Good day, ladies and gentlemen, and welcome to the Under Armour, Inc. First Quarter 2016 Earnings Conference Call and Webcast. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference is being recorded. I would now like to hand the meeting over to Tom Shaw, Director of Investor Relations. Please go ahead.

Thanks, and good morning to everyone joining us for today's first quarter conference call. During the course of this call we will be making projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution that such statements are subject to risk and uncertainties that could cause actual events or results to differ materially. These risk and uncertainties are described in our press release and in the risk factor section of our filings with the SEC. The company assumes no obligation to update forward-looking statements to reflect events, or circumstances after the date on which a statement is made, or to reflect the occurrence of unanticipated events. In addition, as required by Regulation G we need to make you aware that during the call we will reference certain non-GAAP financial information. We provide a reconciliation of non-GAAP financial information in the earnings release and in the electronic version of portions of the script from today's call. Both of which are available on our website at uabiz.com. Joining us on today's call will be Kevin Plank, Chairman and CEO; followed by Chip Molloy, our CFO, who will discuss the company's financial performance for the first quarter and provide an update to our 2016 outlook. After the prepared remarks, Kevin and Chip, along with our Senior Vice President of Corporate Finance, Dave Bergman, will be available for a Q&A session that will end at approximately 9:30 a.m. Finally, a replay of this teleconference will be available at our website at approximately 11:00 a.m. Eastern Time today. With that, I will turn it over to Kevin Plank. Kevin A. Plank - Chairman & Chief Executive Officer: Thank you, Tom, and good morning, everyone. Transformation – in 2016 the ability to adapt to the changing…

Thanks, Kevin. Before I begin, I want to quickly express my gratitude to the entire Under Armour team for this opportunity to be part of such a powerful growth story. Approaching 100 days in the role, I have been extremely impressed by the unwavering drive of this culture and the strength and depth of the team across the board. Now I'd like to turn our focus to the details of our first quarter 2016 financial results, followed by our updated outlook for the remainder of the year. Our revenues for the first quarter of 2016 increased 30% to $1.05 billion. On a currency-neutral basis, first quarter revenues increased 32%. While we are experiencing some changing dynamics among our domestic wholesale partner base, the increased diversity of our global channels and product lines continues to drive strong results. During the first quarter, our wholesale revenues grew 28% to $744 million. Our direct-to-consumer revenues grew 33% to $266 million holding steady year-over-year at approximately 25% of revenues in what has been our lowest quarter from a mix perspective the past two years. In direct-to-consumer, our store count at the end of the quarter included 198 company-owned stores globally, comprised of 162 Factory House stores and 36 Brand House stores. We also increased our total number of in-country websites to 26, with the opening of our site in Mexico. During the quarter, licensing revenues grew 15% to $19 million and Connected Fitness revenues grew 119% to $19 million. On the product category front, Apparel revenues increased 20% to $667 million compared to $555 million in the prior year's quarter, led by growth in training, golf and new innovation platforms such as Microthread and CoolSwitch. First-quarter Footwear revenues increased 64% to $264 million from $161 million in the prior year's quarter. The Curry Two…

Thank you. Our first question comes from the line of Camilo Lyon with Canaccord Annuity.

Thanks. Good morning, guys. Great quarter. Kevin A. Plank - Chairman & Chief Executive Officer: Thanks, Camilo.

Kevin, I wanted to get your thoughts on just the health of the North America wholesale channel. There's a lot of moving parts and some of your bigger customers have been shutting doors, some of the tertiary players are going away. Can you talk about the health of that channel and what that could lead to from the channel expansion opportunities and how do you think about segmentation, but within that strategy? Kevin A. Plank - Chairman & Chief Executive Officer: Yeah, thanks. So, it was obviously a tough quarter for some of our partners in sporting goods, as we saw Sports Authority and just recently Sport Chalet with some of the filings that have come out. And I guess, if there's anything as we think about our business, the good news is that we're not strictly a North American story anymore as this is a global company, and it's becoming more and more important to us as we'll be closing on 13% of our revenues and possibly north of that as we think about what the 2016 play will ultimately look like. But again, and I'm going to put this through the lens of Under Armour which is incredibly proud of what we've done, I mean, posting 30% growth in a quarter where one of our largest customers, one of our top two or three customers just a few years ago, filed for bankruptcy. I think putting that kind of number up is something that just continues to demonstrate the strength of the brand, and how strong our portfolio ultimately is. I want to reiterate as well is that, there is definitely the things that happen in these types of situations is that it separates sort of where the best are, and I want to be clear that we…

That's great. Thanks for the detail, Kevin, and then Chip, I just had one for you. If you could just disaggregate the composition of inventory between planned inventory increases and any sort of excesses that you have given the liquidations they had during the quarter? And coupled with the expectations for flat gross margins in Q2. So if you could just help us understand, it seems like we're shifting more towards that planned increase, if I'm reading that correctly, but just any detail there would be great?

Yeah, Camilo. It's great to meet you. Majority of the growth is planned. But we did have slightly excess, slightly higher percentage of total revenues was excess coming out of Q4 and continues to be this quarter relative to last quarter same time. But we are working through that. As you can see we worked through it through liquidation, we're continuing to manage through that, and as you can see through our guidance second quarter we're expecting our gross margins to be flat, and then flat for the year. So it'll start to creep away as we go through the year. So we're working through it, but the majority of it is planned.

Thanks a lot, guys. Great job, and good luck with the rest of the year. Kevin A. Plank - Chairman & Chief Executive Officer: Thanks, Camilo.

Thank you. And our next question comes from the line of Michael Binetti from UBS.

Hey. Good morning, guys. Congrats on a great quarter. Kevin A. Plank - Chairman & Chief Executive Officer: Thanks, Michael.

Hey, Michael.

Just real quick a housecleaning – housekeeping question. Just in very basic terms the operating income increased a little less than the revenue increase for the year, you – Chip, you commented on some of the investments you're looking at which we know you've always got going on in the background. But with the revenues going up a little more, did you guys pull forward some bigger projects that might have otherwise been earmarked for 2017? Or just dial up the marketing? Any comments there to help us with the model?

Hey, Michael. Yeah. This is Chip. We're – we did up our guidance for the full year on sales to 26% growth; that puts us well on our plan to get to our $7.5 billion goal that we set out last year for 2018, and that's a 25% CAGR. On the operating income, we are marching towards the operating income target as well, but we are going to find opportunities as we meet our annual targets. If there are opportunities to – for us to invest, whether it be in marketing or some of the other areas to keep the momentum and invest for the future, we're going to continue to do that.

So then if we could just talk about the drivers of the International margins in the quarter that was kind of an interesting standout. I think, there's a lot of noise that makes it kind of hard to forecast for us. Maybe we could get a little help. Do we see that level of year-over-year improvement in the International margins continue? And importantly, if we are set for better run rate, it seems like a good place to also ask is this something that could help us accelerate the tax rate improvement that has been a topic for a while with you guys?

Yeah, over time as we get scale the International margins are going to slowly, but surely improve. And as it relates to tax, as the income grows as a percentage of our total income we will see improvements in tax rates. It's coming slowly, but I think that will start to accelerate as we get into next year and beyond.

Michael, this is Dave also. Just a quick reminder too that the tax rate impact on those International investments is usually a little bit larger in Q1 and Q2, so you normally see our tax rate a little bit higher in Q1 and Q2, and then it subsides a little bit in the back half of the year. So just keep that in mind as well.

Okay. On a similar topic, is the – as you look at the gross margin guidance for the year could you help us understand the cadence of whether the current magnitude of product cost you're seeing is sustained or is that slow at some point through the year? And then the same question on currency, if it's stable at today's rates, when does the FX pressure on the gross margin perhaps start to roll off? Thanks, guys.

So we guided for flat for the full year. We were just down 100 basis points, so we guided flat for the second quarter. So obviously we'll start to see some improvements on the back half of the year. Our expectation will be slight in Q3 and it'll be a little bit more in Q4. And a lot of that the liquidation pressures would go away, the product margins improvements we've seen will be sustained, and FX will slightly improve.

Thanks a lot, guys. Kevin A. Plank - Chairman & Chief Executive Officer: Thank you. Michael.

Thank you. And our next question comes from the line of Eric Tracy from Brean Capital.

Thanks, guys. And I'll add my congrats. Kevin A. Plank - Chairman & Chief Executive Officer: Thank you.

I guess, as we think about the growth coming from Footwear and International, could you maybe speak to organizationally the resources, be it people, infrastructure to support that kind of, updates on the supply chain that you feel like if it's in place to support? And then sort of secondarily on that as it relates to the SAP implementation, how that's going? Kevin A. Plank - Chairman & Chief Executive Officer: Let me start at the top and let me just use Footwear as an example, and then let me let Chip and Dave weigh in on what's happening with SAP. But Footwear for us, it's interesting because becoming a Footwear brand is not something that just happens overnight and for us obviously it's taken a while, we've been making shoes since 2003, we've been selling them since 2006, so we sit here in what you call our 10th year in business, it's just it's a long road, it's a long tough slog too, but I think we're incredibly proud, A, of the progress; but more importantly, where we are at the moment of time, the ability for us to stand up and declare ourselves a Footwear brand. One thing that – I think the 64% growth that we've demonstrated in the quarter, it demonstrates the diversity that we have as a brand today across Footwear. And again, we are to be clear, driving massive growth, and we are taking share. I think there's been some – we just want to be clear like we are a premium Footwear brand, we're a premium Footwear brand that's driving ASPs meaningfully higher as we build out our team and drive innovation across all of our categories. Again, just in the quarter alone we saw ASPs up in the high single digits just…

That's great. If I could switch gears to Connected Fitness. Obviously it seems like the wearable side, HealthBox, the early read is extremely strong. Maybe just talk about any updates, the $200 million rev target you laid out for that Connected Fitness business directly? And then secondarily, kind of the halo effect of selling more shirts than (52:11) shoes. Any sort of update on how you're seeing that monetization of the core business? Thanks. Kevin A. Plank - Chairman & Chief Executive Officer: So, first of all, we've made this statement recently, and I really love it. I think it just – it describes what we've been trying to put together with Connected Fitness. And it's this idea, is that data is the new oil. Like those who have the data, those who have the understanding of the consumer, we believe are the ones that are going to win. And for us, laying out, now having a Connected Fitness community of over 160 million with adding well over 100,000 new registrants every single day that are volunteering information to us, like how much they slept, how active they are, what they did when they exercised, how hard they exercise. And they're doing things like using our gear tracker up to the tune of a million people that are asking us to tell them when they should buy a new shoe by evaluating the type of terrain they are running on and the distance they're running on. The information we're getting is extraordinary. But frankly, we're still – we're in the first inning of what's happening in this world. But what we do have is we have the ability to use data. And a key initiative for Under Armour Connected Fitness, and I want to be clear, is that we're going…

That's great. Thanks for all the detail. All the best, guys. Kevin A. Plank - Chairman & Chief Executive Officer: Thanks.

Thank you. And our next question comes from the line of Omar Saad from Evercore ISI.

Hey, guys. Great quarter. Thanks for taking my question. Kevin A. Plank - Chairman & Chief Executive Officer: Thanks, Omar.

I wanted to follow-up on the Connected Fitness, Kevin, to make sure we understand when you say in the first quarter you matched revenue versus – in the first quarter versus all of 2015, is that people going to the Under Armour website through the Connected Fitness platform? Help me understand exactly what that dynamic means and how it's working? Kevin A. Plank - Chairman & Chief Executive Officer: We mean subscription numbers and as we're driving, developing and building retail there as well right now. So, it – I mean, again, the growth has been consistent, so I think, we – where we are right now is really thinking about user engagement and really making sure that while we have a big number, we're over 60 million active monthly users right now that we have on the platform, and something which is a big, big opportunity for us, so – and as well as, you're right, Omar, we are driving consumers so we're matching what happened in 2015, where we've been testing everything, bringing the right amount of math of driving consumers through e-commerce to drive ultimately selling more shirts and shoes. Again, we were really clear is that the ultimate goal that we had here is that while Connected Fitness and again, if I said there was – as we bought these apps, what they didn't have before, is while they had a great product for the consumer they had no way to monetize that product, and so by combining Under Armour who's in the physical fitness space and sells shirts and shoes, it really allowed us that we had the vehicle of, I use the analogy of the purpose of a brand is that we bring people to the amusement park and we put them on the roller coaster and they go up in the air and they get excited, when they come off, they go to the loop-the-loop, and they want to engage somehow, they didn't have a way to do that other than to see their day-to-day track. With us we have the ability to drive them through the gift shop, and with that they – hopefully we'll them – have and help them buy lots and lots of Under Armour shirts and shoes.

Okay. That's helpful. And then I also wanted to ask, you alluded to before the points of distribution in North America 10, 000 or 15,000 points of distribution gap between Under Armour and other brands. With DTC over 30% on the business and growing really nicely especially the e-commerce piece, higher price points you talked a lot about the new shoes coming this year, next year, more and more products at higher price points. How do you think about that kind of incremental distribution in North America, especially in lower tiers or mid-tiers of distribution? Is that something that's part of the conversation potentially over time and really requires some thought and segmentation? Or maybe help me understand how you think about segmenting the brand at those points of distribution. Are you happy with where you are with DTC and e-commerce, and your existing distribution? You maybe don't need with the opportunities internationally in Footwear and women's and youth you don't need those... Kevin A. Plank - Chairman & Chief Executive Officer: Got it.

profiles and things (58:40). Kevin A. Plank - Chairman & Chief Executive Officer: Got it. So I think that what you're going to see from us is that where we've been investing in segmentation, we've been investing in merchandising that it's going to leave us the opportunity to make the best decision for the brand. Plain and simple as that we think that there are – we think there's opportunities, we think there's moments where consumers walk into retail, and frankly they don't have an option to purchase Under Armour. And so while no hard decisions have been made now I want you to know is that our job and our goal has been to put ourselves in a position to make those decisions when the time is right and appropriate. And so merchandising, as I said is that identifying in 2014, building the team in 2015, perfecting it in 2016, and really being able to hit on all cylinders in 2017 is the way that we're thinking about what we're going to do. I mean, driving right product, right place, right time is the message we have there, and I – you've heard how much and a fan I am of Kevin Eskridge who runs our merchandising group for us, and how highly we think of him, and frankly because he's had the experience of having run and built China for us, and now having him back here, again, but it's not one person probably the best asset he has, which is the number one required in Under Armour is he's done a great job building an expert team. And so, we didn't have a merchandising team two years ago. I mean, we had merchandising throughout the building, but we didn't really have a specific merchandising team, so being prescriptive with product flow, key items being reinforced with new item styles, colors and making sure there's a differentiation. I mean, right now, we've got the channels of sporting goods, the mall, department stores, as well as our own distribution and then possibly broader distribution as we think about it. So, again, at Under Armour, we really, we say the only thing that gets you fired at Under Armour is someone says, that's the way we've always done it. And so we do believe we're different company every six months, and we'll continue to make those – make the best decisions that allow us to meet consumers where they are and we think that merchandising segmentation is going to be a critical tool for us in our toolbox as we move forward.

Thanks. That's perfect.

And operator, that's all the time we had today. So I want to thank everyone for joining us on the call and we look forward to reporting to you our second quarter 2016 results which tentatively have been scheduled for Tuesday, July 26, at 8:30 a.m. Eastern Time. Thanks again, and goodbye.