Ladies and gentlemen, good morning and welcome to the HSN, Inc. Third Quarter 2015 Earnings Conference Call and Webcast. This call is being recorded. Following the conclusion of today's discussion, the HSNi team will be taking your questions. With that, I'd now like to turn the call over to Felise Glantz Kissell, Vice President of Investor Relations. Ms. Kissell, please go ahead.

Good morning and thank you for joining us. On this morning's call, we have Mindy Grossman, Chief Executive Officer of HSNi; and Judy Schmeling, Chief Operating Officer and Chief Financial Officer. Judy will first review our financial performance. Mindy will then strategically discuss the business. As always, some of the statements made on this call may be forward-looking and, as such, are subject to many factors that could cause actual results to differ materially from expectations reflected in the forward-looking statements. Additional information regarding these factors, as well as various risks and uncertainties, can be found in HSNi's earnings release filed with the U.S. Securities and Exchange Commission and available on the company's website. HSN does not undertake to publicly update or revise any forward-looking statements. Also, on today's call, there will be references to certain non-GAAP financial measures. These are described in more detail in the company's earnings release and SEC filings available on the HSNi's website. You are encouraged to refer to the press release and SEC filings and to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP results. I would now like to turn the call over to Judy Schmeling, HSNi's COO and CFO. Judy? Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Thanks, Felise. Good morning, everyone. At HSNi, sales increased 3% with digital sales up 8% and adjusted EPS was $0.70 compared to $0.74 in the prior year. Our results in the third quarter were not reflective of the power of our brand. The primary factors for this performance included a highly competitive retail environment, resulting in heightened promotional activity coupled with lower demand trends, most notably impacting our Cornerstone portfolio. And at HSN, strong growth in electronics and culinary was not enough to offset softness in…

Our first question comes from the line of Neely Tamminga with Piper Jaffray. Your line is now open. Please go ahead. Neely J. N. Tamminga - Piper Jaffray & Co (Broker): Good morning. I have one question and one follow-up if I could. Judy, could you speak a little bit to the Q4 outlook? We don't intend to be so short term in nature but I think the key question that we are fielding from investors is, are you even able to produce positive top line growth especially out of the HSN division in Q4? So, hearing from you guys more specifically how you navigate in the near-term with the idea that you got the longer-term initiatives in play, that would be really helpful for investors and holders of your stock? And then a follow-up. So, Mindy, on the Chief Merchandising Officer role, when was this affected, I guess, is the question we are asking, I think this sounds like news to us by and large and I guess the question here too is, are you looking to do something differently with the overall chief merchandising structure or will there be a search in place for another traditional CMO? Thanks. Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Sure. Thanks, Neely. Regarding, obviously, heading into holidays, we don't give guidance or anything like that that you know over periods of time. Our goal is to continue to drive top-line performance and improved performance. However, we recognize the very competitive environment that we are in and as Mindy articulated, it's going to take some time to course correct and really inject some newness into some of our categories. However, as you said, we are completely lined up with products for holiday season. I think the window is a very…

Our next question comes from the line of Eric Sheridan with UBS. Your line is now open.

Thanks for taking the question and appreciate all the color and commentary on the call. Maybe just going back to the comments around the health of the consumer. Just maybe, Judy, maybe just helping understand a little bit better your consumer and where the pressure points are in terms of either their velocity of purchases, how they are sort of thinking about price points and where you might be able to push in around your existing consumer base to maybe drive a little bit better behavior? And then one quick follow-up in terms of how the quarter developed, in terms of where was exit run rate in September and how you think about the setup for holiday shopping against that consumer comment? Thanks. Mindy Grossman - Chief Executive Officer & Director: Okay. I'm going to answer the consumer comment in two ways. More broadly, what do we think about consumer and then specifically and probably more related on the HSN side to what we're thinking about our specific customer and what's going to motivate her. I would say in general, the landscape right now is very volatile, very promotional and I think the consumer has a lot of options for where they are spending their discretionary income, including technology and experience versus just products. And I think that what we've seen in the last couple of years, as Judy mentioned, is compression in the holiday season because they have been trained to wait. So I think that's how we're seeing the overall macro. Specifically at HSN, one of the things we do have that's incredibly valuable and I mentioned on our customer metric that best customer, that loyal customer, she is here with us. We just need to give her the continued diversity of the product to get her to buy more throughout the season and then in addition to that, continue to execute on the new tools and talent that we have driving personalization to create that conversion and still drive a lot of customer acquisition. So that's definitely the focus on the HSN side.

Thanks so much.

Our next question comes from the line of Tom Forte with Brean Capital. Your line is now open.

Great. Thanks for taking my question. I had kind of one related question in two parts. The first is, on the notion of balancing your sales growth and your profitability growth, is it primarily about getting jewelry on track and then trying to determine the appropriate mix for consumer electronics? And then as it pertains to full-year 2015, you had suggested in the past this notion of 7% sales growth and 11% EBITDA growth. Does the third quarter performance change your view on that regard? Thanks. Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Sure. In terms of – first let me answer your second question first, on the leverage. That was really, the 7% and 11% was more of an example of what we can expect from a leverage perspective. That was not meant to be any type of long-term guidance. Our goal is definitely to achieve those things over a period of time, but it wasn't anything specifically related to that. It was specifically, we do expect to continue to get leverage out of our business on the HSN side and we're very disappointed that we were unable to achieve that which is the reason why Mindy also focused on gross profit expansion as we head into the remaining years, which include to your point a balancing of electronics, getting jewelry really back on-track, but also more importantly, getting the home business back where it needs to be. We did have enough newness and variety in that category. And as Mindy mentioned, our best customers will continue to shop with us. She just wasn't buying as much because those categories did not have the compelling products that she needed. So those are the things that we're really working on course correcting. But, again, our goal here…

Thank you.

Our next question comes from the line of Matt Nemer with Wells Fargo. Your line is now open.

Thanks so much. Good morning. My first question was on the inventory actions at Cornerstone home brands. Just wondering if we could get some more color on that? Is it broad based, is it certain categories, and what would the sales growth look like excluding those markdowns? Mindy Grossman - Chief Executive Officer & Director: Sure. So it was primarily in our outdoor categories and several of our brands that we just had quite a bit of inventory, we did a deep analysis of that and decided that it was time to move through some of that inventory and mark it down accordingly. We do think that there's some residual inventory heading into Q4, although not to the extent that it was. We also have some residual inventory related to our Chasing Fireflies spend, but we do expect to be able to move that quite effectively in Q4. So that was really the overall category that drove that decline. I can't say exactly what the sales growth would have been without that. It was really more of the margin pressure versus the top line growth perspective.

Okay. And then just secondly, the shipping promotions that you talk to, do you think that that's really just a reflection of the broader environment or could we read into that that the lower -- the new lower shipping prices at QVC, which is more of an EDLP shipping message as potentially having an impact? Mindy Grossman - Chief Executive Officer & Director: Okay. Great question. Part of the shipping and handling promotions was related to our increase in electronics, which generally are on free shipping and handling as well. But I would also say that part of the issue of the incremental shipping and handling promotion this quarter was because of not having a robust pipeline in home and jewelry that we should have. And so, we were putting more promotional cadence. So, unlike other quarters when I would have said that we were very strategic with driving our shipping and handling promotions, this was not that way. It was more reactionary in the moment. We do not believe that QVC shipping and handling promotions have an impact on our overall business. We had a more robust shipping and handling programs across all of our brands. We did buy more and save early on. We've done OVT (39:41) shippings. So, we have been more promotional than them historically. So, I do not believe that had an impact.

Okay. Thanks so much.

Our next question comes from the line of Barton Crockett with FBR Capital Markets. Your line is now open. Barton Crocket - FBR Capital Markets & Co.: Okay, great. Thanks for taking the question. I just wanted to circle back a little bit to the Halloween kind of spookiness around Amazon.com and TV shopping. At this level, I think that the press report that was out there that affected your stocks really had no substance to it in terms of presentation of anything like a TV shopping channel. But you guys are out there working in the industry. Do you hear anything from your interactions with cable distributors, satellite distributors to suggest that Amazon is negotiating for carriage of a TV channel? Or do you hear anything about Amazon approaching TV shopping hosts or production crews or managers who have expertise in producing a competitive show? Have you seen any evidence that they're doing either of those things? Mindy Grossman - Chief Executive Officer & Director: Hey, Barton, that's a great question and we have not. We were just simply calling that out because we knew that there was a lot of chatter around that which was very de minimis, but there was a lot of inquiries into our Investor Relations Department just as a matter of course. But we have not heard anything of the sort. Barton Crocket - FBR Capital Markets & Co.: Okay. All right. And then switching gears a little bit, when we look at the comparisons in the fourth quarter versus a year ago, do you feel like it is a more difficult comparison or not much change? How would you feel about your comps near-term? Mindy Grossman - Chief Executive Officer & Director: I would say that certainly from a top line comp perspective, we're facing some very, very tough comps. I mean that's our largest quarter that we've had to-date. And bottom-line was strong too at 14%. I think that where we have some opportunity is to continue to work on our gross profit margin as well as just really tightly managing expenses more appropriately than – not more appropriately, but better than we did last year say in the fourth quarter. Again, it really, really depends upon the environment as we head into holiday. Those really heightened six weeks can change those dynamics. So, while we're really working very hard on really improving everything that we can in our gross profit margin across-the-board, I do have to sensitize it to that. Barton Crocket - FBR Capital Markets & Co.: Okay, great. Thank you very much.

Our next question comes from the line of Victor Anthony with Axiom Capital. Your line is now open.

Thanks. Maybe I could follow-up on the fourth quarter tough comps. So, I picked up during your prepared remarks the two words: improved performance. So I wanted to dig into that a little bit and what categories have you seen improved performance, particularly as it relates to the fourth quarter? Second, with regards to the heightened promotional activity in the third quarter, what impact did that have on the gross margin in the quarter? And the third question is really just on market rate availability (43:04). I think that you mentioned – I could have missed it, but I wanted to see if there is any sort of impact in the quarter? Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Sure. On the promotional activity, I'd say that on our Cornerstone brand about half of it was related to really increased promotional activity and the other half was related to moving in-season inventory and excess inventory, so it was pretty much half-and-half. And the majority of that would have been in our Home brands from a move in the inventory perspective and promotional activities across our brands with the exception of Garnet Hill, which has seen a remarkable turnaround, which we actually invested in more into Q3 as a result of that turnaround that we've been able to see. So, we do expect that to continue into the fourth quarter. Mindy Grossman - Chief Executive Officer & Director: And I think you were asking about Margaritaville; we did our first launch in the third quarter, which was kind of our smaller test launch. The big re-launch for that, which makes sense given the nature of the brand, will be in the first quarter of 2016. However, we are taking advantage of our relationship and doing the partnership and sponsorship of Jimmy Buffett's New Year's Eve concert, which we will be able to stream live. We feel great about the partnership, the connection to our customer and their brand, and the potential to even go further and be at their resort et cetera. So that will continue.

Our next question comes from the line of Alex Fuhrman with Craig-Hallum Capital. Your line is now open.

Great, thanks. I just wanted to talk a little bit more about the weakness you're seeing in the jewelry business, and you mentioned that at this point, basically your holiday assortment and program lineup is set. How much of a role is jewelry playing here in the fourth quarter? I mean, are you giving those brands another shot in the holiday season? And to what extent do you think the weakness you've seen in your offerings there have been related to your merchandising structure, which you've obviously taken steps to address, versus perhaps just the power of your proprietary brands? Are they maybe losing a little bit of their appeal this year? Mindy Grossman - Chief Executive Officer & Director: Well, let me just explain in jewelry. Jewelry is 100% proprietary, but they're not generic brands. They are designers, they are creators. So it's not generic jewelry. Where we really needed more focus and what you'll see in the fourth quarter was a skew back to the fine the jewelry business and we went out and literally have four major launches in November and December with well known designers such as Kara Ross, or influencers such as Kristin Chenoweth who has been designing jewelry. We have a new diamond line launching and then actually tomorrow we launch Jennifer Miller. So we've organized against each of the categories of business. We're back in the pearls business, but we really needed to take the bull by the horns and be more aggressive in what we wanted that portfolio to be. We do have brands that are exclusive to HSN that continue to perform very well. Our Jay King business just had its biggest anniversary, our Heidi Daus business. So we just needed to get the right extensions of the portfolio going because we do believe given our customer and given the brands that we have, we deserve to have the better business and that's what we're focused on.

Great, that's helpful. Thanks. And then just really quickly on the Keith Urban business. I imagine that that would be back on the long-form direct response campaign for Q4. Can you just comment on how many hours you have dedicated to infomercials for the product this year versus last year? I mean, is that an opportunity to grow year-over-year, or is that despite the fact that it's coming back versus an absence from Q3? Will that still be a year-over-year headwind? Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Sure. So we're actually in the market right now testing a revised version of that. But it isn't something that we expect to grow over the prior-year and it really depends upon how the infomercial does, how much media we placed against it. So it would – depending upon how much hours we put into it or media revised, it will either be a top line issue or not, but it was not a significant bottom line driver. It really had not much impact in the fourth quarter. So from that perspective, it's not significant. Mindy Grossman - Chief Executive Officer & Director: Yeah. We do have Keith coming back both this month and in December on HSN Live with a new introduction and that we're looking forward to. Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Yeah. And just to let you know how the infomercial business works, you don't plan it out and say this is how many hours I'm already going to dedicate because you determine that we place media buys on a weekly basis. So we can pull and react depending upon on how it's performing.

That's helpful. Thank you very much.

Our next question comes from the line of Anthony Lebiedzinski with Sidoti & Company. Your line is now open. Anthony C. Lebiedzinski - Sidoti & Co. LLC: Good morning. Thank you for taking the questions. Most of my questions have been answered, but just wanted to follow-up as far as your comment earlier about expense management other than the catalog rationalization. I wanted to know if you could share any specific actions that you are taking to manage your expenses better? I also wanted to see if you could give any comments as far as any inventory or markdown risk for Q4 that you perhaps see that we should be aware of? And lastly, if you could just give us an update on your private label credit card penetration on the HSN side? Thank you. Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Sure. So in terms of our cost analysis, we're constantly doing that as you know on the operations side. We have done a lot to really leverage our collective HSNi scale, looking at consolidating our organizational structure and rightsizing the team between HSN and Cornerstone. We've implemented many best practices throughout the organization. On the customer care side, we've actually have done quite a bit and have implemented a shared variable workforce which really is opening up a new call center in Toledo that's now maximizing all of our brands. We've also done a lot in terms of deploying new technology. So we're constantly looking at ways and we do think some of those initiative is going to have bigger savings for us as we move forward into 2016. But we are also always reassessing our existing marketing program, our organizational structure, where we can be more efficient, and that work is currently underway. So…

Our next question comes from the line of Matthew Harrigan with Wunderlich Securities. Your line is now open.

Thank you. So many cable channels, particularly with scripted programming are really getting buffeted by so much fracturing viewing and viewing is lost because you got measurement errors. Hopefully some of that gets corrected with Nielsen and the ComScore, Rentrak deal. But, where are you in the sense of people consuming your video in terms of activity and how that ties in with your customer list momentum as well. I know you don't generally talk about that, but in the context of the overall environment, I thought it would be an interesting question. Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Yes, that's a good question. I think from a viewing perspective, for us it's a different challenge and a different measurement, because part of the reason why people would not be viewing is because you're not showing them the product that they're interested in buying. So it's not like they are coming to watch NBC and The Big Bang Theory every day and so viewership is down as an issue. It is directly correlated and tied to the products that we are offering at that point in time is that we see that across any of our existing categories, one category has much higher viewership than another category, another item. So that is probably a more difficult measure for us to say that there is something specifically related to that. However, anytime that there are viewing events or viewing things that are taking people away from our programming that clearly has hurt us. Those are typical examples like the World Series and the big things that happen, news event. So if there's something that's taking people off of viewing us and they are viewing other consumption, that would specifically impact our business. In terms of the core…

Thanks, Mindy. Thanks, Judy. Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Thank you.

There appears to be no further questions. I will now turn it over to Ms. Grossman to close today's call. Mindy Grossman - Chief Executive Officer & Director: Thank you, everyone. I look forward to following up, keep you updated on our progress as we move into the balance of the holiday season. Thank you.