Good morning, everyone, and welcome to The Hershey Company's Second Quarter 2017 Results Conference Call. My name is Keith, and I'll be your conference operator today. All participants have been placed in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. This call is scheduled to end at about 9:30 AM, so please limit yourself to one question so we can get to as many of you as possible. And please note this call may be recorded. Thank you. It's my pleasure to turn your conference over to Mr. Mark Pogharian. Please go ahead, sir.

Thank you, Keith. Good morning, ladies and gentlemen. Welcome to The Hershey Company's second quarter 2017 conference call. Michele Buck, President and CEO; and Patricia Little, Senior Vice President and CFO, will provide you with an overview of results, which will then be followed by a Q&A session. Let me remind everyone listening that today's conference call may contain statements which are forward-looking. These statements are based on current expectations, which are subject to risk and uncertainty. Actual results may vary materially from those contained in the forward-looking statements because of factors such as those listed in this morning's press release and in our 10-K for 2016 filed with the SEC. If you have not seen the press release, a copy is posted on our corporate website in the Investor Relations section. Included in the press release is a consolidated balance sheet and a summary of consolidated statements of income, prepared in accordance with GAAP. Within the Note section of the press release, we have provided adjusted pro forma reconciliations of select income statement line items quantitatively reconciled to GAAP. The company uses these non-GAAP measures as key metrics for evaluating performance internally. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the company believes the presentation of earnings, excluding certain items, provides additional information to investors to facilitate the comparison of past and present operations. As a result, we will discuss second quarter 2017 results excluding net pre-tax charges of $28.9 million, or $0.14 per share-diluted, which are primarily related to business realignment cost and derivative mark-to-marketing losses. These charges are defined in the appendix of this morning's earnings release, which is available on our website at www.TheHersheyCompany.com. Our discussion of any future projections will also exclude the impact of these net charges. And with that out of the way, let me turn the call over to Michele Buck.

Thanks, Mark, and good morning to all of you on the phone and webcast. Hershey's second quarter results were solid, with particular strength in market share and EPS delivery. And we made solid progress against the initiatives that we discussed with you earlier this year. I was pleased with our innovation performance and solid second quarter U.S. retail takeaway of 4%, driven both by our core brands and Easter, where we gained 1.6 market share points in this important season. Constant currency net sales increased 1.8% and were greater than our previous estimate, driven by the timing of new stand-up packaging as well as distributor changes by several customers. Gross margin was up nicely in Q2, and we continue to expect it to increase around 50 basis points for the full year. This will enable us to maintain investments in initiatives that should benefit the company in the near and long-term and drive future growth. Adjusted EPS of $1.09 was greater than our previous estimate, due to higher sales, gross margin expansion and the timing of advertising and related marketing investments versus our forecast. We continue to expect that full year advertising and related marketing will increase versus last year. The Margin for Growth Program we discussed on March 1st is progressing nicely. And we believe the benefit in 2017 will be a little bit better than our initial thoughts. Importantly, year-to-date adjusted operating income and adjusted EPS increased 13% and 23%, respectively. This puts us in a position to deliver solid full-year EPS growth at the high-end of our 7% to 9% range, while also enabling important investment in the business. Our core power chocolate brands, Reese's, Hershey's, Kit Kat and Kisses, continue to perform well, with retail takeaway up 6% and market share up 1 full point year-to-date.…

Thank you, Michele. Good morning to everyone on the phone and on the webcast. Second quarter net sales of $1.66 billion increased 1.5% versus last year. This was greater than the estimate we spoke to you about in April, due to the timing of some customer shipments that Michele discussed earlier. As implied in April, we did not expect a big acceleration in Q2 from a net sales and retail takeaway perspective, given the late Easter and the lapping of successful new product launches like Kit Kat Big Kat and Reese's Pieces Cups in the year-ago period. Adjusted earnings per share-diluted came in at $1.09, an increase of about 28% versus last year, driven by the higher sales, by solid gross margin expansion, OI improvements in the International and Other segment, driven by our Margin for Growth Program savings, which are coming in a little faster than we anticipated, a decline in corporate expenses and a reduction in the year-over-year tax rate that was in line with our estimate. Excluding unfavorable foreign currency translation of 0.3 points, net sales increased 1.8% versus the year-ago period. Volume was a 1.2 point contribution to sales growth, and net price realization was a 0.1 point favorable. The barkTHINS acquisition was a 50 basis point benefit in the second quarter and is relatively on track with our plans. By segment, North America net sales increased 2.2% versus the same period last year. Excluding Canada's unfavorable foreign currency translation of 0.3 points, net sales increased 2.5% versus the year-ago period. Volume was a 1.7 point contribution and net price realization was a 0.2 points favorable. The barkTHINS acquisition was a 60 basis point benefit. Given the level of competitive activity in the CMG category and the timing of innovation and promotions impacting year-over-year comparability, we…

We'll take your first question from Andrew Lazar. Please go ahead. Your line is open.

Good morning, everybody.

Good morning, Andrew.

Hi, Andrew.

My question is on marketing and advertising spend. I guess would you anticipate that the full-year spend that you plan is consistent with what you had initially targeted, just now concentrated in the back half of the year, as opposed to the increase that you thought previously in 2Q? And then, given that your brands in your business historically have been so responsive to the marketing spend, and you've got a lot of new stuff out there like the Cookie Layer Crunch and you've got some EPS flexibility in the 2Q, I guess. I guess I'm curious to get a little more color on why not spend earlier in the year behind some of these initiatives when your brands really are so responsive? Thank you.

So Andrew, as you know, we are big believers in investment in our brands. It's a key piece of our business model. We are fortunate to participate in a category that is very responsive to investment. So as we look at our investment in advertising and consumer-related spend, our impressions will be up, so we look both at the dollars, but we are also trying to get seated more impact from the dollars we spend. And our impressions will be up comparably both in half two as they were in half one. So even though there was a little bit of shifting in dollars, our spending is definitely in line with what we had forecast for the year; in fact, it's up a bit. And we continue to feel good that what we're getting from that spending is even higher, based on the marketing mix modeling that we're doing. So we're always making trade-offs and balances as we manage the year in terms of where we think we can get the biggest bang for our buck. So we are committed to the dollars, but sometimes we will shift it if we see an opportunity or we have some innovation. We had some in Q2 that actually the ship timing pushed out a little bit further than we anticipated and, therefore, we needed to push out the advertising. So I wouldn't think about it as much as a pull-back of us consciously pulling back on spending, but more making sure that we're getting the most and aligning it to the activity that we have and the quality of copy, et cetera.

Thank you.

You're welcome.

Thank you. We'll take our next question from Alexia Howard. Please go ahead. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Good morning, everyone.

Good morning, Alexia.

Good morning, Alexia. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Okay. So, I guess my main question is you had a pretty hefty and clean beat this quarter versus expectations, yet you're not raising your formal guidance on the EPS range for the year. I know you're saying it's coming in at top-end. Is there anything that's getting tougher going forward than you expected, aside from the uncertainty around the store traffic here in the U.S.? Thank you very much.

Yeah. Alexia, I would say there's not any one big thing that we are trying to protect ourselves against. I actually think what we really want to do is make sure that we have the opportunity to invest into this marketplace. There are a lot of new capabilities. We're investing in e-commerce. We've mentioned before continued investments in activating some of the learnings from our demand landscape, work that we're doing around aisle reinvention, packaging updates, investing in emerging brands. So we're really looking at where those vectors upshift in evolution in the marketplace and how do we make sure that we are investing appropriately there and also still able to maintain all those critical investments in the core that drive our profit engine. So that's really what we're trying to do there.

The other thing I'd add to that, Michele and Alexia, is really what I'm pleased about is that we were able to hold our EPS guidance, given that we took our net sales guidance down. And that really reflects the company's good cost discipline, which is allowing us both to maintain that as well as invest even more in the second half than we planned to.

I agree. The other thing, Alexia, just as a data point I should point out, ERP is another big investment. And as we look at our investments there, we'll actually be spending twice as much in the second half, behind ERP, as we have in the first half and that's meaningful. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Great. Thank you very much. I'll pass it on.

Thank you.

We'll take our next question from Jason English with Goldman Sachs. Jason English - Goldman Sachs & Co.: Hey, good morning, folks. Thank you for the question.

Good morning. Jason English - Goldman Sachs & Co.: Congratulations on a solid first half.

Thank you. Jason English - Goldman Sachs & Co.: One thing you highlighted, however, that's concerning is just the ongoing softer-than-expected category growth rates. You also mentioned e-comm, the impulsivity of the category, presumably, ongoing shift to e-comm threatens traffic; maybe it threatens the category with that impulsivity. So in context of the realities of slower category growth and maybe some risk on the forward, I'm surprised that we haven't heard you talk about your strategic focus on diversification to other snacks. So can you shed a little bit more light on where you're going? I know there's chatter or news out there on expansion into ready-to-eat popcorn. Could you just touch on some of the initiatives, whether or not there's a heightened sense of urgency in context to category, and what it means both from an organic and inorganic strategic direction?

Absolutely. So let me start with, first of all, we feel really good about this category and, particularly, about chocolate if you look at the chocolate takeaway numbers that were delivered this year, because the category softness was primarily driven by gum and mint. And, as you know, chocolate is the biggest piece of the category. The way that we think about the business is we need to win with growing customers. Our goal is always to outperform the marketplace and to gain market share, so that if there is softness, we get even more of our growth from market share gains. And we're heavily focused on that because it's our profit engine. At the same time I would tell you, I think about this marketplace as a time where we have a great core business that we're going to continue to drive. And at the same time, we have some opportunities to evolve, to evolve our product and brand portfolio and also to evolve our channel mix to adapt to the changing marketplace. Snacks is important in our strategic agenda. And the way that I think about it is we are a large player in snacks by being number one in the biggest category within snacks. What we now want to do is expand our portfolio so that we can participate in even more snack occasions and ensure that we have the right portfolio and channel development to maximize those opportunities. So I would say it is important. You will see us both doing snacking innovation and also continuing to evaluate and consider M&A as a lever in that growth agenda as well. Our snacking demand landscape that we completed really helps us to lay out and see the future opportunity, both for confection and for snacks to make sure that we're building our portfolio incrementally. Jason English - Goldman Sachs & Co.: Okay. Thank you. I'll pass it on.

We'll take our next question from John Baumgartner. Please go ahead.

Thanks for the question. Good morning.

Hi, John.

Hi, John.

Michele, just to continue with the snacking discussion, in the first half in North America, there was a 60 basis point differential in your retail takeaway between the total portfolio and then just the CMG business, which grew faster. So can you speak a bit to some of the performances and observations at KRAVE and barkTHINS in terms of just distribution and competition?

Sure, absolutely. So first of all, we feel great about our core brand CMG performance. As you know, that's really the stable part of our portfolio that is really our profit engine, so feel great about that. As I look at the remainder of our portfolio, I'd say that we saw some pressure in two areas. First of all, baking chips and syrups were softer than anticipated, in line with, I think, what we're seeing in center of the store categories. And then, as we go and look at our portfolio of smaller emerging brands, I would say it's a little bit of a mixed bag. We're really pleased with how barkTHINS is doing. And as we look at some of the rest of the pieces of the portfolio, we've learned a lot since we made the Brookside and KRAVE acquisitions and we're trying to leverage that learning along the way. So we've had to right-size distribution on some of those brands where we think we overextended both the distribution and perhaps the portfolio a bit. So we're really self-correcting on that. And we're applying learnings to make us even more stronger in the marketplace. I would view this piece of the portfolio as one that we expect growth from, but I think it's going to be a little bit lumpier and inconsistent as we leverage big learnings and expand along the way. As part of that snacks portfolio, I would add we feel really good about Snack Mix and those products that we've put in the marketplace, as they've demonstrated a lot of stability and pretty strong growth.

Great. Thanks, Michele.

Sure.

We'll take our next question from David Driscoll. Please go ahead.

Great. Thank you and good morning.

Hi, David.

Hi, David.

I had probably just two questions that I wanted to ask. A follow-up here on the sales, so in the most recent Nielsen data, the last two quad weeks, either a month ago, it was up 0.6% and the most recent data, up 2.2%. So it actually looked like things were getting better. So maybe I'm a little surprised that you're thinking net sales will be flat in the back half. And then maybe when you just talk about that a little bit, the strength in this recent Nielsen data and why it does suggest that things flatten out. Can you quantify the impact of the inventory build? And then to Patricia, can you talk about the margins a little bit? I think operating margin's up 210 basis points in the first half. And I think the implied margin would be down 100 basis points to kind of reconcile with where your guidance is. That feels pretty negative, given your comments on Margin for Growth and the very flat commodity environment that we're seeing. Maybe a little bit more discussion on that would be helpful to understand the impacts.

Thanks, David. And I appreciate the question and your perspective on that. If we look at the 12-week period ended July 15, it's a little more flattish. So while I'm really encouraged by the past several weeks, if I look at the two quad periods earlier, the marketplace was much softer. So I think what we're seeing this year is a lot of volatility. It's difficult to predict the market. And I certainly am optimistic that those recent trends continue, but I would say that they do include the July 4th holiday period. And I think we've seen a bit more stability during some of those periods, where there is an anchor season where somebody's coming into the store to make their purchase, but really I'd say it's about volatility. First part of the year, we saw some months that were up, we saw some down. And we're trying to do our best to project what we think that will look like as we go into the second part of the year.

And this is Patricia, David. You asked about the retail inventory. And, yes, that was a factor in our second quarter. So we really wanted to have a lot of transparency around that. We did some pipeline build against new packaging. And we accommodated some of our retail customers who had some changes in their own distribution network. And it was very important to us to meet their service needs so that they could get product on the shelf in a good execution way. And so when you look at our takeaway, you can see that we need to normalize that retail build over the second half of the year. And so we still believe that retail takeaway will improve in the second half, but from a net sales perspective, we know that we've got to work through that inventory. In terms of the gross profit that you commented on, that sales pattern also shows up in the gross profit. So to the extent that we had higher sales in the first half of the year, that had better fixed cost absorption and that will come out again in second half of the year as those sales normalize through. The other thing that we had in gross profit is as we have reduced our overall full-year sales guidance, obviously, that has a mix impact when you look at the mix of products that we think are most hit by the weaker retail trend. And then finally, we do have some changes in packaging coming, both on the shelf and as we work with our retail partners for packaging that works in their format. And that's also a bit of a headwind for us in our gross margin in the second half of the year.

And, Patricia, just to follow-up, is there any way that you could quantify that retail inventory build, just because it sounds like we should take it out of the third quarter, but I don't think I heard you say the magnitude of it?

We didn't put the dollar amount out there, but what I'd say, David, is what we want to do every year is make sure that our net sales and our retail takeaway are in line together. So if you look at our overall sales, assume that that's our retail takeaway, and I think you can pretty easily normalize out that inventory build.

By the end of the year, we would say they'd be aligned.

Thank you.

We'll take our next question from Jonathan Feeney. Please go ahead.

Thank you so much. So I guess following up on Dave's questions, I want to make sure I have these numbers right. I think you told us year-to-date U.S. retail CMG takeaway was 1.4%. And I think that maps to the 4% number you gave us for the second quarter in the release. Correct me if I'm wrong about that. So, a couple of questions here; first, am I right that means Q1 was down 1.2% on net retail takeaway or something like that? I know there is seasonality between Q1 and Q2. And secondly, Patricia mentioned Q2 takeaway was disappointing. Can you give us a sense what you had been expecting for Q2 takeaway? And then related to that, like what kind of takeaway would you expect? Is this just continued 1.4%-ish takeaway in the second half for the U.S., are you expecting with this flat sales guidance? Thank you.

Sure. So let me start with the first part of your question, which is total Hershey takeaway was up 1.4%. Hershey CMG takeaway year-to-date was up 2.0%.

Okay.

So our CMG performance outpaced the total. And that was really as a result of...

The grocery stock.

The grocery stock primarily that was a bit of a drag on the total number. And then as we look at the takeaway on a full-year basis, as Patricia said, we're looking for by end of year, net sales and takeaway to be relatively in line with each other. And we're anticipating net sales to be around that 1% range. So that can help to give you a guide of the range of where we think that takeaway may come in.

Yeah. And, Jon, it's typically pretty much, well, they're relatively the same every year. So if you go back to our April guidance, around 2% would've meant around 2% retail takeaway as well.

That's helpful. I guess I'm just trying to understand where the disappointment came in and its order of magnitude on takeaway.

Yeah. And I'd say a lot of that was around everyday post-Easter was a bit softer than we anticipated.

Gotcha. Thank you very much.

Okay.

We'll take our next question from Ken Goldman. Please go ahead.

Hi, good morning.

Hi, Ken.

Question, Patricia, your guidance remains, I think, for input costs to still just not be a headwind for the year, but they were a tailwind in 2Q. And it's obviously impossible to know from our end, but at least from our basic math, it doesn't seem like that tailwind gets any less strong in the back half of the year. So I'm just curious. Is there anything we should be aware of that might be more of a headwind in the back half of the year or do you expect similar trends to maybe what you saw in 2Q in terms of just that input cost tailwind?

Yeah. They were a little bit better in the second quarter. And we expect that to flow through to the full year, but not get better. It's really the drivers that I mentioned earlier around because of the change in sales between the first half and the second half, you've got some fixed cost volume absorption. You've got that mix impact I mentioned. And some increased costs coming through on the packaging. And that's really what's, you know, when you look at that against where we came in in the second quarter, that's where some of that comes out.

Okay. Thank you for that. And then a follow-up, Cookie Layer Crunch, you talked, I think, last quarter, about the real question – and I think this is true for all new products, right, is where repeat purchases are going to be. Can you help us understand where they have come in versus your expectation? And the reason I'm asking is, at least in Nielsen data, which I know is not always precise when it comes to new products, but what we're seeing is the max ACV, the weighted average ACV, they both peaked a few months ago and have trailed off a little bit since. So I just wanted to get a better sense from you guys what you're really seeing with that brand and how happy you still are with it.

So we're very pleased with Cookie Layer Crunch performance. Trial and repeat are exactly in line with our expectations. And so we feel great about that, especially in a world and a marketplace where there are a lot of other big innovations in the category this year as well. So we particularly feel well that we hit those goals despite that. So we continue to be bullish on the initiative, as well as on some of the other innovation like Crunchers and some of the recent innovation that is out there.

Great. Thank you.

We'll take our next question from David Palmer. Please go ahead.

Thanks. Good morning. First, a follow-up on the acquisition comment you made, I think it was Jason's question. Are you looking across all snacking as fair game? I ask because, at times, Hershey has ventured into other aisles and has done perhaps a little less well. And you seem to be signaling a little bit of a closer-in approach with that term snackfection, where, seemingly, you're trying to leverage a little bit more of the core with what you extend into. Any comment there would be helpful. And I have a follow-up.

Sure. So we really are looking across the snacking landscape. We have identified a couple key areas that we have the most interest in that, for competitive reasons, I won't go into the details on. I will say when we think about that, that we do think about how we can get scale wherever we're going to make an acquisition, either by buying something that's large enough to give us scale or by either looking at a section of the store we can get scale, or a category segment where we can get scale to ensure that we get the benefits of having a profitable business and the organization's focused in one spot. So I'd say we're looking across, but we have distinct areas of focus within.

And just to follow-up also on your comments in the prepared remarks, you seem to be calling out a need for at least a subtle repositioning or a revived focus on the core in some way. You said something about insights work you're doing and stay tuned. Is that a comment about everyday non-seasonal chocolate? And maybe you can give us a hint as to what sort of general opportunity exists for improvement and the timing of any tactical changes you can make there. Thanks.

Sure. I mean, what the snacking demand landscape really gives us is an even deeper view of where each of our brands plays and where there is opportunity to sharpen our positioning to capture new usage occasions or to be more relevant to new users and also to take our portfolio and appropriately spread it to cover the landscape to minimize any overlap. And so what you'll see on some of our brands – we recently started investing in Twizzlers and PayDay. And we're leveraging some of the landscape insight in the messaging and in the media strategy. And we're actually seeing some really nice results. And across many of our brands, we're seeing some of that sharpening focus. So, I'd say in terms of timing of when you would see that, I think you would start to see it like on the Twizzlers and the PayDay, for example, right now. I think on some of the bigger brands, we should see some benefit from that, I'm going to say, mid to perhaps late into next year, maybe around mid-year next year perhaps. Is that helpful?

Yeah. Thank you.

We'll take our next question from Robert Moskow. Please go ahead. Robert Moskow - Credit Suisse Securities (USA) LLC: Hi, thank you. Michele, I think I thought I heard a bit of a change of tone today regarding the sense of urgency to get bigger in e-commerce. You mentioned click-and-collect and also with pure-play e-commerce providers. And I think what I hear from investors about their biggest concern on Hershey and other confection companies, is that just the number of cash registers, the number of opportunities for impulse purchases are now structurally declining. So have you decided internally to kind of shift more of your resources towards that e-commerce effort? And is that part of what you're kind of signaling today? And maybe give me a little bit about what they're thinking about doing to duplicate that impulse occasion online?

Sure. So I would start with the fact we're encouraged that as we look at our business this year, we had pretty strong performance across impulse and our take-home business. So despite that accelerated shift in e-comm, we've still been able with our retail sales force and the power we have in store, to capture and grow that piece of the portfolio. And innovations played a key role in that as well. That said, I think it is fair to say that we are dialing up. We've been focused on e-commerce, but we are doubling-down a bit more than we had in the past with the dedicated team, our reinvestment of additional resources and really partnering closely with our customers. One of the biggest changes I've seen in the marketplace is a lot of our bricks-and-mortar partners are now really dialing up their efforts on omni-channel, both click-and-collect and multiple forms of home delivery. And then, of course, there are the pure-plays out there. So I guess I think about that business in two ways. One, I think that we have an opportunity to say how do we capture the planned nature of how consumers purchase in that channel and dial that up and really capture that on our business. And at the same time, several of our retail partners have come to us and asked us to partner with them in terms of figuring out how to optimize impulse in an e-commerce world. I can't tell you I have the answer to that right now, but I can tell you I think we are in a good position to really be partnering with our retailers on that. Robert Moskow - Credit Suisse Securities (USA) LLC: Okay, great. Thank you.

We'll take our next question from Steven Strycula. Please go ahead.

Good morning.

Good morning.

Hi, Steve.

Two questions; the first would be on gross margins, just to follow-up on Ken's questions. Can you help us unpack a little bit of some of the tailwinds or headwinds in the back half of the year? It just seems like the full-year guidance is conservative where you're tracking year-to-date. Can you talk about the mix comments you were discussing, whether that's channel mix are more product mix and elaborate a little bit more on the packaging investments that you're making? That'd be helpful.

Sure. Thanks for the question. So I think it helps to just stand back and say that whenever we're going to reduce our overall net sales outlook, it's going to have an impact on our gross margin, both because we're going to have fewer products to absorb our fixed costs and also because as sales come out, those are typically are very high margin, best mix product. And that's just a natural impact. So first of all, that's the pressure down. In addition to that, this year, especially in the second half of the year, we are making changes to some of our packaging, both as the way that the consumer will see it, and also the way the retailer will handle it in store. And that has some cost as well. So those are the headwinds that we have on a full-year basis. You do see this sort of first half, second half dynamic, driven by the change in sales profile between the two halves of the year. I think the fact that in that lower sales world, we were able to hold our gross margin – overall margin's actually a positive story. It shows that we do have slightly lower input costs and also that our productivity is very strong in that area.

That's really helpful. And then two quick modeling housekeeping questions, the $60 million other income that you were speaking about, that I think was ratcheted up about $5 million for this year, is it fair to model that $60 million going forward or is it just kind of that one-time extra $5 million is a bump this year versus forward years?

Great question. We want to have a sustainable tax rate. So we look each year at investment tax credit opportunities. I think that that's as good a forecast as I would have right now for next year is, again, because we're looking at a sustainable tax rate.

Got it. And given the mechanics of what you said for the third quarter gross margin, the volume deleverage because of the timing of the shift, does that mean that EPS on a year-over-year basis is more pressured in third quarter versus fourth quarter or are they pretty comparable on a year-over-year basis? Thank you.

They'll come in the way they do, depending on the pattern of our sales. And we're really not giving that level of quarterly guidance. I'd just think about it right now as a second half impact.

All right. Thank you.

We'll take our next question from Chris Growe. Please go ahead. Your line's open. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Hi, good morning.

Hi, Chris.

Good morning. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Hi. I just had a question for you, if I could, on when I look at the stronger gross margin performance and the lower SM&A in this quarter, it's not clear to me that you are investing. You've talked about investments in go-to-market capabilities. Is that inherent in these stronger performances? And then, I'm just trying to understand going forward then, is that also part of the pressure, if you will, on the second half performance of the business?

Yes. I think that's a great question. Thanks for the question. We talked about the amount of savings that we wanted to deliver through our Margin for Growth Program. That's coming in a little higher than we expected. And that's given us the opportunity to both maintain our bottom line as well as incrementally invest in the second half of the year on a couple of things: first, against advertising and related marketing spend that Michele talked about; second, about the capabilities that we talked about in the first part of the remarks. So when Michele's talking about things like unlocking the demand landscape, using analytics against our consumer or growing our e-commerce capabilities, those are investments that we're making. So we are ramping up those capabilities in the second half of the year. And then finally, as Michele mentioned, we do have a new ERP system going in. And that spending is also starting to really ramp up in our SG&A in the second half of the year. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Okay. And thanks for that color. And just a quick question for you on China, it's becoming a smaller and smaller part of the business. Much of this quarter looks like it was self-inflicted. Is that sort of decline rate going to continue? Are you rationalizing SKUs to a point that we've got to lap this, if you will, over the next year?

Yeah. I think that's a good way to think about it. As you know, we've put a real focus on rightsizing and rationalizing our China business. It's one of the first pieces of the Margin for Growth area that we focused on and where we'll see some of the early wins. We are seeing those wins. And inherent in that is a lot of moving parts, including looking at the SKUs and making sure that we're going to market with productive and profitable SKUs. It means rationalizing where we participate in the markets in terms of channel mix as well as geography. And so all of that is having a planned impact on our overall sales and we knew that would happen, but it's resulting in a more healthy business and that was our goal. And we're very pleased with that. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Yeah, okay. Thanks a lot.

Operator, we have time for one last question.

Thank you. And we'll take that question from Matthew Grainger. Please go ahead. Your line's open. Matthew C. Grainger - Morgan Stanley & Co. LLC: Great. Thanks, everybody. If I could just ask two quick follow-ups; first, I just wanted to ask about the seasonal outlook for the second half of the year. You had extremely strong share trends in the first half during Easter season. So just curious how the discussions with retailers around second half holidays have been progressing, their level of excitement around the CMG category, specifically, and whether you expect similar or still sort of clearly positive share trends during the upcoming holidays. And then the second one, all the reinvestments you've talked about, the impact on second half margins, could you talk a little bit more about why you expect a pullback in International margins? And which investments are specifically focused in that segment?

Matthew, we feel good about the seasonal outlook in the back half of the year. We anticipate that we will grow business, our business, in both of those holidays. And as you know, we have very good visibility into what our retailers are purchasing in those holidays. Right now, I would say we are feeling good that we should gain share during the holidays in the back half of the year. And I'll turn it over to Patricia to answer the second part of your question.

Yeah. So great question and I think you made a good point, which is year-to-date, we are slightly positive in our International and Other segment. So when I say around breakeven, it would sort of encompass that. We do recognize that with a lot of moving parts going on in China, in particular, there are a certain amount of things that we want to protect against in that world. And so that's a little bit of my maybe conservatism on that piece of the business. We also mentioned some of the trends we think will be a little pressured in Brazil in the second half of the year as well. When you're this close to breakeven, we're talking about plus or minus pretty small numbers. Matthew C. Grainger - Morgan Stanley & Co. LLC: Okay. Great. Thank you.

Thank you very much for your time today. And the IR Group will be available for any follow-up questions you may have throughout the day.

Thank you.

And this will conclude today's program. Thanks for your participation. You may now disconnect.