Good morning and welcome to Wolverine World Wide's Second Quarter 2016 Conference Call. All participants will be in a listen-only mode until the question-and-answer session of the conference call. This call is being recorded at the request of Wolverine World Wide. If anyone has any objections, you may disconnect at this time. I would now like to introduce Mr. Chris Hufnagel, Senior Vice President of Strategy for Wolverine World Wide. Mr. Hufnagel, you may proceed. Christopher E. Hufnagel - VP-Strategy, Communications & Investor Relations: Thank you, Andrew. Good morning and welcome to our second quarter 2016 conference call. On the call today are Blake Krueger, our Chairman, Chief Executive Officer and President, and Mike Stornant, our Senior Vice President and Chief Financial Officer. Earlier this morning, we announced our financial results for the second quarter of 2016. The release is available on many news sites or it can be viewed from our corporate website, at wolverineworldwide.com. If you'd prefer to have a copy of the news release sent to you directly, please call Tyler Deur at 616-233-0500. This morning's press release included non-GAAP disclosures, and these disclosures were reconciled with attached tables within the body of the release. Comments during today's earnings call will include some additional non-GAAP disclosures. There is a document posted on our corporate website, entitled "WWW Q2 2016 Conference Call Supplemental Tables" that will reconcile these non-GAAP disclosures to GAAP. The document is accessible under the Investor Relations tab at our corporate website, wolverineworldwide.com, by clicking on the webcast link at the top of the page. Before turning the call over to Blake to comment on our results, I wanted to provide some additional context and information. When speaking to revenue, Blake and Mike will primarily refer to underlying revenue, which adjusts for the impact of…

We will now begin the question-and-answer session. At this time, we will pause momentarily to assemble our roster. The first question comes from Jim Duffy of Stifel. Please go ahead. Jim Duffy - Stifel, Nicolaus & Co., Inc.: Thanks. Good morning, guys. Michael D. Stornant - Chief Financial Officer, Treasurer & Senior VP: Hey, Jim. Blake W. Krueger - Chairman, President & Chief Executive Officer: Good morning, Jim. Jim Duffy - Stifel, Nicolaus & Co., Inc.: So I think we're all intrigued by the objective for the 12% operating margin. Blake, I think, you suggested that wasn't as exciting as product. You need to remember your audience here. Blake W. Krueger - Chairman, President & Chief Executive Officer: Yeah. I know. Jim Duffy - Stifel, Nicolaus & Co., Inc.: Looking back down... Blake W. Krueger - Chairman, President & Chief Executive Officer: I lean a little heavily towards product and marketing, but I certainly understand. Jim Duffy - Stifel, Nicolaus & Co., Inc.: Okay. So going down the list of things you guys identified as opportunities, a number of these seem within your control. Revenues, one variable you can't control directly. How do you think about the top line in the context of that exiting 2018 objective? And when we're thinking about top line in that context, is addition to margin through subtraction of lower margin businesses a component of the strategy? Blake W. Krueger - Chairman, President & Chief Executive Officer: I think your latter point is certainly a part of the equation. But we entered this initiative – we've been working on it, as you know, for some time now with an ultimate goal of delivering this with a very little top line growth. So we thought that was the prudent approach to take in this environment. We…

The next question comes from Erinn Murphy of Piper Jaffray. Please go ahead. Erinn E. Murphy - Piper Jaffray & Co. (Broker): Great, thanks. Good morning. Blake W. Krueger - Chairman, President & Chief Executive Officer: Good morning Erinn E. Murphy - Piper Jaffray & Co. (Broker): I guess just following up on thinking about the operating margin bridge to 2018. Can you just speak about how to think about gross margin in that context? I was curious just given that you've had a tremendous amount of stability despite all of the volatility in the macro for about several years that rates typically been in the high 30%s, so just curious how to think about that, anything on the input costs? And then I am assuming the balance of the improvement is really coming from SG&A. So any kind of puts and takes on those two components would be great. Michael D. Stornant - Chief Financial Officer, Treasurer & Senior VP: Sure. Well, let me start with your point about sort of that consistency that we've seen with respect to our gross margin and, in light of the impact that FX has certainly had on us over the last couple of years, I think it's a tribute to the work and the proactiveness around pricing. And then, certainly the work that our global operations team has done, to incrementally improve our product cost, or our total supply chain, kind of, costs over that same period of time to help us neutralize some of those FX impacts. But overall, as we look forward, a lot of those efforts are really going to start to kind of materialize for us as we head into 2017. We talked a little bit about the tailwinds related to product costs as we head into spring…

The next question comes from Jessica Schmidt of KeyBanc. Please go ahead.

Thanks for taking my question. Can you talk a little bit about what you're seeing at wholesale? So I know you mentioned inventory overall is still a little heavy. But does the channel seem to be less cautious around pre-orders, given that it seems like the consumer demand has gotten a little bit better over the past few months? Blake W. Krueger - Chairman, President & Chief Executive Officer: I think retailers are now talking primarily about the US market. Retailers continue to be pretty conservative against historical measurements when it comes to advance orders and making a commitment. I think it was a weak holiday season last year. We saw a pretty significant fall off in retail traffic starting about mid-March. That has been very volatile but generally down, as we've gone into the summer months here. Inventories have remained a little high. And so I think they're taking a cautious approach. We've seen it many times before during these cycles when it comes to back-to-school and the holiday season, still a very promotional environment. I don't know when we'll start to see holiday promotions – maybe it will be September this year. I don't know. But consumers and retailers are certainly buying closer to need. And so it just puts a little additional burden on us to have – to be ready and able to apply that when they unlock their pencil and place some orders.

And just a quick follow-up. Can you talk about some of the trend a bit more in Sperry, especially around the boat shoes? So, I guess, does the new Seven Seas collection give you comfort that you could stabilize the boat business? I know you had previously talked about sort of a natural level for boat shoes in men's, but, I guess, how should we be thinking about this now? Blake W. Krueger - Chairman, President & Chief Executive Officer: Yeah, I think, I'm very excited about the Seven Seas offering. I probably wish it was here four or five months sooner than it will be at market. But I have seen it several times now and it's coming, obviously, more athletically inspired. Boat shoes continue to be a downward trend as far as a fashion silhouette. You know, our expectations for Sperry take all that into account. We expect Sperry this year to meet our expectations for the full year to deliver growth in the back half, especially some growth in Q4. You just have to remember our Q4 starts in mid-September and contains 16 weeks, not 12 weeks like our first three quarters. So we feel pretty good about where Sperry is. I think boat shoes overall for the brand are down to less than half of total sales. So that's certainly a trend we expect to continue. Certainly, retailers and consumers are willing and encouraging the Sperry brand to advance into other product categories and that's a big plus for the brand going forward.

Great, thank you. I will pass it along.

The next question comes from Corinna Van der Ghinst of Citigroup. Please go ahead.

Thank you. Hi. Good morning, Blake. Hi, Mike. Michael D. Stornant - Chief Financial Officer, Treasurer & Senior VP: Good morning. Blake W. Krueger - Chairman, President & Chief Executive Officer: Good morning.

Hi. I was hoping to talk a little bit more about your SG&A in the quarter and for the rest of the year. You talked about just general expense discipline, store closures, lower pension expense and I think last quarter you mentioned that the timing of some of the Merrell advertising was shifted into Q2 from Q1. Can you just kind of walk us through how that played out during the quarter, did you shift any of your planned SG&A dollars from Q2 to the back of the year, or how to kind of expect it to play out? Blake W. Krueger - Chairman, President & Chief Executive Officer: Yeah, no. I think for the quarter, a little bit of better performance really came from the gross margin, overall gross margin performance. We don't really have any major timing shifts into the back half for any of our marketing initiatives or any other SG&A items. We did have some movement from Q1 to Q2 for Merrell. But there are always puts and takes and changes, but nothing meaningful that would require any kind of new modeling.

Okay. That's helpful. And then, I was wondering if you guys could just maybe talk about your broader outlook on the outdoor market. I know you have new product initiatives coming out and some new kind of marketing initiatives in partnership with some of your bigger sporting goods retailers. But just in light of the recent liquidations that we've seen, in the industry and, general kind of consumer related, can you talk about your views on outdoor, specifically? Blake W. Krueger - Chairman, President & Chief Executive Officer: Yeah, outdoor, I think, continues to be pretty much a steady-on market here in the U.S.A. Certainly, we had several of our brands that were impacted by the recent retail bankruptcies. Saucony would be a brand that would fall in that category, certainly Merrell, Sperry as well. So those bankruptcies have had an impact. But the consumer is still out there looking for some fresh innovative product. So, our brands are focused on bringing some cutting-edge product to the market as soon as – frankly, as soon as possible. When you're there with fresh, exciting new product that has a good story behind it, the consumer will respond. So, we see, at least in the United States, the outdoor market to be pretty much steady on, a solid market. I think if you look at the market share data, you would have seen, certainly, athletic, athletic-inspired, athletic casual footwear spike up in the quarter. The outdoor market would have been pretty much flat to up slightly in the footwear sector. And then, you would see some other categories like casual and dress that would have tapered off. Q2 for the industry was a bit of a tough quarter. Overall, footwear pairs in the United States were down probably low single digits, probably down in the 2% to 4% range for the entire quarter.

Great. Thank you.

The next question comes from Steve Marotta of C.L. King and Associates. Please go ahead. Steven L. Marotta - C.L. King & Associates, Inc.: Good morning, Blake and Mike. Blake W. Krueger - Chairman, President & Chief Executive Officer: Good morning. Steven L. Marotta - C.L. King & Associates, Inc.: There was – you mentioned – Mike, there was an abnormally low tax rate in the fourth quarter of last year, and you indicated, of course, that wouldn't repeat. Michael D. Stornant - Chief Financial Officer, Treasurer & Senior VP: Yeah. Steven L. Marotta - C.L. King & Associates, Inc.: Can you give a little bit of guidance on your expected tax rate in the third and fourth quarter. Is it just at mid to upper 20%s area for both? Michael D. Stornant - Chief Financial Officer, Treasurer & Senior VP: Well, in the fourth quarter, it will be quite a bit higher than that, in the third quarter it will be kind of approaching 20%. So, there's a shift there. It's really not – I mean, some of those adjustments in discrete items that we tend to have, but not necessarily unusual, I think the change this year is just the timing. So we'll have those benefits in Q3 as opposed to Q4. Steven L. Marotta - C.L. King & Associates, Inc.: You often give – I'm sorry, go ahead. Michael D. Stornant - Chief Financial Officer, Treasurer & Senior VP: No. That's all. Steven L. Marotta - C.L. King & Associates, Inc.: You often provide EPS expectations for the coming quarter. Could you talk a little bit about the range that you're looking at for the third quarter? Blake W. Krueger - Chairman, President & Chief Executive Officer: We haven't done that in the last couple of quarters.…

The next question comes from Jonathan Komp of Robert W. Baird. Please go ahead. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Yeah. Hi. Thank you. Mike, if I could just first clarify for the third quarter and fourth quarter commentary, I know you talked about a rebalancing of consensus expectations. I'm just curious have you also kind of rebalanced your internal plan or was it just a mismodeling externally? Michael D. Stornant - Chief Financial Officer, Treasurer & Senior VP: Yeah. We didn't give that detailed guidance by quarter. Our plan really hasn't changed a lot. Again, just I think, to reference Blake's comments on the new normal in the trends and I think some of the overall hesitancy at retail and in terms of future orders and buying heavy into back-to-school or whatever, so we've seen that for some time. Our international business is trending right on plan. And overall I don't think there is a big change internally. But it was maybe something we could have given a little more clarity on last quarter when we first thought but we didn't. And now, we just felt like it was, obviously, the right time to provide some more clarification. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Okay. That's helpful. Thank you. And then on the 12% operating margin target, I just want to follow-up maybe on the operating cost assumptions at a higher level embedded in there. And I know if you look at today's revenue base and apply a 12% margin and assume half of the savings come from within the gross margin, I think you need to reduce the operating cost structure by about 5 percentage points on a dollar basis. And just wondering if you could maybe bridge…

The next question comes from Mitch Kummetz of B. Riley. Please go ahead. Mitch Kummetz - B. Riley & Co. LLC: Yeah. Thanks for taking my questions. Mike, let me start with you, just in terms of the 12% operating margin guidance, I guess I just got two quick follow-ups there. Michael D. Stornant - Chief Financial Officer, Treasurer & Senior VP: Sure Mitch Kummetz - B. Riley & Co. LLC: Jim asked about the sales expectation, and then you guys were saying kind of flattish. Does that assume growth in kind of continuing ops offset by some loss sales from discontinued ops? So it's the first question on that. And secondly, on the margins, 12% implies, I think, 300 basis points plus margin expansion from where you're trending today. I mean, should we think of that as kind of the improvement there is fairly linear across the two years, 150 basis points plus over the next couple of years? And I've got a follow-up for Blake. Michael D. Stornant - Chief Financial Officer, Treasurer & Senior VP: Okay. Sort of, on your last point, I probably wouldn't think about it that way quite yet. And we're not giving guidance on operating margin for 2017 and when we have a more clear detailed game plan to share, you'll probably get more insight on how that's going to phase out over the next two years. We certainly expect improvement next year. We'd be disappointed if it wasn't meaningful improvements. But we still have – also still have some work to do. And there'll be some work in the first part of 2017 to get all of this accomplished. So, I think that's important. I think, fundamentally, the growth assumptions that we built in here, one area of the business that's growing…

We have time for one more question. And the last question comes from Laurent Vasilescu of Macquarie. Please go ahead. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Good morning. Thank you very much for taking my questions. I think you're in the process of moving offices in Boston this summer. Can you tell us how that's progressing? Are there any savings we should think about going forward from this initiative? And then can you remind is what the CapEx guide is for the year? Blake W. Krueger - Chairman, President & Chief Executive Officer: Yeah. I would say we've already moved into our new offices several weeks ago in Boston. We had an official building opening ceremony that involved the Governor of Massachusetts and several other visitors last week, which was frankly very special. And so I would say the reaction from the team in Boston has been excellent as it should be. Just to confirm with you our rent did not go down. So, I don't think the Boston market, which is pretty much on fire from a real estate standpoint. We – internally we view this as an investment for the future. But the ability to have your teams design space, design work rooms, design showrooms, design a work environment with on-site day care, in the very building, just off of 128, with restaurant and retail space, it's very nice. And it has been uplifting certainly for the team. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Very good. And then regarding the groundbreaking of the innovation center, can you tell us what brands will be focused on or will the innovation center focus on products that can utilize across different brands? And how should we think about the CapEx as a percentage of sales for 2017 as it…

Thank you. The question-and-answer session has now ended. I would now like to turn the call over to Mr. Chris Hufnagel. Mr. Hufnagel, you may proceed. Christopher E. Hufnagel - VP-Strategy, Communications & Investor Relations: On behalf of Wolverine World Wide, I would like to thank you for joining us today. As a reminder our conference call replay is available on our website at wolverineworldwide.com. The replay will be available until August 9, 2016. Thank you and good day.

The conference call has concluded. Thank you for attending today's presentation. You may now disconnect.