Good day and welcome to the VF Corporation Fourth Quarter 2015 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Lance Allega, VP of IR. Please go ahead.

Thank you, operator, and good morning, everyone. Thanks for joining us today to discuss VF's Fourth Quarter 2015 Results. I'd like to remind everyone that participants on the call will make forward-looking statements. These statements are based on current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in documents filed regularly with the SEC. I'd also like to remind everyone that unless otherwise noted, amounts that our participants refer to on today's call will predominantly be in currency-neutral terms. By our definition, which is detailed in our press release issued at 6:55 AM Eastern this morning, currency-neutral amounts exclude both the impact of translating foreign currencies into U.S. dollars and the impact of currency rate changes on foreign currency denominated transactions. You may also hear us refer to reported amounts which are in accordance to U.S. GAAP and include translation and transactional impacts from foreign currency exchange rates. We've chosen these currency-neutral amounts as a lead number in our discussions because we feel it more accurately represents the true operational performance and underlying results of our businesses and brands. Reconciliations of GAAP measures to currency-neutral amounts can be found in the supplemental financial information included with the press release, which identify and quantify all excluded items. Joining us on today's call will be VF's Chairman and CEO, Eric Wiseman; President and COO, Steve Rendle; our CFO, Scott Roe; and VF Executives, Karl Heinz Salzburger and Scott Baxter. Following our prepared remarks, we'll open the call for questions and ask that you please limit yourself to two questions per caller. Thanks. Eric? Eric C. Wiseman - Chairman & Chief Executive Officer: Thank you, Lance. Good morning, everyone, and thank you for joining us to recap the…

Thank you. And we'll go first to Omar Saad with Evercore ISI.

So, I wanted to ask you, and as far as I can remember, I can't remember a quarter where what you guided to ended up being so different than what you reported and what you experienced. So I'm just trying to get an understanding of where the biggest changes were post-October when you gave us the most recent guidance. Also want to understand a little bit deeper where you think the implied guidance for 2016 in the second half revenue is to really reaccelerate on a constant-currency basis. And then, lastly, on the question of revenues, did you see anything in the quarter post the October timeframe between the lines that gave you any indication or insight into what's really going on with the consumer, whether it's macro or behavioral changes, et cetera? Thanks. Eric C. Wiseman - Chairman & Chief Executive Officer: Sure. Omar, it's Eric. I'll start trying to tackle your questions. So, where was the biggest – well, what caused the big miss, and you're right, we haven't had change like that to our expectations happen before to that degree of magnitude. As you know from looking at all the retailers who are reporting, there was a significant slowdown in consumer spending from what everyone expected in the fourth quarter. So that hit everybody in all categories. It particularly hit cold weather apparel and footwear, and that's a big piece of our business. So we were unusually impacted by it, and we came out of it with only 9% more inventory. And the implications of that were we understand the carrying that inventory was probably not the right thing to do, so we aggressively got rid of it and that affected our earnings. That was a big driver of the earnings miss, was the investment we made…

Thanks. Good luck. Eric C. Wiseman - Chairman & Chief Executive Officer: Thanks, Omar.

And we'll go next to Bob Drbul with Nomura.

Hi. Good morning. Steven E. Rendle - President, Chief Operating Officer & Director: Hey, Bob. Eric C. Wiseman - Chairman & Chief Executive Officer: Good morning, Bob.

I guess, on the Outdoor coalition, I think given your guidance in terms of all the points you just made in terms of the second half, are the order books complete or how far are they complete in terms of The North Face as you look for fall next year? And when you talk about looking at the portfolio and actively exploring business expansion, and you also talked a little bit more about less exposure, Eric, when you think about it, is it more likely to have disposals or an acquisition, like how do you think about exactly what we should take away from that statement? Steven E. Rendle - President, Chief Operating Officer & Director: Hey, Bob. I'll take the order book question you had for the Outdoor coalition and then I'll toss it back to Eric on the portfolio. I would tell you, the Outdoor coalition, our order books are certainly on our hands for spring and they're reflected in our guidance. But it's too early for us to tip our hat on fall. I would tell you we are looking at cautious consumer or retailer behavior, but we're no more confident than ever on the quality of the product and our ability to react to the trends that we saw coming through Q4. Our Vans business remains extremely strong, and North Face and Timberland both have great strategies in place to react. Eric C. Wiseman - Chairman & Chief Executive Officer: On the shape of the portfolio, Bob, the – I'm obviously not going to disclose anything specific in this – on this call today. But know that as we look back over the last four years, because we – people have said, you haven't made an acquisition in four years and, we quite frankly, haven't made a divestiture in four years or five years either. So – and you talked about being active portfolio managers, so how do you define active? And what we're saying now is we're defining active as being active. And I think the fair and honest assessment of the last four years is when we acquired Timberland, for the next two years, we were not in the acquisition market, period, flat out, we were not. We were very focused on delivering the shareholder returns that we promised to our shareholders with the biggest acquisition we ever made, and we've done that. But for the last two years, we've not made an acquisition. We are actively exploring everything in our portfolio and everything that we might want to have in our portfolio with a level of activity that hasn't existed for the last few years, and we think it's likely something will change this year. I can't give you any more guidance about how that change might happen.

Got it. And when we look at some of the more challenged pieces of the business, I guess, in the fourth quarter but throughout last year, when you look at your assumptions going forward, do you believe that you're being conservative enough in terms of – whether in some portions of the workwear business or the Sportswear business or the Contemporary businesses? Steven E. Rendle - President, Chief Operating Officer & Director: Yeah, Bob, I think I'll take that. I think we feel confident in our ability to understand where we are. In the case of some of these sectors, for example, the Contemporary, we continue to be disappointed in the trends going on there, but could not be more confident in the teams that we have as we maintain our number one share, though perhaps that's not as important as it was in the past as that sector's under great pressure. Workwear, we've got, by far, two of the strongest brands, Bulwark and Red Kap, and teams that deeply understand their marketplace. And the business development teams really focus on expanding beyond the sectors that we win in when some of those commodities are moving our direction. So I would say we have confidence in our plan, extreme confidence in our teams that are in place to deliver those. Eric C. Wiseman - Chairman & Chief Executive Officer: Yeah, Bob, I'll lean into that just a little bit. Of all those things that Steve just mentioned, the one that drives the most earnings potential for us is the workwear business, which is really on its heels right now. We've been through this cycle at least a half a dozen times in the last 20 years where for macroeconomic reasons or things like the oil industry shutting down that's happening right now, we get hurt and then – that happens pretty quickly. And then it comes back. And when it comes back, there's years of goodness. You'll recall because we talked about it in 2010 and 2011. Bulwark was our fastest-growing brand. And it's really a good thing for our shareholders when the recovery happens and we know it's inevitable, we're not planning on it next year.

Okay. Great. Thank you very much.

And we will go next to Kate McShane with Citi. Eric C. Wiseman - Chairman & Chief Executive Officer: Kate, are you there? We can't hear you. Might be muted.

Kate, please check your phone line. I'm not hearing a response. We will go next to Laurent Vasilescu with Macquarie. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Good morning, and thanks for taking my questions. I wanted to follow up on the high single-digit guidance for Outdoor & Action Sports. Can you parse out ASP growth versus unit growth? Should we assume three percentage points for ASPs? And if that's the case, how has it changed over the prior years? And what are you seeing in terms of ASPs with regards to the competitive landscape? Eric C. Wiseman - Chairman & Chief Executive Officer: I will start and maybe, Steve, chime in. So, as a general statement, we don't quote specific percentages on what our price increases are, but we've said that's a big part of our model. And that would be true in Outdoor & Action Sports, right? We price both like-for-like and probably even more importantly, bringing new product. Remember, every season, more than half of our product is new and we are merchandising the new price points. And that's how we've maintained our margins. So, you saw it in our guidance as you look forward. We've got 70 basis points of price and rate improvement, which would be the proof point that, that model is intact, and indeed, we are seeing those prices come through. Steven E. Rendle - President, Chief Operating Officer & Director: Yeah, I wouldn't have much to add to that, Laurent, other than our team has spent a tremendous amount of time looking at consumer and market analytics to guide their seasonal product creation strategies, and really targeting price value relationships in each of those categories across the globe, each and every region. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Okay. Great. And…

And we'll go next to Matthew Boss with JPMorgan

Hey, good morning. So, I guess my question, as we think about the 11% constant currency EPS forecast for this year versus the 13% multiyear target CAGR that you have out there, a number of headwinds, you clearly walked through them for this year. But is there any reason to think the 13% needs to change in 2017 and beyond? And then separately, your 16% EBIT margin target, while we might not get there in 2017, is there any reason to think that this is no longer the goal of multiyear? Eric C. Wiseman - Chairman & Chief Executive Officer: Hey, Matthew, the answers are no and no. And we still have line of sight. We obviously – when we made our original plan, we said at that time that we weren't assuming any change in currency translation to affect the plan, and we've had a boatload of that happen to us. But we are on track to hit our numbers, we believe, and don't think that – on a currency neutral basis. I'm glad we have the 53rd week story behind us now, because that just complicated the discussion for all of us. But we're pretty confident in the growth rates in the top and bottom line that we're going to be able to achieve. We missed the top line. We're a little light there. We didn't anticipate some of the challenges that have happened around the world, but on an EPS basis, we're tracking right on plan. Scott, do you want to add anything to that from a profitability basis? Scott A. Roe - Chief Financial Officer & Vice President: Yeah, I guess two things. I think the best evidence of the future is what you have done, right? So as Eric said in his comments, we've averaged 13% over the last three years, and we're a little slower in the top line for all the reasons we talked about today. That is a short-term bump, that's not long term. And really, what gives me confidence looking forward is the model, right? That gross margin expansion that we talked about, the levers that we have from an efficiency standpoint and the powerful brands. I see no reason why we don't go back to that over the long term. It doesn't change anything.

Just a quick follow-up. On the gross margin guide for 2016, the 120 basis point constant currency expansion that you're embedding there ex-FX... Scott A. Roe - Chief Financial Officer & Vice President: Right.

...could you just help walk through what you're seeing from a product cost and a pricing perspective embedded within that? Eric C. Wiseman - Chairman & Chief Executive Officer: Yeah, we're really not breaking that down. Again, it's 70 basis points. It's kind of simple if you think about your margin going forward, right? You got 70 basis points negative currency headwinds, you got 70 basis points positive on price and cost, and then you got the 50 basis points of mix falling through, and that's really – your margin is 50 basis points plus the 70 basis points, gets you the 120 basis points that you referenced. So we're not breaking it down, but again, as I mentioned earlier, be assured that pricing is a big part of our model and we're pulling that lever along with merchandising to maintain our margins.

Okay. Great. Best of luck.

And we'll go next to Kate McShane with Citi.

Hi. Can you hear me this time? Steven E. Rendle - President, Chief Operating Officer & Director: Hi, Kate. Eric C. Wiseman - Chairman & Chief Executive Officer: Hi, Kate.

Hi. I promise I wasn't on mute. I think I was disconnected. But anyway, thank you for taking my questions. My question is on the brands, first with The North Face. I think we've had warm winters in the past, and when we take a look at winter 2011, I think there was still – you still posted double-digit growth for the brand at the time. So can you help us understand maybe what the difference is between this warm winter versus previous warm winters as we think of the supply chain, and things that you've employed have only gotten better over time, and what we should expect going forward if warm winter hits again? Steven E. Rendle - President, Chief Operating Officer & Director: Yeah, Kate, I'll take that. Let me first start by saying this brand is absolutely still the double-digit growth driver that we've said it is. As you kind of look over the four years in our five-year plan, and to your point on what we saw in 2012, we had two years where we had record warm weather. In 2013, we grew at a rate of 7%. 2014, where we had a more normal winter, we grew at 12%. And then this year where we saw the warmest winter on record, we were up 5%. We've talked to you all about how we are pivoting this brand to be more competitive in a four-quarter type business model. And I think some of the results that you saw this year absolutely show that we're doing that. Our Thermoball franchise, which is a fantastic three-season outerwear franchise, continues to grow. Performance apparel with our Mountain Athletics group up 40%, our equipment category growing double-digits, re-launch of our premier Summit Series collection, and multi-sport footwear growing double-digits. We are pivoting to be more responsive and more capable to navigate these kinds of extreme weather conditions. The realignment of the category merchandising model that I referenced is absolutely kind of fine-tuning what we've already done with our activity-based model. So we see huge opportunities still from a category channel and geographic expansion standpoint for this brand.

Okay, thank you. And then, my second brand question was on Vans. I think Karl Heinz had mentioned slowness in the Core Classics category in Europe. I think last quarter, you attributed some slowness in Vans from shipping, timing changes in Vans. Can you talk to us about what's happening with that brand internationally and, again, what we should expect over the long term for the brand growth internationally? Karl Heinz Salzburger - Vice President, VF Corporation & Group President, International: Sure, Kate. I'll start with Asia, I think you heard the numbers in Asia are good. We had stellar performance in Asia and we believe in the future there are no clouds there. Europe is a little bit different. First of all, the brand is really strong. We don't see a brand problem, right? We see that when analyzing our metrics. We see how we do with the competition and we see our product initiative. It is true, though, that there is a product issue in the market, which affects not only us but affects the entire market, which is on this Classic style. That's why we guided a little bit softer for 2016 because we need time to digest this. But the brand is very strong and we are very confident. All the great numbers we had in the past outside 2016, we have no reasons to believe that we have an issue with the brand.

Thank you.

And we'll go next to Dana Telsey with Telsey Advisory Group.

Good morning, everyone. As you think about this new environment and the channels and geography and new customer profile, as you think about each division and their contribution to operating income going forward, does that change at all? Is there any puts and takes on margins or expenses on each division to be aware of, that makes things different than what have been expected go-forward? Thank you. Eric C. Wiseman - Chairman & Chief Executive Officer: Thanks, Dana. That's a really good question and actually we haven't had that question before. That doesn't happen to us that often. So, well done. Thinking about it quickly and from a high level, we have, by brand, strategies right through – for the next five years that we're looking at, and they include everything that we anticipate in the changes in shopper behavior. And so, we don't see that causing a fundamental change to the mechanics of our P&L, which I think was your question. We don't see that, but that's – I'm looking around the room to see if anybody else sees anything that I don't see. So, no. What we will continue to see is an expansion in our D2C business, particularly through e-commerce, and expansion of our international business, which as you know very well is very profitable business for us. And because the tax rates are lower outside United States than they are in United States, that helps us create shareholder value, and we still have a lot of opportunity outside United States.

Thank you. Eric C. Wiseman - Chairman & Chief Executive Officer: Thanks, Dana.

And we'll go next to Edward Yruma with KeyBanc Capital Markets.

Hey, just two quick ones, guys. I guess, first, I know this is kind of a fungible line, but how would you over assess the overall sales of what you'd consider to be non-weather-impacted goods? And then I guess second, with the gross margin investment you had to make to clear and get the inventory level under control, is it your understanding that the goods are actually sold through or is some of that investment potential going toward folks that may end up packing that inventory away? Thanks. Steven E. Rendle - President, Chief Operating Officer & Director: Yeah, I'll take a stab at this one, Ed. I think sales on the non-weather-impacted businesses or categories were very strong. In the case of The North Face, I referenced the success we saw with our Mountain Athletics collection, up 40%; the ThermoBall franchise continuing to grow nicely, not just here in the U.S. but globally; our Vans business had another breakout year, up 16% when you take into effect the FX and the 53rd week. I would tell you, all those would be non-weather-related businesses. But even there, the Mountain Edition collection, both footwear and apparel, saw significant sell-through, giving it great momentum going into this year. So, it really is those heavily insulated styles where we saw the slowdown. I'm sorry, Scott will grab that second portion. Scott A. Roe - Chief Financial Officer & Vice President: Yeah, I guess the question on the second part of that was the aggressive inventory actions, where do we think that inventory ultimately ended up. And I guess the answer is, we can't really definitively answer that. Let me tell you what the actions we took were, right? So, it was varied. We discounted through our own outlets and our own full price retail. In some cases, we sold some off-priced goods. And the weather has turned a bit this year so far in 2016. So certainly, some of that has sold through, hard to speculate how much.

Great. Thanks so much.

And we'll take our next question from David Weiner with Deutsche Bank.

Yes, good morning. So, I had two quick questions. Number one, could you talk a little bit about the wholesale business in Europe? It seemed to me from the comments – and obviously I understand that you have a mix shift to D2C globally, but nonetheless it seemed to me that there were some weakness relative to expectation in Europe at wholesale. So, can you talk a little bit about what's going on in that channel broadly? And I guess, just my second question, a follow-up, I think it was Ed that asked the question about weather versus non-weather. Is there any way you can kind of bottom-line it and tell us – you've broken out the FX impact and the cycling of the 53rd week impact on revenue, can you give a range of estimate of what the total impact to revenues was due to the weather? Thanks. Karl Heinz Salzburger - Vice President, VF Corporation & Group President, International: So, Dave, maybe I'll start with the first question, the wholesale scenario in Europe. I think Eric mentioned it in his opening script. The first nine months actually, we were tracking as we had planned. We were growing mid-single digit as per our plan. The challenge was more in the last quarter, where the weather affected us as well. I think it was widely reported, and that particularly challenged our cold winter brands. On the other one, Kipling for instance, Eastpak, we did actually pretty well. So, we're not affected there. All in all, I think also snow came and it got cold in Europe, a little bit later but it came. So, inventories are pretty normalized now, so that is good news. The second part of the question – what was the second part? Scott A. Roe - Chief Financial Officer & Vice President: Weather-related potential impact. Eric C. Wiseman - Chairman & Chief Executive Officer: Yeah, we haven't quantified what that might be. Scott A. Roe - Chief Financial Officer & Vice President: Right. Eric C. Wiseman - Chairman & Chief Executive Officer: Yeah.

Okay, thanks.

And we'll go next to Lindsay Drucker Mann with Goldman Sachs. Lindsay Drucker Mann - Goldman Sachs & Co.: Thanks. Good morning, everyone. I had two questions. The first is, you mentioned one of your long-term strengths being your best-in-class supply chain. I was hoping that you could give us any insight as to whether you have specific initiatives this year to make you guys faster or more efficient or any other benefits that could accrue to the business from supply chain innovation? Steven E. Rendle - President, Chief Operating Officer & Director: Lindsay, I'll start with that, and then I'll have Scott Baxter pipe in on something specific going on in Jeanswear. Speed and nimbleness within our supply chain is top of mind and it always is. In fact, our internal production is extremely responsive and is one of the key strengths of our Jeanswear businesses, and we're looking at being able to transfer that type of thinking through our Third Way programs into the sourced side of the business. And then on top of that, with our new Innovation Centers now in place and up and running, we have some specific projects both in our Jeanswear and Technical Apparel groups partnering with our supply chain on longer-term advanced manufacturing initiatives that would absolutely make us more nimble, add speed, partnered with the upstream merchandising capabilities within our businesses where we are constantly looking at ways to really reduce lead times, increase frequency of flow to be more relevant and more frequent in front of our consumers. And Scott might want to talk to you a little bit about something going on in Jeanswear. Scott H. Baxter - Vice President, VF Corporation & Group President, Jeanswear, Imagewear and South America: Yeah, I most certainly can. We have a project…

And we'll go next to Erinn Murphy with Piper Jaffray. Erinn E. Murphy - Piper Jaffray & Co (Broker): Great. Thanks. Good morning. You guys alluded to briefly of the off-price lever that you pulled in the fourth quarter. Can you just talk a little bit more about your exposure overall to off-price versus what the norm would normally be in this season? And then, when you talked to those partners post-season, what is their appetite to take on more products just given the abundance of inventory out there in the channel? Steven E. Rendle - President, Chief Operating Officer & Director: I think as we look at the off-price lever, our businesses, we have our outlet stores that are our first choice, where you see us holding the inventory that Scott referenced. When we look outside of our model, we've got some very strategic partners that have worked with us very, very well over the years. Our exposure year-over-year is up slightly but not to a degree that would have us at all concerned. And I can't really speak to the appetite for them. I can tell you in our quick movement and strong relationship, we feel very good with where we are with our inventories going into next year. And not really sure – can't really comment on how those partners sit in their relative business. Eric C. Wiseman - Chairman & Chief Executive Officer: And, Erinn, I'll add to that. As I said this, I think it was Omar's question at the very beginning, we reacted early and aggressively to the slowdown that we saw coming at us and it was only 9% growth in inventory. And we think that's going to look pretty good versus some others in our space. And so, we moved on our…

And we'll take our last question from Robby Ohmes with Bank of America.

Eric, can you hear me okay? Eric C. Wiseman - Chairman & Chief Executive Officer: I can, Robby. Can you hear me?

Great. For the last question, I was hoping that you could talk about Greater China and maybe tell us what you guys are seeing there right now, maybe even go through Vans, TNF, Jeanswear and Timberland, and sort of the just broad brush strokes 2016 assumptions for Greater China? Thanks. Eric C. Wiseman - Chairman & Chief Executive Officer: So, Robby, Karl Heinz is going to take that question for us. I'm actually a little under the weather today, so I'm trying to reduce my talking. Karl Heinz Salzburger - Vice President, VF Corporation & Group President, International: Okay, Robert, I think you heard me saying, I always tend to give the same answer, China is a marathon for us, it's a great opportunity long term. I mean many people talk about China, the slowdown in China. The fact is when we talk China, it's Greater China, we grew 13% in constant dollars in 2015, and that includes Hong Kong which was widely reported being down because of the tourists. So, Mainland China was even higher for us. And we expect similar numbers for 2016. So actually, we're performing well in China. As you know, we are active with primarily four brands; The North Face, Vans, Timberland and Kipling. For the rest, we have a distributor model. So, there's a long way to go. We have about 2,500 doors on four brands, which, benchmarking to large players, where they play about (01:13:33) 5,000, 6,000, 7,000. So, we have a long way to go there.

And then on Jeanswear? Karl Heinz Salzburger - Vice President, VF Corporation & Group President, International: Jeanswear, we act with Lee in China. And I mentioned that in my script, it's doing extremely well. We have a leadership position there in that market driven by product innovation. The Jade, I mentioned, we are a candidate to win an award. We're really doing well. We're up this year again double-digit, and, no, it's good, it's really good.

So, there's no assumption of a China slowdown – a significant China slowdown in 2016 in what you gave us today? Eric C. Wiseman - Chairman & Chief Executive Officer: We see Greater China in two halves. There absolutely has been a slowdown in Hong Kong. Our business is really strong in Mainland China, and the two of those together, we're up 13%, as Karl Heinz said, which tells you how strong the Mainland China business is. And we're not anticipating it being much better or worse. We're right in that zone of up 13%.

Got it. Karl Heinz Salzburger - Vice President, VF Corporation & Group President, International: And clearly, I mean...

That's very helpful. Eric, I hope you feel better soon. Eric C. Wiseman - Chairman & Chief Executive Officer: Thank you, Robby.

That concludes today's question-and-answer session. I'd like to turn the conference back to Eric Wiseman for any closing or additional remarks. Eric C. Wiseman - Chairman & Chief Executive Officer: So, just a quick comment. First, thank you for taking so much time with us today. Look, we are disappointed in our fourth quarter numbers for sure, but we're not disappointed in our performance for last year. We think we threaded the needle really well coming through a very surprising and difficult fourth quarter, and that we're positioned to put ourselves right back on track towards our 2017 growth rates that we've talked about. As we've said, we have a cautious outlook for this year at this point, and we think that's a prudent thing to do. And we'll give you another update in April. Thanks so much.

This does conclude today's conference. We thank you for your participation. You may now disconnect.