lose share

(22%).

• These trends bode well for Lionsgate, which produces high quality long-form content across all platforms.

P (-): TEENS CONTINUE TO PIVOT AWAY FROM PANDORA AND INTO ON-DEMAND MUSIC SERVICES

• Pandora continues to lose teen mindshare as the go-to music platform, as they shift to on-demand platforms such as

Spotify and Apple Music. Just 35% of teens surveyed are listening to music on Pandora, down from 49% in 2H16.

• Teens spent just 8% of their time listening to Pandora, down from 14% in the spring. Other on-demand services like

Spotify and apple music are commanding 30% and 17% respectively.

• We believe Pandora’s market share decline among teens is largely priced into the shares, as the focus shifts to

monetization of its current 75M listener base.

AMC, CNK, RGC, IMAX (+): TEENS STILL PREFER GOING TO THE MOVIES OVER STAYING HOME

Our survey results continue to indicate that, among teens, theatres remain the preferred way to see a film. 58% of

teens now prefer in-theatre when watching a movie, up from 55% in 1H17 survey.

2H17 survey shows teen VOD demand dropping to 7% from 9% in 1H17, as subscription streaming rises in popularity.

Teens are unlikely to rent a film for $30 through the potential new PVOD window. 82% of respondents indicated no

interest.

Stock Highlights: Media and Entertainment

of 66


SPEAKER COVERAGE

Erinn Murphy Global Fashion & Lifestyle Brands

Nicole Miller Regan Restaurants

Sam Kemp Internet

Michael Olson Consumer Technology & eCommerce

Stan Meyers Media & Entertainment

Questions & Answers

of 66

Appendix

of 66


Project Framework & Key Demographics

ALL TEENS

Spring

2014

Fall 2014 Spring

2015

Fall 2015 Spring

2016

Fall 2016 Spring

2017

Fall 2017

Teens Surveyed 7,500 7,200 6,200 9,400 6,500 10,000 5,500 6,100

Gender - Female 47% 47% 49% 44% 44% 45% 45% 46%

Gender - Male 53% 53% 51% 56% 56% 55% 55% 54%

Average Age 16.4 16.0 16.3 16.0 16.5 16.0 16.4 15.9

Percentage Of Teens Part-Time Employed 33% 35% 35% 36% 39% 34% 39% 35%

Average Household Income $63,000 $73,000 $67,000 $68,000 $62,500 $68,800 $66,100 $66,100

UPPER-INCOME TEEN SURVEY

Spring

2014

Fall 2014 Spring

2015

Fall 2015 Spring

2016

Fall 2016 Spring

2017

Fall 2017

Teens Surveyed - Upper Income 1,300 2,200 1,400 2,700 1,300 2,800 1,400 1,500

Gender - Female 43% 46% 46% 41% 46% 41% 42% 43%

Gender - Male 57% 54% 54% 59% 54% 59% 58% 57%

Average Age 16.2 16.1 16.2 15.9 16.5 15.8 16.4 15.9


AVERAGE-INCOME TEEN SURVEY

Spring

2014

Fall 2014 Spring

2015

Fall 2015 Spring

2016

Fall 2016 Spring

2017

Fall 2017

Teens Surveyed - Average Income 6,200 5,000 4,800 6,700 5,200 7,200 4,100 4,600

Gender - Female 48% 48% 49% 45% 44% 46% 46% 47%

Gender - Male 52% 52% 51% 55% 56% 54% 54% 53%

Average Age 16.4 16.0 16.4 16.1 16.4 16.0 16.4 15.9


Average Household Income $55,000 $56,000 $56,000 $52,000 $53,000 $53,000 $55,000 $55,000

of 66


Basic Needs24%

Selfie Budget31%

Social Budget

44%

41%

38%

All Upper-Income Teens

What Is In A Teen’s Wallet Today?

21%

Selfie Budget Clothing, Accessories,

Personal Care, &

Shoes

Basic Needs Electronics, Cars,

& Other

Social Budget Food, Video Games,

Music, Movies, Events,

& Books

Female

Male

Basic Needs17%

Selfie Budget47%

Social Budget

36%

of 66


Spending by Category by Income Demographic

SPENDING BY CATEGORY (UPPER-INCOME, ALL TEENS)

SPENDING BY CATEGORY (AVERAGE-INCOME, ALL TEENS)

Spending by Category - All Teens Spring 2014 Fall 2014 Spring 2015 Fall 2015 Spring 2016 Fall 2016 Spring 2017 Fall 2017

Video games / systems 7% 7% 7% 7% 8% 8% 8% 8%

Music / movies (DVD/CD) 7% 6% 6% 6% 6% 5% 5% 5%

Electronics / gadgets 8% 8% 8% 8% 8% 8% 7% 7%

Clothing 21% 20% 20% 20% 18% 20% 19% 20%

Accessories/personal care/cosmetics 11% 10% 11% 10% 11% 11% 10% 10%

Shoes 10% 9% 9% 10% 9% 10% 9% 10%

Food 18% 17% 21% 19% 20% 21% 22% 20%

Concerts/Movies/Sporting events 5% 5% 5% 5% 5% 5% 4% 5%

Car 9% 9% 8% 9% 9% 8% 9% 8%

Books/magazines 2% 2% 2% 2% 2% 2% 2% 1%

Furniture / room accessories 2% 2% 2% 2% 2% 2% 2% 2%

Other 3% 3% 3% 4% 4% 4% 4% 4%

Total Fashion (Clothing, Access & Footwear) 41% 40% 40% 39% 38% 40% 39% 40%

Spending by Category - All Teens Spring 2014 Fall 2014 Spring 2015 Fall 2015 Spring 2016 Fall 2016 Spring 2017 Fall 2017

Video Games / Systems 7% 7% 8% 7% 7% 7% 8% 7%

Music / Movies (DVD/CD) 6% 6% 6% 6% 5% 5% 5% 5%

Electronics / Gadgets 8% 8% 8% 8% 8% 8% 7% 8%

Clothing 21% 21% 20% 20% 20% 21% 19% 20%

Accessories / Personal Care / Cosmetics 9% 10% 10% 9% 10% 9% 9% 9%

Shoes 9% 8% 7% 9% 8% 8% 8% 8%

Food 21% 20% 23% 22% 22% 23% 24% 22%

Concerts / Movies / Sporting Events 6% 6% 6% 6% 5% 6% 6% 5%

Car 9% 9% 8% 7% 9% 6% 9% 9%

Books / Magazines 2% 2% 2% 2% 2% 1% 1% 1%

Furniture / Room Accessories 1% 2% 1% 1% 1% 2% 2% 2%

Other 3% 3% 4% 3% 3% 4% 4% 4%

Total Fashion (Clothing, Access & Footwear) 38% 39% 36% 38% 38% 38% 36% 38%

of 66


Top Fashion Trends Right Now

TOP FASHION TRENDS RIGHT NOW (UPPER-INCOME, MALES)

TOP FASHION TRENDS RIGHT NOW (UPPER-INCOME, FEMALES)


1 Leggings/lululemon 23% 1 Leggings/lululemon 25% 1 Leggings / lululemon 25% 1 Ripped Jeans 12%

2 Victoria's Secret 7% 2 Birkenstock 6% 2 Chokers 11% 2 Off the Shoulder Tops 11%

3 Converse 6% 3 Victoria's Secret 5% 3 Converse 5% 3 Birkenstock 10%

4 Nike / Jordans 6% 4 Converse 4% 4 Victoria's Secret 4% 4 Jeans 9%

5 Boots 3% 5 Ripped Jeans 4% 5 Adidas 4% 5 Leggings / lululemon 8%

6 Crop Tops 3% 6 Jeans 3% 6 Ripped Jeans 4% 6 Converse 4%

7 Athletic Wear 2% 7 Adidas 3% 7 Jeans 3% 7 Crop Tops 3%

8 Jeans 2% 8 Bralettes 3% 8 Boots 3% 8 Chokers 2%

9 Michael Kors 2% 9 Nike / Jordans 3% 9 Nike / Jordans 2% American Eagle 2%

10 Adidas 2% 10 Chokers 3% 10 UGG 2% Vans 2%


1 Nike/Jordans 20% 1 Nike/Jordans 19% 1 Nike / Jordans 18% 1 Nike / Jordans 12%

2 Jogger Pants 12% 2 Jogger Pants 8% 2 Jogger Pants 8% 2 Supreme 8%

3 Ralph Lauren 6% 3 Vineyard Vines 7% 3 Athletic Wear 6% 3 Jogger Pants 5%

4 Preppy 6% 4 Athletic Wear 6% 4 Khakis / Chinos 5% Ripped Jeans 5%

5 Athletic Wear 5% 5 Khakis/Chinos 6% 5 Adidas 4% 5 Khakis / Chinos 5%

6 Hair / Man Buns 5% 6 Preppy 6% 6 Leggings / lululemon 4% 6 Adidas 4%

Khakis/Chinos 5% 7 Ralph Lauren 4% 7 Ripped Jeans 3% 7 Vineyard Vines 4%

8 Vineyard Vines 4% 8 Tall Socks 4% 8 Preppy 3% 8 Preppy 3%

9 Boat Shoes 3% 9 Boat Shoes 3% 9 Jeans 3% 9 Jeans 3%

10 Tall Socks 2% 10 Adidas 2% 10 Timberland 2% Vans 3%

Athletic Wear 3%

of 66


Uptrending Brands

BRANDS STARTING TO WEAR (UPPER-INCOME, MALES)

BRANDS STARTING TO WEAR (UPPER-INCOME, FEMALES)


1 Nike 11% 1 Nike 13% 1 Adidas 10% 1 Adidas 12%

2 Ralph Lauren 10% 2 Ralph Lauren 10% 2 Nike 9% 2 Nike 9%

3 Adidas 7% 3 Adidas 8% 3 Ralph Lauren 6% 3 Ralph Lauren 5%


5 Vineyard Vines 3% 5 Vineyard Vines 5% 5 Under Armour 4% 5 Under Armour 5%

6 Under Armour 3% 6 Under Armour 5% 6 Patagonia 3% 6 Vineyard Vines 4%


8 Hollister 2% 8 H&M 2% 8 lululemon 2% Supreme 3%

9 New Balance 2% 9 lululemon 2% 9 Gucci 2% 9 Patagonia 3%

10 Four Brands Tied 2% 10 Hollister 2% 10 Vineyard Vines 2% 10 lululemon 2%



2 Nike 6% 2 Urban Outfitters 5% 2 Urban Outfitters 6% 2 Forever 21 6%

3 Forever 21 5% 3 Free People 5% 3 Nike 6% 3 Adidas 5%

4 H&M 4% Nike 5% 4 Forever 21 5% 4 PacSun 5%

5 Victoria's Secret 4% 5 lululemon 4% 5 Adidas 4% 5 Nike 4%

6 Express 4% 6 Victoria's Secret 4% lululemon 4% 6 lululemon 4%

7 Adidas 3% 7 Adidas 4% 7 Victoria's Secret 4% 7 Free People 4%

Free People 3% 8 PacSun 4% 8 H&M 4% 8 Vans 4%

Hollister 3% 9 Forever 21 4% 9 PacSun 3% 9 Urban Outfitters 3%

lululemon 3% 10 Brandy Melville 3% 10 Free People 3% 10 Three Brands Tied 3%

of 66


Downtrending Brands

BRANDS NO LONGER WORN (UPPER-INCOME, MALES)

BRANDS NO LONGER WORN (UPPER-INCOME, FEMALES)


1 Aeropostale 26% 1 Justice 29% 1 Aeropostale 26% 1 Justice 27%

2 Justice 20% 2 Aeropostale 17% 2 Justice 21% 2 Aeropostale 20%

3 Abercrombie & Fitch 12% 3 Abercrombie & Fitch 12% 3 Hollister 10% 3 Hollister 8%

4 Hollister 9% 4 Hollister 9% 4 Abercrombie & Fitch 9% 4 Abercrombie & Fitch 6%

5 Gap 5% 5 Gap 4% 5 American Eagle 3% 5 Gap 4%

6 Old Navy 3% 6 Forever 21 3% 6 Forever 21 3% 6 American Eagle 2%

7 Forever 21 2% 7 American Eagle 1% 7 Old Navy 2% 7 Forever 21 2%

8 American Eagle 2% Old Navy 1% 8 Gap 2% 8 Old Navy 2%

9 Nike 2% 9 H&M 1% 9 Adidas 2% 9 Roxy 2%

10 Target 1% Ralph Lauren 1% 10 Nike 1% 10 Nike 2%

Victoria's Secret 1%


1 Gap 13% 1 Adidas 10% 1 Under Armour 11% 1 Under Armour 10%

2 Adidas 9% 2 Gap 10% 2 Gap 10% 2 Gap 9%

3 Abercrombie & Fitch 7% 3 Under Armour 7% 3 Adidas 9% 3 Adidas 9%

4 Nike 7% 4 Nike 6% 4 Nike 7% 4 Reebok 7%

5 Under Armour 6% 5 Reebok 6% 5 Reebok 6% 5 Nike 7%

6 Hollister 5% 6 Skechers 5% 6 Aeropostale 6% 6 Skechers 5%

7 Reebok 5% 7 Puma 5% 7 Puma 4% 7 Puma 5%

8 Aeropostale 4% 8 Abercrombie & Fitch 4% 8 American Eagle 4% 8 Old Navy 4%

9 American Eagle 4% 9 Hollister 4% 9 Hollister 4% 9 Hollister 4%

10 Skechers 3% 10 Aeropostale 3% 10 Skechers 3% 10 American Eagle 3%

Champion 3%

of 66


Top Clothing Brands Among Upper-IncomePREFERRED CLOTHING BRANDS (UPPER-INCOME, ALL TEENS)

PREFERRED CLOTHING BRANDS (UPPER-INCOME, MALES)

PREFERRED CLOTHING BRANDS (UPPER-INCOME, FEMALES)




3 Forever 21 7% 3 Forever 21 5% 3 Forever 21 5% 3 Adidas 4%

4 Ralph Lauren 6% 4 Ralph Lauren 4% 4 lululemon 3% 4 Forever 21 4%

5 Hollister 4% 5 Urban Outfitters 3% 5 H&M 3% 5 Hollister 4%

6 PacSun 3% 6 H&M 3% Adidas 3% 6 PacSun 3%

7 Urban Outfitters 3% 7 PacSun 2% 7 Hollister 2% 7 lululemon 3%

Victoria's Secret 3% 8 Adidas 2% 8 Urban Outfitters 2% 8 H&M 3%

9 H&M 3% 9 Vineyard Vines 2% Vans 2% 9 Urban Outfitters 3%

10 Adidas 2% 10 Victoria's Secret 2% 10 PacSun 2% 10 Supreme 3%

Ralph Lauren 2%



2 Ralph Lauren 10% 2 Ralph Lauren 6% 2 Adidas 4% 2 Adidas 6%


4 Adidas 3% 4 Adidas 3% 4 Ralph Lauren 4% 4 Supreme 4%

5 PacSun 3% 5 Vineyard Vines 3% 5 Vans 3% 5 Ralph Lauren 4%

6 Hollister 2% 6 H&M 3% 6 Under Armour 3% 6 Vans 4%

7 Abercrombie & Fitch 2% 7 Vans 2% 7 H&M 2% 7 Vineyard Vines 3%

8 Vans 2% 8 Under Armour 2% Supreme 2% Hollister 3%

9 Supreme 2% 9 PacSun 1% 9 Hollister 2% 9 H&M 2%

10 Vineyard Vines 2% Hollister 1% 10 Vineyard Vines 2% 10 Gucci 2%



2 American Eagle 11% 2 Forever 21 11% 2 Forever 21 11% 2 Forever 21 9%


4 Victoria's Secret 6% 4 Urban Outfitters 7% 4 lululemon 6% 4 Urban Outfitters 5%

5 Urban Outfitters 5% 5 Victoria's Secret 5% 5 Urban Outfitters 5% 5 PacSun 5%

6 Hollister 5% 6 H&M 3% 6 Victoria's Secret 5% 6 Hollister 5%

7 PacSun 4% 7 PacSun 3% 7 H&M 4% 7 lululemon 5%

8 H&M 4% 8 lululemon 3% 8 Hollister 4% 8 Victoria's Secret 4%

9 Nordstrom 3% 9 Brandy Melville 3% PacSun 4% 9 H&M 3%

10 Charlotte Russe 2% 10 Free People 3% 10 Free People 2% 10 Target 2%

Nordstrom 3%

of 66


Top Clothing Brands Among Average-IncomePREFERRED CLOTHING BRANDS (AVERAGE-INCOME, ALL TEENS)

PREFERRED CLOTHING BRANDS (AVERAGE-INCOME, MALES)

PREFERRED CLOTHING BRANDS (AVERAGE-INCOME, FEMALES)




3 Forever 21 5% 3 Forever 21 6% 3 Forever 21 5% 3 Forever 21 6%

4 Ralph Lauren 5% 4 Ralph Lauren 5% 4 Ralph Lauren 4% 4 Adidas 4%

5 Victoria's Secret 4% 5 Hollister 3% 5 Victoria's Secret 4% 5 Victoria's Secret 4%

6 Hollister 4% 6 Victoria's Secret 3% 6 Hollister 3% 6 H&M 4%

7 H&M 2% 7 H&M 3% 7 H&M 3% 7 Hollister 3%

8 Under Armour 2% 8 Adidas 2% 8 Adidas 3% 8 Ralph Lauren 3%

9 PacSun 2% 9 rue21 2% 9 PacSun 3% 9 PacSun 2%

10 Aeropostale 2% 10 PacSun 2% 10 rue21 2% 10 Vans 2%



2 Ralph Lauren 8% 2 Ralph Lauren 7% 2 Ralph Lauren 6% 2 Adidas 6%


4 Under Armour 3% 4 Adidas 3% 4 Adidas 5% 4 Ralph Lauren 5%

5 Hollister 3% 5 Hollister 3% 5 Hollister 3% 5 H&M 3%

6 PacSun 2% 6 Under Armour 3% 6 H&M 3% 6 Supreme 3%

7 H&M 2% 7 H&M 2% 7 PacSun 2% 7 Hollister 3%

8 Adidas 2% 8 Vans 2% Under Armour 2% 8 Gucci 3%

9 Aeropostale 2% 9 PacSun 2% 9 Vans 2% 9 Under Armour 2%

10 Vans 2% 10 Levi's 2% 10 Supreme 2% 10 Vans 2%



2 American Eagle 11% 2 Forever 21 12% 2 Forever 21 11% 2 Forever 21 12%


4 Victoria's Secret 10% 4 Victoria's Secret 7% 4 Victoria's Secret 8% 4 Victoria's Secret 8%

5 Hollister 4% 5 rue21 4% 5 Hollister 4% 5 H&M 4%

6 rue21 3% 6 Hollister 4% 6 rue21 4% 6 Hollister 4%

7 H&M 2% 7 H&M 3% 7 H&M 3% 7 rue21 3%

8 Hot Topic 2% 8 PacSun 3% 8 PacSun 3% 8 PacSun 3%

9 Charlotte Russe 2% 9 Hot Topic 2% 9 lululemon 3% 9 Urban Outfitters 3%

10 Aeropostale 2% Ralph Lauren 2% 10 Hot Topic 2% 10 Hot Topic 2%

of 66


Top Footwear Brands Among Upper-IncomePREFERRED FOOTWEAR BRANDS (UPPER-INCOME, ALL TEENS)

PREFERRED FOOTWEAR BRANDS (UPPER-INCOME, MALES)

PREFERRED FOOTWEAR BRANDS (UPPER-INCOME, FEMALES)












UGG 1%



2 Vans 10% 2 Vans 11% 2 Vans 9% 2 Adidas 14%

3 Adidas 6% 3 Adidas 6% 3 Adidas 8% 3 Vans 10%

4 Sperry 4% 4 Sperry 3% 4 Sperry 3% 4 Sperry Top-Sider 2%

5 Converse 2% 5 Foot Locker 2% 5 Foot Locker 1% 5 New Balance 2%

6 Foot Locker 2% 6 Converse 2% 6 Converse 1% 6 Foot Locker 2%

7 Asics 1% 7 Under Armour 1% New Balance 1% 7 Converse 2%

8 Champs Sports 1% 8 ASICS 1% 8 Under Armour 1% 8 Finish Line 1%

9 Clarks 1% New Balance 1% 9 Skechers 1% 9 Under Armour 1%

10 Under Armour 0% 10 Finish Line 0% 10 Ralph Lauren 0% 10 Four Brands Tied 0%

New Balance 0%



2 Converse 14% 2 Converse 15% 2 Converse 14% 2 Converse 15%


4 DSW 7% 4 Steve Madden 5% 4 Adidas 7% 4 Adidas 7%

5 Steve Madden 5% 5 Adidas 5% 5 Steve Madden 6% 5 Birkenstock 5%

6 Adidas 3% 6 DSW 5% 6 DSW 5% 6 DSW 4%

7 UGG 3% 7 Birkenstock 4% 7 Birkenstock 2% 7 Steve Madden 3%

8 Sperry 2% 8 Nordstrom 2% 8 UGG 2% 8 Nordstrom 1%

9 TOMS 2% 9 UGG 2% 9 Payless ShoeSource 2% Foot Locker 1%

10 Foot Locker 2% 10 Michael Kors 1% 10 Nordstrom 2% 10 Payless ShoeSource 1%

Payless ShoeSource 2% Sperry 1% Famous Footwear 1%

of 66


Top Footwear Brands Among Average-IncomePREFERRED FOOTWEAR BRANDS (AVERAGE-INCOME, ALL TEENS)

PREFERRED FOOTWEAR BRANDS (AVERAGE-INCOME, MALES)

PREFERRED FOOTWEAR BRANDS (AVERAGE-INCOME, FEMALES)






5 Sperry 2% 5 Foot Locker 3% 5 Foot Locker 2% 5 Foot Locker 2%

6 Foot Locker 2% 6 Sperry 2% 6 Sperry 2% 6 Birkenstock 2%

7 Steve Madden 1% 7 Birkenstock 2% 7 Steve Madden 1% 7 Sperry Top-Sider 2%

8 DSW 1% 8 Steve Madden 1% 8 Birkenstock 1% 8 Steve Madden 1%

9 Under Armour 1% 9 Payless ShoeSource 1% DSW 1% 9 Puma 1%

10 Journeys 1% 10 Under Armour 1% 10 Under Armour 1% DSW 1%

Payless ShoeSource 1%

UGG 1%



2 Vans 9% 2 Vans 9% 2 Adidas 9% 2 Adidas 13%

3 Adidas 4% 3 Adidas 6% 3 Vans 8% 3 Vans 9%

4 Converse 2% 4 Foot Locker 3% 4 Sperry 3% 4 Sperry 3%

5 Sperry 2% 5 Sperry 2% 5 Foot Locker 2% 5 Foot Locker 2%

6 Foot Locker 2% 6 Converse 2% 6 Converse 2% 6 Converse 2%

7 Under Armour 1% 7 Under Armour 1% 7 Under Armour 1% 7 Gucci 1%

8 Ariat 1% 8 New Balance 1% 8 New Balance 1% Under Armour 1%

9 ASICS 1% 9 ASICS 1% 9 Ariat 1% 9 New Balance 1%

10 Ralph Lauren 1% 10 Ralph Lauren 1% Ralph Lauren 1% 10 Puma 1%

Skechers 1%



2 Converse 11% 2 Converse 12% 2 Converse 12% 2 Vans 12%

3 Vans 8% 3 Vans 9% 3 Vans 11% 3 Converse 12%

4 Steve Madden 3% 4 Adidas 4% 4 Adidas 6% 4 Adidas 7%

5 Adidas 3% 5 Birkenstock 3% 5 Steve Madden 3% 5 Birkenstock 4%

6 DSW 2% 6 Foot Locker 2% 6 Birkenstock 2% 6 Steve Madden 3%

7 UGG 2% 7 Steve Madden 2% DSW 2% 7 Foot Locker 2%

8 Payless ShoeSource 2% 8 Sperry 2% Foot Locker 2% 8 DSW 2%

9 Birkenstock 2% 9 Payless ShoeSource 2% 9 Journeys 1% 9 Journeys 1%

10 Foot Locker 2% 10 DSW 1% 10 Sperry 1% 10 Puma 1%

of 66


Top Athletic Clothing Brands Among Upper-Income

PREFERRED ATHLETIC CLOTHING BRANDS (UPPER-INCOME, ALL TEENS)

PREFERRED ATHLETIC CLOTHING BRANDS (UPPER-INCOME, MALES)

PREFERRED ATHLETIC CLOTHING BRANDS (UPPER-INCOME, FEMALES)



2 Adidas 7% 2 lululemon 7% 2 Adidas 8% 2 Adidas 10%

3 Under Armour 5% 3 Adidas 7% 3 lululemon 7% 3 lululemon 7%

4 lululemon 5% 4 Under Armour 6% 4 Under Armour 7% 4 Under Armour 6%

5 The North Face 1% 5 Athleta 1% 5 Patagonia 1% 5 Patagonia 1%

The North Face 1% The North Face 1%



2 Adidas 8% 2 Under Armour 7% 2 Under Armour 10% 2 Adidas 11%

3 Under Armour 7% 3 Adidas 7% 3 Adidas 6% 3 Under Armour 9%

4 The North Face 2% 4 lululemon 1% 4 lululemon 2% 4 lululemon 1%

5 Bauer 1% 5 Columbia 1% 5 Bauer 1% 5 Patagonia 1%

Patagonia 1%



2 lululemon 9% 2 lululemon 15% 2 lululemon 14% 2 lululemon 15%

3 Adidas 5% 3 Adidas 7% 3 Adidas 9% 3 Adidas 9%

4 Under Armour 4% 4 Under Armour 4% 4 Under Armour 3% 4 Under Armour 3%

5 Athleta 2% 5 Athleta 1% 5 Fabletics 1% 5 Athleta 1%

The North Face 1%

of 66


Top Athletic Clothing Brands Among Average-Income

PREFERRED ATHLETIC CLOTHING BRANDS (AVERAGE-INCOME, ALL TEENS)

PREFERRED ATHLETIC CLOTHING BRANDS (AVERAGE-INCOME, MALES)

PREFERRED ATHLETIC CLOTHING BRANDS (AVERAGE-INCOME, FEMALES)



2 Under Armour 10% 2 Under Armour 9% 2 Adidas 9% 2 Adidas 11%

3 Adidas 5% 3 Adidas 7% 3 Under Armour 8% 3 Under Armour 8%

4 lululemon 2% 4 lululemon 2% 4 lululemon 3% 4 lululemon 3%

5 The North Face 1% 5 Victoria's Secret 1% 5 The North Face 1% 5 Victoria's Secret 1%



2 Under Armour 12% 2 Under Armour 11% 2 Under Armour 10% 2 Adidas 11%

3 Adidas 6% 3 Adidas 8% 3 Adidas 10% 3 Under Armour 10%

4 The North Face 1% 4 Columbia 1% 4 lululemon 1% 4 lululemon 1%

5 Columbia 0% The North Face 1% 5 The North Face 1% 5 The North Face 1%



2 Under Armour 9% 2 Under Armour 7% 2 Adidas 8% 2 Adidas 10%

3 Adidas 4% 3 Adidas 6% 3 lululemon 6% 3 Under Armour 6%

4 lululemon 4% 4 lululemon 5% 4 Under Armour 6% 4 lululemon 5%

5 Victoria's Secret 1% 5 Victoria's Secret 1% 5 The North Face 1% 5 Victoria's Secret 2%

Victoria's Secret 1%

of 66


Top Athletic Footwear Brands Among Upper-Income

PREFERRED ATHLETIC FOOTWEAR BRANDS (UPPER-INCOME, ALL TEENS)

PREFERRED ATHLETIC FOOTWEAR BRANDS (UPPER-INCOME, MALES)

PREFERRED ATHLETIC FOOTWEAR BRANDS (UPPER-INCOME, FEMALES)




3 ASICS 2% 3 ASICS 2% 3 New Balance 2% 3 New Balance 2%

4 New Balance 1% New Balance 2% 4 ASICS 2% 4 ASICS 2%

5 Under Armour 1% 5 Under Armour 1% Under Armour 2% 5 Under Armour 2%




3 ASICS 2% 3 ASICS 2% 3 ASICS 3% 3 ASICS 2%

4 Brooks 1% 4 New Balance 1% 4 New Balance 1% 4 New Balance 2%

5 Mizuno 1% 5 Brooks 1% 5 Brooks 1% 5 Under Armour 1%

Saucony 1%

Under Armour 1%




3 New Balance 2% 3 New Balance 2% 3 Under Armour 2% 3 Under Armour 2%

4 Under Armour 2% 4 Under Armour 2% 4 New Balance 2% 4 New Balance 2%


of 66


Top Athletic Footwear Brands Among Average-Income

PREFERRED ATHLETIC FOOTWEAR BRANDS (AVERAGE-INCOME, ALL TEENS)

PREFERRED ATHLETIC FOOTWEAR BRANDS (AVERAGE-INCOME, MALES)

PREFERRED ATHLETIC FOOTWEAR BRANDS (AVERAGE-INCOME, FEMALES)





4 ASICS 1% 4 ASICS 1% 4 New Balance 2% 4 New Balance 1%

5 New Balance 1% 5 New Balance 1% 5 ASICS 1% 5 ASICS 1%





4 New Balance 1% 4 New Balance 2% 4 New Balance 2% 4 New Balance 1%





3 Under Armour 1% 3 ASICS 1% 3 Under Armour 1% 3 ASICS 1%

4 ASICS 1% 4 Under Armour 1% 4 ASICS 1% 4 Under Armour 1%

5 Mizuno 1% 5 Brooks 1% 5 New Balance 1% 5 New Balance 1%

of 66


Erinn Murphy

Managing Director

Sr. Research Analyst

Global Fashion &

Lifestyle Brands

Nicole Miller Regan

Managing Director


Restaurants

Sam Kemp

Vice President


Internet

Stan Meyers

Vice President


Media &

Entertainment

Meet Our Senior Analyst Team

Mike Olson

Managing Director


Consumer

Technology &

eCommerce

of 66


IMPORTANT RESEARCH DISCLOSURES

Distribution of Ratings/IB ServicesPiper Jaffray

IB Serv./Past 12 Mos.

Rating Count Percent Count Percent

BUY [OW] 380 57.66 104 27.37

HOLD [N] 259 39.30 26 10.04

SELL [UW] 20 3.03 1 5.00

Note: Distribution of Ratings/IB Services shows the number of companies currently covered by fundamental equity research in each rating category fromwhich Piper Jaffray and its affiliates received compensation for investment banking services within the past 12 months. FINRA rules require disclosureof which ratings most closely correspond with "buy," "hold," and "sell" recommendations. Piper Jaffray ratings are not the equivalent of buy, hold or sell,but instead represent recommended relative weightings. Nevertheless, Overweight corresponds most closely with buy, Neutral with hold and Underweightwith sell. See Stock Rating definitions below.

Analyst Certification — Erinn E. Murphy, Sr Research Analyst— Nicole Miller Regan, Sr Research Analyst

— Michael J. Olson, Sr Research Analyst

— Sam Kemp, Sr. Research Analyst

— Stan Meyers, Sr. Research AnalystThe views expressed in this report accurately reflect my personal views about the subject company and the subject security. In addition, no part of mycompensation 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 overall firm revenues, which include investment banking revenues.

Time of dissemination: 11 October 2017 03:19EDT.

of 66


Affiliate disclosures: Piper Jaffray is the trade name and registered trademark under which the corporate and investment banking products and servicesof Piper Jaffray Companies and its subsidiaries Piper Jaffray & Co. and Piper Jaffray Ltd. are marketed. Simmons & Company International is a divisionof Piper Jaffray & Co. This report has been prepared by Piper Jaffray & Co. and/or its affiliate Piper Jaffray Ltd. Piper Jaffray & Co. is regulated by FINRA,NYSE and the United States Securities and Exchange Commission, and its headquarters are located at 800 Nicollet Mall, Minneapolis, MN 55402. PiperJaffray Ltd. is authorized and regulated by the Financial Conduct Authority, and is located at 88 Wood Street, 13th Floor, London EC2V 7RS. Disclosuresin this section and in the Other Important Information section referencing Piper Jaffray include all affiliated entities unless otherwise specified.

Rating DefinitionsStock Ratings: Piper Jaffray ratings are indicators of expected total return (price appreciation plus dividend) within the next 12 months. At times analystsmay specify a different investment horizon or may include additional investment time horizons for specific stocks. Stock performance is measuredrelative to the group of stocks covered by each analyst. Lists of the stocks covered by each are available at www.piperjaffray.com/researchdisclosures.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, butthe 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 orinternal trading desks reflecting different opinions than those expressed by the research analyst. In addition, Piper Jaffray offers technical and event-driven research products that are based on different methodologies, may contradict the opinions contained in fundamental research reports, and couldimpact the price of the subject security. Recommendations based on technical or event-driven analysis are intended for the professional trader, whilefundamental 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.

Other Important InformationThe material regarding the subject company is based on data obtained from sources we deem to be reliable; it is not guaranteed as to accuracy and doesnot purport to be complete. This report is solely for informational purposes and is not intended to be used as the primary basis of investment decisions.Piper Jaffray has not assessed the suitability of the subject company for any person. Because of individual client requirements, it is not, and it should notbe construed as, advice designed to meet the particular investment needs of any investor. This report is not an offer or the solicitation of an offer to sellor buy any security. Unless otherwise noted, the price of a security mentioned in this report is the market closing price as of the end of the prior businessday. Piper Jaffray does not maintain a predetermined schedule for publication of research and will not necessarily update this report. Piper Jaffray policygenerally prohibits research analysts from sending draft research reports to subject companies; however, it should be presumed that the fundamental equityanalyst(s) who authored this report has had discussions with the subject company to ensure factual accuracy prior to publication, and has had assistancefrom the company in conducting diligence, including visits to company sites and meetings with company management and other representatives.Notice to customers: This material is not directed to, or intended for distribution to or use by, any person or entity if Piper Jaffray is prohibited or restrictedby any legislation or regulation in any jurisdiction from making it available to such person or entity. Customers in any of the jurisdictions where Piper Jaffrayand its affiliates do business who wish to effect a transaction in the securities discussed in this report should contact their local Piper Jaffray representative,or as otherwise noted below. Canada: This research report is distributed in Canada by CIBC World Markets Inc. Investors in Canada wishing to effecta transaction in the securities discussed in this report should contact their CIBC sales representative. This research report has not been prepared inaccordance with the disclosure requirements of Dealer Member Rule 3400 – Research Restrictions and Disclosure Requirements of the Investment IndustryRegulatory Organization of Canada. For further disclosure related to CIBC conflicts of interest please visit https://researchcentral.cibcwm.com. Europe:This material is for the use of intended recipients only and only for distribution to professional and institutional investors, i.e. persons who are authorisedpersons or exempted persons within the meaning of the Financial Services and Markets Act 2000 of the United Kingdom, or persons who have beencategorised by Piper Jaffray Ltd. as professional clients under the rules of the Financial Conduct Authority. United States: This report is distributed in theUnited States by Piper Jaffray & Co., member SIPC, FINRA and NYSE, Inc., which accepts responsibility for its contents. The securities described in thisreport may not have been registered under the U.S. Securities Act of 1933 and, in such case, may not be offered or sold in the United States or to U.S.persons unless they have been so registered, or an exemption from the registration requirements is available.This report is produced for the use of Piper Jaffray customers and may not be reproduced, re-distributed or passed to any other person or published inwhole or in part for any purpose without the prior consent of Piper Jaffray & Co. Additional information is available upon request.Copyright 2017 Piper Jaffray. All rights reserved.

of 66

https://researchcentral.cibcwm.com

consumer - piper jaffray · 2017-10-11 · industry note consumer october 11, 2017 taking stock...

Documents