Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Deckers Brands Second Quarter Fiscal 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like to remind everyone that this conference call is being recorded. I'll now turn the call over to Brendon Frey, Managing Director of ICR. Brendon Frey - Managing Director-Retail, Apparel & Footwear, ICR LLC: Welcome everyone joining us today. Before we begin, I would like to remind everyone of the company's Safe Harbor policy. Please note that certain statements made on this call are forward-looking statements within the meaning of the federal securities laws, which statements are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements made on this call other than statements of historical fact are forward-looking statements. These may include statements relating to the company's anticipated financial performance, including its projected revenues, expenses, gross margin, operating margin, capital expenditures, earnings per share, and effective tax rate. These statements may also relate to the company's brand strategies, store expansion plans, inventory management systems, retailer retention policies, business transformation plan as well as the outlook for the company's markets and the demand for its products. Forward-looking statements made on this call represent our current expectations and are based on currently available information. Forward-looking statements involve numerous risks and uncertainties that may cause actual results to differ materially from any results predicted, assumed, or implied by the forward-looking statements. The company has explained some of these risks and uncertainties in its SEC filings, including the risk factors section on its Annual Report on Form 10-K. Given these risks and uncertainties, listeners are cautioned not to place undue reliance on these forward-looking statements. Except as required by law or the listing rules of the New York Stock Exchange, the company expressly disclaims any intent or obligation to update any forward-looking statements whether to conform such statements to actual results or to changes in our expectations or as a result of the availability of new information. As a reminder, we have posted supplemental information about the 2016 second quarter in a document entitled second quarter fiscal 2016 commentary. This document is on our corporate website at www.deckers.com. You can access this document by clicking on the Investor Information tab and then scrolling down to the Featured Reports heading. With that, I'll now turn it over to Chief Executive Officer and Chair of the Board of Directors, Angel Martinez.

Well thanks, Brendon. Good afternoon, everyone, and thank you for joining us today. With me on the call is Dave Powers, President; and Tom George, Chief Financial Officer. Today, I'll begin with an overview of our second quarter results, and review each brand's performance. I'll then turn the call over to Dave, who'll provide an update to the key areas of focus that he laid out last quarter and the initiatives we have in place to drive our business in the back half of the year. Then we'll turn it over to Tom, who will provide more details on our performance in Q2, our guidance for Q3 and the year, an update on our sheepskin and UGGpure prices for next year as well as our long-term financial drivers. In the second quarter, we had record revenues of $487 million, or $506 million on a constant currency basis, an increase of 5.4% over last year. EPS for the quarter was $1.11 on a reported basis and $1.42 in constant currency, which represents growth of over 21%. Both our top and bottom line results were in line with our expectations keeping us on track to achieve our full year guidance. Our recent and projected full year performance would not be possible without the investments we've made over the last several years. The majority of these investments have been directed toward five key areas. Number one, Omni-Channel; number two; product innovation; number three, marketing; number four, people and number five, international expansion. I'd like to take a moment to reflect on the progress we've made in these areas. Since 2010, we've expanded our global footprint and connected our stores and e-commerce sites to create one of the leading Omni-Channel platforms in our industry. We've introduced compelling new products that have broadened our brand's…

Thank you, Angel. As Angel just mentioned, we are excited as we enter into our busiest selling season and about the opportunities that lie ahead of us. This year we have made a number of strategic changes that put us in a strong position to execute our plans for the year. We have evolved our product to be more closely tailored to current trends and modified the assortment in each of our distribution channels to better align with our consumer demand. We have also better support for our products through more targeted marketing campaigns and enhanced analytics. I'll share more with you on these changes in a minute. Today, I'm going to touch on four areas of the business, providing you with updates on our progress and our plans going forward. First, I'll review the results of our DTC business. Second, I'll cover how we are unleashing the UGG brand this fall and holiday. Third, I'll discuss how we are driving efficiencies to transform our organization. And finally, I'll update you on our outlook in Q4. First, I would like to address the results of our DTC business, which includes retail and e-commerce. As a reminder, we report our DTC business on a combined basis as this better reflects how our management team manages and evaluates our business in light of the evolution of our Omni-Channel strategy. As we have discussed previously, the principal reason for this view are due to the interconnectedness of our retail and e-commerce business and the ways in which they feed off each other as well as how we communicate and build relationships with our consumers. Our DTC comp for the quarter was down mid single digits. This was driven primarily by declines in five of our domestic concept locations, Madison Avenue, Honolulu, Las Vegas,…

Good afternoon, everyone. Before I begin, I would like to remind everyone that we posted a commentary on the quarterly financials under the Investor Information tab on our corporate website. In summary, our sales results were in line with expectations and earnings per share was slightly better than our forecast due primarily to timing of expenses now expected to be incurred in the back half of the year and the benefit of our Q2 share repurchase. Now starting with revenue on a constant currency basis, for the quarter revenue increased 5.4% to $506 million. On a reported basis revenue increased 1.4% to $487 million. Gross margin was 44% in the second quarter compared to 46.6% last year. The change in gross margin was primarily due to FX headwinds from the strengthening of the U.S. dollar. We gained SG&A leverage this quarter with SG&A, as a percent of sales, at 33.5% compared to 34.2% a year ago. For the remainder of the fiscal year, we are on track to deliver leverage. For the quarter, we reported earnings per share of $1.11 versus $1.17 a year ago and better than our guidance of $1.05 per share. Inventories at the end of Q3 were $595 million, an increase of 23.5% over the same period last year. Our inventory is well positioned to support growth during the back half including more core classics to chase in-season demand as part of the shift in our pre-book strategy that we developed with our wholesale partners. Also, we are carrying more weather and causal product to allow for our wholesale partners to reorder in-season and to reduce the stock outs we experienced last year. For Q3 and Q4, we expect sales growth to outpace inventory growth. During the quarter, we repurchased approximately 354,000 shares or $23.8 million…

Thank you. Thank you. Our first question comes from the line of Omar Saad from Evercore. Please proceed with your question.

Thanks, for solid quarter guys.

Thanks, Omar.

Thanks, Omar.

I wanted to ask – yeah, sure. I wanted to ask about the holiday push, a lot of stuff that, Dave, you talked about around the classics franchise and the genesis of this kind of evolved strategy what you think you've been missing in the past. How big an opportunity is it? And, I guess, my follow-up question is to help us think about the inventory strategy mechanically, how that better positions you and does it reduce risk having that much inventory or just fulfill chase opportunities, I guess the two part sort of the same idea?

Yeah, great question. And I really look at this, Omar, as a turning point for the UGG brand. We have turned the corner on reliance on our four classics business. We know have great success in our casual boots and our weather. In fact, the core classics as a percent of total women's business is down below 35%, 25% of our total UGG business. So, it just speaks to the opportunity that we have in new categories beyond classics. But at the same time we are not complacent with the classics business either. So what you've seen with the Luxe introduction and the slim introduction next week, those are evolutions of the core classic items into opportunities for new customers and new wearing occasions for our brand and at the same time, we are also going back and making sure that we are taking a good look at the core classics, which quite frankly we've been a little bit complacent with over the years. And so, what we've said is we really listened to consumer insights on what they are looking for in classics going forward and we're going to apply some innovation to those classics for next fall. We are still working through the mechanics of that and so it's too early to see any specifics with regards to its inventory strategy and how that's going to play out but we are committed to keeping that a full price business and managing through the inventory accordingly so it doesn't disrupt the market. But the good news is next year it creates a lot more flexibility in our core business as well as our specialty classics business. So, instead of putting 40%, 50% of our core classic into the marketing place and hoping they sell, we have a lot more options for the consumers and we have a lot more leverages to pull in the process. So, I think it's an exciting time to the UGG brand, I think it is an exciting time for the UGG consumer and I think they are really going to benefit from the evolution of the classics and the updates that we have coming down the pike.

Okay, and then just to be clear the gross margin, the change in year-over-year trend in the gross margin this quarter is entirely related to I guess you call it transactional currency exposure and not something going on with inventory or products?

No, it's right on margins (33:25)

Yes.

Primarily due to FX headwinds year-over-year.

Yeah, yeah.

Just to comment quickly on the inventory, we're really pleased really we have been able to manage our inventory levels at the end of this quarter. We've actually brought in from inventory earlier as we've had the capability to chase some product in-season. It also helps us mitigate the stock-outs we had last year and most of the inventory increase is really related to higher quantities of women's leather and casual boots and men's slipper and leather products and that all supports our pre-book strategy we had, the shift in most of the wholesale orders that we talked about in the past. I think another thing to point out on inventory is, into the third quarter and the fourth quarter our inventory levels, the growth year-over-year is going to moderate significantly and the growth levels are going to be lower than our guided sales growth. And for the total year, at the end of the year, our UGG inventory level will be half what it is at the end of September.

And I think the other thing on the inventory is the majority of the increase is coming out of non-core classic. So, it's more the casual boots and weather, which we missed opportunity in last year and we are really poised to chase that business in the end of Q3 into Q4 this year.

Thanks, it's all really helpful.

Our next question comes from the line of Bob Drbul with Nomura. Please go ahead with your question.

Hi. Good afternoon. I just had two questions. The first one is, you are talking about the weather impacting the business and I guess, have you had any major cancellations from your retail partners, September or October, that you could speak to. And then the second question is, on expenses, Tom, you said there was a shift out of the quarter. I was wondering if you could quantify how much of that came out of the second quarter and you know maybe the increased marketing, any ideas on how much more you are spending in the third quarter?

Yeah, maybe I'll start with the expense shift; it was about $2 million to $3 million and it was mostly marketing, and that went into the December quarter. In terms of cancellations we're really too early in the season, really. We really haven't had anything of significance. If there is weather issues down the road, most of those cancellations would come later in the quarter.

Yeah.

If any at all.

Yeah, no, and we haven't had anything significant. And any cancellations that we've had, for the most part, we are able to back-fill or replace that business with casual boots and weather product that is selling through well, so.

Great, thank you very much.

Yeah.

Our next question comes from the line of Camilo Lyon with Canaccord. Please proceed with your question.

Thanks, nice quarter guys. Just a follow-up on the last question. Could you just help reconcile some of the commentary we have been hearing? So there's obviously warmer weather that's impacted the classics business, you've commented on that. There is also a lot of talk of excess inventory in the channel, yet your guidance is – embeds a pretty significant acceleration. Just help us connect the dots there and understand exactly what's going on there because it seems like there is something that's not necessarily congruent there.

Yeah. I think the thing you have to remember Camilo is that usually – August and September are small quarters, small months for the core classic business. So even though the weather has been warm and that's true, we're hearing that, and it has affected the core selling; it's a small portion of inventory that we're talking about. So there isn't a big backlog that's left over from what we would have sold in September and August in Q3 because of that softness in the business. Business excess in the channel overall, we're not really seeing that. We are managing that well. If you remember we planned the core classics business down from an open to buy perspective and shifted people's inventory to more into casual boots and weather and those are the things that are selling through. So, at this point, things look as planned.

Great. And then just my follow-up is, is there an added expectation of cancellations that's built into your plan. I think before you were looking at cancellations offsetting reorders; is that still the case, or is there more of a weighting towards cancellations?

No, that – it's still our original guidance. The small amount of reorders are assumed and the small amount of cancellations that would offset each other. So we feel really good where we are at right now with the business.

Thanks very much. Good luck.

Thanks.

And next question is from the line of Taposh Bari with Goldman Sachs. Please proceed with your questions. Taposh Bari - Goldman Sachs & Co.: Hey, good morning or good afternoon. So, Angel and Dave, nice to see you guys able to deliver versus your expectations, a lot of external headwinds out there, especially a lot of weather talk.

Thank you. Taposh Bari - Goldman Sachs & Co.: You guys called out core classic weakness and tourism pressure, yet you were still able to make your numbers. I guess if I think back to Deckers of the past that might not have happened. So I'm trying to better understand in light of some of the sort of those headwinds, how you were able to still deliver. And, if in fact, the business is a little bit less sensitive to some of those external factors like weather as we think about what could or could not happen in terms of seasonality into the holiday?

Yeah. Thanks Taposh. I think it's a radically different scenario now that we have versus a few years ago, even last year. Last year was a bit of a wakeup call for us because we saw that we were still – even though we have been innovating a lot of new product, we felt that we still had exposure. And as Dave said, we consciously moved our customer base off of core classic and into the fashion and the weather product that is performing quite well and tried to right-size the classic business going forward, understanding that it's a core staple of a lot of wardrobes and a lot of people's closets and we need more innovation there. So really our idea here is to create a brand, a lifestyle brand, that is appropriate for any kind of seasonality. You know, whether it's rain or whether it's very cold weather or our spring line has done quite well. So, we really needed to dimensionalize the brand and I think the team has done that. They have done a fantastic job with that. Another thing that we have done is that we've have got a lot more insight into our business. As you know, we've been investing in business transformation. We are much better able to review the state of our business in a real-time basis and make adjustments, and a lot of adjustments are being made because we have insights that we wouldn't have if we were not an Omni-Channel business. So the fact is that with our own stores and our E-Commerce business, we are able to read the consumer preference and we're improving our time to market so that we are able to react in a much faster way. Witness, for example, the classic slim that's coming and launching in about a week or so, that was directly from consumers that we knew there were a large percentage of consumers that likes the brand but could not get past the shape of the original classic. And we think that classic slim is really going to be well received. So, it's a whole combination of things, but it's resulting in what, I'll use the phrase Dave used, unleash UGG. I mean, UGG is being unleashed. There was a lot of – I think on our part concern about accelerating innovation and not tipping the apple cart et cetera and what we found is that consumers really don't want that. Consumers want fresh product, exciting product, stuff that makes them get out of their chair and go to the store and not just click on a website because clearly what's good for everyone is have to have this brand, get people out to the stores to try the product on and that's the role of this brand in this time of the year and I think it's going to fulfill that mission for a lot of our customers.

Yeah. Just to add on to that one thing Taposh, is that softness that we are talking about in core classics is primarily an North American issue at the moment, and where we are seeing a little bit of offset in that is the international business. We've had great business in our DTC business outside the U.S. and particularly in the e-commerce growth in the multiple brands and multiple websites externally. Taposh Bari - Goldman Sachs & Co.: If I can just ask a quick follow up on that line of questioning. How are your retail partners responding to what you are doing and also vis-à-vis the external condition? So, as I think about kind of the investor reaction, mild weather equals inventory risk equals UGG exposure. I guess, again, that's the way it's put out in the past, but the brand is clearly demonstrated an ability to kind of endure that kind of seasonality and cyclicality and I am sure the retail partners have appreciated that. So is there a different mentality this time around in light of what's going on on the ground at retail?

Yeah. I think for the wholesale partners that have followed the strategy recommendations of changing their mix to be more reliant on weather and causal boots, they're seeing the benefits of that, and so that's a good story. They also know this is a very resilient brand and it's still early in the season and they know that when the weather turns, the consumer is going to come calling and they feel very good about their ability to flex their inventory with our partnership to be able to meet those demand. So, for the most part we are having very healthy conversations with our partners and they are confident that we're going to deliver. Taposh Bari - Goldman Sachs & Co.: Great, all the best.

Thanks.

Thanks.

Our next question comes from the line of Erinn Murphy with Piper Jaffray. Please go ahead with your question. Erinn E. Murphy - Piper Jaffray & Co (Broker): Great, thank you and good afternoon. Dave, I was hoping you could may be expand a little bit more about the Direct-to-Consumer business you just mentioned outside of the U.S. It sounds like that was a little bit better. Can you maybe just parse out for us in some sort of granularity the change between Europe, China and Japan and what you are really seeing in some of the international regions in that business?

Yeah. So I can only speak to total DTC, not particular retail versus e-commerce. But I will say that our comps outside the U.S. were very healthy double digit growth comps in Europe and low single digit growth in Asia Pacific. Consistent with what we've said about the (44:20) the tourist shopper is shopping a little bit more at home, but also to the strength of the assortment and the merchandising, the operation of the teams in those markets. So, China is showing signs of stabilization, Japan is still strong and the Europe business is actually, I would say, turned the corner and starting to improve nicely. Erinn E. Murphy - Piper Jaffray & Co (Broker): That's helpful to hear, thank you. And, I guess, just following up on the China piece and particularly as you do (44:43) you've actually kind of repriced some of the products there. Can you just talk about some of the learnings, what the consumer demand profiles look like post re-pricing? And then if you look across the fleet, are there any other key regions that you may have to revisit the pricing on in the later point? Thanks.

Yeah. Erinn, it's still early days in the pricing in China. That business is very seasonal over there, so we – the initial re-pricing was soft, but it wasn't a high seasonality timeframe for us in China. As the season kicks in, we are starting to see a nice healthy benefit from that pricing. It's not a dramatic change in pricing, but it's healthy and it's bringing more consumers into the brand, so I would say it's been a positive move and we will continue to monitor that. The other place we are looking to make adjustments is in the Hong Kong market to be consistent with the rest of Asia Pacific. But outside of that, we don't see any other pricing adjustments at this time. Erinn E. Murphy - Piper Jaffray & Co (Broker): Got it, thanks. And if I could just sneak in one more clarification for Tom, just on that second quarter gross margin being down about 260 basis points. Is that entire piece FX? I mean, were there any offset on the positive side just given your mix shift into DTC as well as the UGGpure's overall sheepskin costing environment being more favorable. We're just trying to kind of understand the major puts and takes of that line? Thanks you.

Yeah. Erinn, most of it was the FX headwind, that's about for the second quarter. It was 210 basis points of headwind. Few other things, small little amounts nothing really of significance that impacts things going forward.

Thank you. Our next question comes from the line of Corinna Van der Ghinst with Citigroup. Please go ahead with your question.

Thank you, hi. Firstly I wanted to address SG&A. I know Dave touched on some of the big picture areas that you guys are targeting. But could you maybe talk about some of the specific near term efficiencies driving improvement over the next couple of quarters? And also you guys talked about the supply chain process. Can you talk a little bit more about what you've changed or reengineered in your supply chain process to enable you to improve your speed to market in the near term whether with the classic luxe or slim or what you guys have coming out going forward?

Yeah, good question. We're putting a lot of focus on this right now and I think you heard some of the things we mentioned in the call with regards to restructuring our Hong Kong office over there that will have a knock on permanent effect on SG&A. Looking at licensing, leveraging our brands for procurement in other areas. Long-term we are looking at a few components. One, we're just looking at how to streamline the offering of our brand. So getting really focused on SKU productivity, adoption rates, and making sure that where we are putting our time and our development into the line is going to give us the biggest payback. So the brands are really focused on, eliminating unnecessary styles and SKUs. And that has a knock on effect on our development cost, on our sample cost, on our delivery cost, and allows us to be much more efficient at our factories as well. At the same time, we're also looking at consolidating our factory base in some cases to be more efficient and be closer to market and then just overall just improving our go-to-market process in general to eliminate waste in the process. So, it's still early days, but the teams are very, very focused on finding efficiencies in getting their energies and their efforts are focused on the areas they are going to give us the biggest pay back and I think we will have more to share with you on that in the next coming months. The other piece that will have continued benefits for us is the business transformation project that we are undergoing and you will start to see the benefits of that in inventory management in some places in margin over the next year.

Corinna, this is Tom, let me follow up as well. On our current SG&A structure over the past few years, we've been investing in our international infrastructure to be able to scale the business internationally both in Asia, in Europe as well as corporate infrastructure to scale a much bigger multi brand global company and we are starting to see leverage on those kinds of investments. So, really I don't see that many more of those kind of investments going forward and I think another thing to point out and this is really related to some of our segment reporting, our Direct-to-Consumer segment. That segment absorbs the overhead cost related to scale a much bigger Direct-to-Consumer business, including most of our Asia Pacific overheads and some of our Europe overheads are in that segment. And those investments really are behind us and we are starting to get leverage on those as well.

Okay, that's helpful commentary. And then just for my follow up. I did want to clarify some questions from earlier. Can you just help us understand in that 24% inventory growth in UGG, how much of that is in core classics and how much of it is in non-classics? And then just a review on share repurchases for the rest of the year? Thank you.

Very little of it is in core classics, most of it's in the non-classic product, it's in the weather product, it's in the women's casual as well, there is some increase in the men's products as well and slippers. We have a bigger investment in slippers than we did a year ago, because we actually had some stock outs a year ago, slippers early in the season, so. And the slim product, there is some slim in there as well. So, and we are really pleased in terms of our inventory management capability. We brought it in early, we didn't really want to have any logistic issues to stop us from having the product to service our busy part of the season. And consistent with that from an inventory management point of view, by the end of the year we expect the UGG inventory would be half to what it is at the end of this quarter. And I think another thing to point out is, we've talked about some startup issues related to our Moreno Valley distribution center. That distribution center does not service the UGG women's business, that's still on our Camarillo distribution center and there has been no issues there. That's mostly impacted our Sanuk business and we might get to it later, but as a result of that we've missed some sales with Sanuk and we're going to take down our Sanuk number for the year.

Great. And just on the share repurchases, please?

And on the share repurchase we did – we don't really comment on what we're going to do in the future. I think something to point out there is our – the period of time we're now in is our highest demand for working capital and therefore our highest borrowing on our line of credit. So you have to be sensitive to the cash needs to run the business, so therefore this period of time is the period of time we have fewer share repurchases.

Thank you. Our next question is from the line of Howard Tubin with Guggenheim. Please go ahead with your questions.

Hey. Thanks, guys. Can you just remind us, talking about UGGpure, where you stand in terms of its usage now in the sheepskin part of the UGG collection and where it will be next year if we look out to next year?

It's currently about 33%. We do see going forward more opportunities for that to expand going forward. I think something interesting to point out to our innovation with UGGpure and what it's done to the demand for the table grade product in the market. Table grade cost has actually gone down below some of the UGGpure cost. So we will even start addressing possibly using the even more table grade product going forward as well.

It's also a great opportunity for our Koolaburra brand as we start to ignite that business and bring that to market next fall.

Got it. Thank you very much.

Sure.

Our next question is from the line of Jim Duffy with Stifel. Please proceed with your question. Jim V. Duffy - Stifel, Nicolaus & Co., Inc.: Thanks, Good afternoon, guys. I have three questions for you. Hopefully two of them are quick. On the fiscal third quarter, what's the linearity of the quarter, kind of the split between months typically?

Mostly back end loaded.

Yeah.

(53:18) because there is a high element of Direct-to-Consumer, a high element of E-Commerce, so it's mostly back end loaded. Jim V. Duffy - Stifel, Nicolaus & Co., Inc.: Did I hear a 50% December?

No, no, no. Yeah.

Mostly back end loaded. Jim V. Duffy - Stifel, Nicolaus & Co., Inc.: Okay. And then, Tom, as you think about objectives to lever SG&A in fiscal 2017, what's the sales growth you would need for that?

That's a good question. We are not giving guidance for next year, so that's obviously a good question. That will be one element, and we – but I think the way we are looking at our SG&A and our overhead structure right now is, most of our investments are behind us and we've got the ability to leverage on – really on reasonable growth rates. And we're continuing to evaluate ways to streamline the business, like we've done in Asia Pacific with the Hong Kong streamlining. And we continue to evaluate how we're going to streamline other parts of the business around the world. And as I mentioned earlier on the call, we're starting to get good leverage on the buildup we've had to drive our Direct-to-Consumer business as well. Jim V. Duffy - Stifel, Nicolaus & Co., Inc.: Okay. Fair enough. And then the final question, I was a little confused on the inventory strategy and the position. It sounded like you were going to back stock inventory in classics but try to pre-book the other classifications, but you're saying the inventory growth is in the other classifications?

I think, Jim, the thing to point out there is we always have a certain level of safety stock at the classics at any point in time. It really – and we didn't grow that much at all, but in the newer product we do have the capability to service that product as well – reorders for that product, for weather product and the casual product. Because last year, we did have some stock outs on that product because we did get some reorders. Jim V. Duffy - Stifel, Nicolaus & Co., Inc.: Okay. Good luck guys. Oh, I am sorry go ahead.

No, that's good. Go ahead, Jim. Thanks. Jim V. Duffy - Stifel, Nicolaus & Co., Inc.: I was just going to say good luck to you guys in the coming months.

All right, Jim. Thank you Jim.

Our next question comes from the line of Mitch Kummetz with B. Riley. Please go ahead with your questions. Mitch Kummetz - B. Riley & Co. LLC: Yeah. Thanks for taking my questions. Tom, I was hoping you can give us a little more help on Q4. So I think you said $0.58 of earnings in the fourth quarter, if I heard you right or...?

$0.57. Mitch Kummetz - B. Riley & Co. LLC: $0.57, so that's a pretty big step up from Q4 last year. Obviously you expected the revenue to be up nicely; I think it was 18%, right? But can you kind of bridge the gap between the revenue growth and the earnings that your are expecting, maybe just touch upon kind of expectations around gross margin and SG&A for Q4?

Right. First off, just to reiterate on the top line, Dave gave you some detail about our confidence level to be able to drive that kind of revenue growth. We feel really good where our pre-book is at this point in time for the fourth quarter, as well as the product and other opportunities we have that are driving them. In terms of the margin, we are actually expecting improved gross margin relative to a year ago in that fourth quarter. And as you may recall, a year ago, we were closing down the TSUBO brand, the MOZO brand. We airfreighted a fair amount of product and we had some airfreight costs that put pressure on last year's gross margin. And there still will be some sheepskin benefit for Q4 as well. And then the – from an operating expense point of view, consistent with some of the earlier discussion, we're going to be getting leverage on the operating expenses in the fourth quarter. So that helps drive earnings per share growth. Mitch Kummetz - B. Riley & Co. LLC: Do you think more of the op margin increase will come on the SG&A side just given the level of sales growth that you are expecting?

I think the biggest driver there is just year-over-year gross margins as well as the top line growth. There will be some modest SG&A leverage, but the biggest driver there are the top line growth as well as the gross margin. And Mitch, while you're talking about gross margins, let me also add to the second quarter; there was a big FX headwind we talked about, 210 basis points to 220 basis points of FX headwind. We also had some pressure on the margin relative to a year ago because we did have to airfreight some product in as well just to make sure we had it available and had it in inventory to service the biggest part of the season. Mitch Kummetz - B. Riley & Co. LLC: Got it. And then as a follow-up, maybe on (58:02) Dave. You guys have talked a lot about kind of steering retailers towards the non-core product and you've had a lot of success with that. Can you talk a little bit about what's happening outside the U.S.? I mean, are you doing the same thing with your partners there even through the distributors and kind of what success level have you seen there in terms of the performance of the non-core product with international accounts?

Well, actually – this is Angel. We've have seen even more success particularly in Europe, for example. We've had – we've have been out of stock on a fair amount of what we call women's casual product. Our subsidiary in the UK is looking for inventory from the rest of the company, so that in and of itself has been – and that began in the second quarter. So that really is a good sign. Where people followed the strategy, the results proved to be what the consumer wanted. Mitch Kummetz - B. Riley & Co. LLC: And are you able to move some of the inventory from the U.S. over to Europe to kind of satisfy that demand?

Yeah. We are looking at areas in the company where – it's specific product so it depends of where the inventory fits, whether it's Asia Pacific or North America. But you know we are very flexible with our supply chain in our Omni-Channel organization, so we can make some of those moves. It's obviously at a cost, but it's better to make sure the consumer gets what they want and then have them wait, so those are the things we are looking at.

Thank you. Our final question today is coming from line of Scott Krasik with Buckingham Research. Please proceed with your questions.

Yeah. Hi, everyone. Thanks. A few questions on DTC. I know you are trying to get away from it, but can you sort of allude to, or generally, what the E-Commerce growth was in the quarter?

No, unfortunately, Scott, we are only reporting at a DTC level going forward, so I can't do that.

Okay. And then all of these DTC numbers, are these all constant currency?

Yeah, the comps are in constant currency, yes.

Okay. So, maybe talk about your confidence to see that accelerate to meet your target, which I think hasn't changed even though you are a little bit short this quarter?

Yeah. As we said in the call, in the script, there is lot of indications that are still positive for us delivering that number. You have to remember, we still have 75% of the year to go in DTC in Q3 and Q4 and we are off to a good start there. We are still optimistic about delivering that number. E-Com also starts to make up a bigger percentage of DTC sales in the back half, so the mix changes. At the end of Q3 into Q4, we start to lap that foreign tourism impact in our flagship stores, which is significant, so we'll get some of that back. And I think, like I said, the product launches, the marketing focus, the digital marketing and the analytics were all concentrated on driving traffic to the stores and driving traffic to the sites. And I would say we are better poised than ever to be able to pull some of those levers in the business.

And I think I just heard you say, just to be sure, did you say you are off to a good start in DTC in October?

Yeah, I can't comment on that. I mean things look like they are on plan.

Right.

Yeah.

Okay. Thanks.

Thank you. At this time, I'll turn this floor back to management for closing comments.

Well, thank you all for joining us today. Clearly, we are pretty confident in the strategic direction that we are moving in and we believe we are going to continue to deliver significant value to shareholders. I would like to thank our employees around the world. There has been a lot of heavy lifting, I hope you can appreciate that to make all of this change real. And I'm extremely proud of the work everyone's done, the long hours and the dedication and commitment that it's taken and the insight that we've got from our employees. So it's just a great group of people to work with and I am confident that we will continue to deliver results. So thank you all and we will speak to you on the next call.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.