Ladies and gentlemen, good morning, and welcome to the HSN, Inc. Second Quarter 2016 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 would now like to turn the call over to Felise Glantz Kissell, Vice President of Investor Relations. Ms. Kissell, please go ahead.

Good morning, everyone. 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 and as of today appointed President of Cornerstone. Mindy is going to first say a few words followed by Judy's review of 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. HSNi does not undertake to publicly update or revise any forward-looking statements. In addition, on today's call, there will be references to certain non-GAAP financial measures. These are described in more detail on the company's earnings release and SEC filings available on the HSNi website. You are encouraged to refer to the press release and SEC filings and to review the reconciliation of these GAAP – non-GAAP financial measures to the most directly comparable GAAP results. I would now like to turn the call over to Mindy Grossman, HSNi's CEO. Mindy? Mindy Grossman - Chief Executive Officer & Director: Good morning, everyone, and thank you for joining us on today's call. Before Judy reviews our financial performance for the second quarter, I wanted to take a minute to discuss the announcement we made earlier today, regarding Judy's appointment as President of Cornerstone. Judy has been an integral business partner and friend to me and so many others across the broader management team over the years and I'm…

Thank you. Our first question comes from the line of Tom Forte from Maxim Group. Your line is now open.

Great. Thank you. So, first off, congratulations to Judy, I'm very excited. Judy Schmeling - Chief Operating Officer, Chief Financial Officer & President of Cornerstone Brands: Thank you.

Second, and maybe it's too early to ask you this question, so now that you've decided to shed Chasing Fireflies and TravelSmith, do you feel like the portfolio is where you wanted or are further adjustments in order? And then it looks like you're accelerating your, call it, physical store effort for your brands. How should we think about the impact on your P&L from that effort? Thanks. Judy Schmeling - Chief Operating Officer, Chief Financial Officer & President of Cornerstone Brands: Sure, Tom. Definitely, I would say that I'm very new into the role, but in terms of the brands that we have, we did decide to really focus primarily on the home brands in addition to Garnet Hill, which has done a remarkable turnaround job and has a unique place in the market. So, at this point in time, we don't see any future change. Of course, once I get in there and really determine, that could always change our approach. But I think our first focus is really trying to return the business back to a growth trajectory and really look at all of those opportunities by continuing to look at our proprietary product development, as I mentioned on the call. Looking at our retail experiences that you mentioned, we don't have a set number of retail locations that we're looking to expand, but what we have found with a few Ballard stores that we have is it really brings an increased sales to those markets as well as a further brand awareness and so we're trying that also with Garnet Hill, as you know we opened a Bridgehampton store last year in the summer, great brand recognition. We're very excited about the opportunity with a pop-up shop to be able to again to drive that brand business. And it's not a lot of investment from that perspective. As we rollout more stores, certainly, if we decide to increase that level of store rollout, we will be informing the group in terms of CapEx. But the incremental P&L is positive, except for opening up startup costs of the first store. So...

Great. Thank you very much.

Thank you. Our next question comes from the line of Neely Tamminga from Piper Jaffray. Neely J. N. Tamminga - Piper Jaffray & Co. (Broker): Great. Thanks. Hey, Judy, congratulations, completely deserved and I too echo the board and Mindy's accolades here, watching your career over the years. I think you are in a really cool and very unique position, though, given your kind of ability to see cross-functional and then also being kind of a chief capital keeper of the company. So could you share with us maybe some of your early approach as to how you're going to maybe manage the Cornerstone business differently than it's been managed in the past? Thank you. Judy Schmeling - Chief Operating Officer, Chief Financial Officer & President of Cornerstone Brands: Sure. Great question. And you're right. I have seen what has worked and what hasn't worked over the timeframe and I am in a unique position because I know some of the team members here really well and I have looked at it from a CFO vision and a different eye. I would say that my approach first is going to be really work with the team leaders. I think that they have a lot of thoughts on what their issues and opportunities are. And one of the things that I think I can do best which is what I've demonstrated here in my current role is really galvanize the team around the core strategies, eliminate roadblocks for them and really focus on the big rocks that are going to have a substantial impact on the business. And so, I am going to be visiting the brands starting August 15, hitting the ground running on our strategic planning process. But I think that there is a lot of opportunity here. We can continue to really maximize our digital experience from a consumer standpoint. I'm very passionate about that. I think the HSN people will also tell you that as well. And really question and just determine how we are spending our dollars, whether it's on marketing or capital or whatever it is, I think I bring a different skill set to this team and we'll be very complementary (35:54) with each other. Mindy Grossman - Chief Executive Officer & Director: And I have to say that the response from the organization has been overwhelmingly positive to have Judy as a partner in this role, so we are thrilled. Neely J. N. Tamminga - Piper Jaffray & Co. (Broker): Thanks for that, Mindy, and congratulations, Judy. We're going to really enjoy watching the next era for Cornerstone. Thank you. Mindy Grossman - Chief Executive Officer & Director: Thank you.

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

Thanks so much, and congrats also, Judy, look forward to seeing how it progresses going forward with Cornerstone. Maybe one big picture question and just one clarification if I can. Bigger picture, for Mindy, you cited macro, you cited competition and some of the things you are dealing with in the business as we moved through most of the first half of this year. I want to understand a little bit better how those pressures might be evolving as you move from Q1 into Q2 and now into Q3, what you're doing just to sort of offset those and how we should be thinking about those impacting the business model as we moved out of the first half and into the second half of the year. And then maybe a clarification, I think you called out the annualized revenue of the brands that are under the letter of agreement. I wanted to know if you'd also be willing to call out the EBIT or EBITDA impact from those brands. Thanks so much, guys. Mindy Grossman - Chief Executive Officer & Director: Great question. So let me talk about two things. One, what we're seeing in consumer behavior of what we think it is happening externally and then what we're really trying to do within our brands to ensure that if the consumer is going to spend that we will get a piece of that pie. I would say that what's happening right now in terms of the uncertainty, the distraction, the negativity, that's an anathema to the consumer mindset and for retail in general, especially the want side of retail versus the need. And they will wait for what they want versus need. So I think across HSNi, we really have to focus on the experience, on the uniqueness and really delivering compelling content wherever the consumers are to drive that commerce. And those are the strategies we have in place which is I talked about newness and variety in the pipeline, the more content that we are putting on additional platforms, the more opportunities for our brands to be exposed. That has to be our maniacal focus because, over the next few months, I don't see that consumer distraction, as you will, abating. So we really have to focus on where we can be differentiated. Judy Schmeling - Chief Operating Officer, Chief Financial Officer & President of Cornerstone Brands: And for your follow-up question, the EBIT, the pre-tax loss was $5 million.

Thanks so much for the color.

Thank you. Our next question comes from the line of Anthony Lebiedzinski from Sidoti & Co. Your line is now open. Anthony C. Lebiedzinski - Sidoti & Co. LLC: Yes, good morning. And let me add my congratulations as well to Judy. So, a couple questions, you did mention – I think actually it was Mindy, that mentioned near-term margin pressures and, just to clarify, is that at both at HSN and Cornerstone, and also what you're seeing from just an overall demand perspective? And my follow up question as far as the divested brands, can you give us a run rate for the first half of this year in terms of sales and EBIT? Thank you. Mindy Grossman - Chief Executive Officer & Director: So, I would say where we will see pressure, as I mentioned before, is in that outdoor segment as we get through just the balance of the season and inventory until all our interior drops occurred. And then in select categories at HSN where we're still cleaning up on terms of the inventory. Where we're seeing strength is in beauty, electronics, this is specifically HSN, culinary and certain design and improvements with health and wellness. Where we are still challenged is really more on the equipment side of fitness and the infomercial category. We're seeing it this time of year, less launch, less media spend because of the high cost of dollars spend. And less innovation, obviously, occurs during election year. But it's been somewhat more pronounced. So we're obviously focusing on the categories that are performing. And then the business such as Garnet Hill, which has been pretty consistent. Anthony C. Lebiedzinski - Sidoti & Co. LLC: Got it. Thank you. Judy Schmeling - Chief Operating Officer, Chief Financial Officer & President of Cornerstone Brands: And regarding your question on the first half sales for those two brands, it was approximately $30 million. Anthony C. Lebiedzinski - Sidoti & Co. LLC: Okay. And what was the EBIT drag from that? Judy Schmeling - Chief Operating Officer, Chief Financial Officer & President of Cornerstone Brands: I don't think that we release that yet, so let me find out. And I will let you know. Anthony C. Lebiedzinski - Sidoti & Co. LLC: Thank you.

Thank you. Our next question comes from the line of Barton Crockett from FBR Capital Markets. Your line is now open. Chase White - FBR Capital Markets & Co.: Hey, guys. Chase White stepping in for Barton Crockett today. Thanks for taking the call. First question is do you guys have any thoughts on how the Olympics might impact your 3Q 2016 TV shopping segment, especially given that it is in the same time zone this year? And then I have a follow-up. Mindy Grossman - Chief Executive Officer & Director: Yeah. We always take that into consideration certainly and any time there is a shift in kind of media viewing, we know that it can have specific programming disruptions, particularly certain very high profile elements. I think the combination of that and as we're seeing a lot of increases in the whole new genre with the election, we know it is going to have some impact to key programming, but we try and program against that and anticipate. And we launch more digital campaigns. Chase White - FBR Capital Markets & Co.: Got you. That's helpful. And then second one, I had an unfortunate question that I hate to have to ask but investors have been concerned about it. So, has the string of recent horrific tragedies across the world, which has obviously driven increases in news viewership, have you guys seen any impact from that at all and do you think that would continue if so? Mindy Grossman - Chief Executive Officer & Director: You know, sadly when in the immediacy of something or an event like that happening, yes, of course we see it, because that's when the customer migrates to the news channels. I would say at a very high level, it goes back to my earlier comment that any time there's uncertainty and distraction and negativity and I would hate to use the word fear. And I'm not just talking for our business, I'm just talking in general obviously, that's not a good thing. You know, what we try and do is give our consumers meaning, we have a philosophy, there's never any bad news on HSN. And what we try and do is really just focus on our customer and try and be a respite for her and give her a great experience. Chase White - FBR Capital Markets & Co.: Gotcha. Thanks guys.

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

Great, thank you for taking my questions. And I will certainly add my congratulations for Judy. Would love to ask about the big July birthday month, are there any big learnings, both in terms of just how business trended all in general for such a big, important month for HSN? And then as you kind of think about the holiday season coming up, are there any particular items or categories or brands that get you excited that were launched during the birthday period that could be key as you think about the holiday season this year? Mindy Grossman - Chief Executive Officer & Director: Yeah, well we weren't down. So as I mentioned before, we definitely had strength in certain categories but pressures in others. I continue to be pleased with the beauty business. It's obviously a key business for us. We are having very good success, actually we have a program on Beauty Report tonight all around the doctors and innovation and brands. I'm also – we're also focused in the health and wellness category, digital health particularly with Fitbit, preventative, digital spa, I think those you're really going to see emerging. And then the areas of connected home, as well, for going into the fourth quarter and some of the electronic categories. And then expansion of our, let's call it, organization automotive and home solutions, et cetera and then our vitamin business. Again, but it's got to be balanced with some of the areas. I mentioned before, we've seen improvement in jewelry and productivity and profitability, but knowing that is not a real strong category externally. I think we're really going to focus on the fine jewelry business and manage it really well. And then we're enthused with apparel and accessories. But our big really fall emphasis and where that business becomes stronger, it doesn't really launch until a little later in this month. So that's basically what we've been seeing.

That's really helpful. Thank you very much.

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

Thank you, thank you. And Judy, I will tell you congratulations as well. So a quick question at Cornerstone, it's a $1 billion revenue business; thin margins, but most retail businesses are. So maybe I'll ask the question this way. Is you assuming the role a precursor to some sort of value enhancing transaction in the feature? Judy Schmeling - Chief Operating Officer, Chief Financial Officer & President of Cornerstone Brands: Well, I'm taking this role to really create value for all of our shareholders. So you know my goal is to really turn the business back to a growth trajectory. And with all the different things that I outlined earlier, obviously I am still a CFO and I think in certain ways, but I think that I'm also front facing as well. And so, again we will do and grow the business and maximize value for shareholders, absolutely.

Okay. Okay. Second, how has your customer base evolved over the past probably two years, given – has it skewed younger, given mobile has become a bigger part of the mix? This is on HSN. And given that you've leveraged social media, you called out Facebook Live, I'm not sure if you're doing anything on Periscope, maybe Messenger. I'm just curious if your customer base has skewed younger, or as well, maybe if there's any sort of shift away from more of the affluent regions like Long Island to more lower – less-affluent regions in the country? Mindy Grossman - Chief Executive Officer & Director: Okay. We have not seen any shift in the region. I mean we still have very strong market, which reflects both income and population. It's interesting at HSN, you understand it's a 40-year-old brand and as we said, we have an incredible commitment from our loyal customers. But to your point, our mobile customers are most affluent, are youngest and most diverse. So the key for us is to keep driving customer acquisition through digital and mobile in these younger segments, or even segments with the psychographics that look like our existing customers with a younger demographic, while we keep our existing customer base, which is also very important. But hence that's why all our acquisition strategies are around mobile and digital. And to your point, we are leveraging a tremendous amount of live streaming. So for example, in September, we are live again from New York with Serena Williams, but we are taking the streaming event one step further. It's September 18, so it's streaming across all our digital mobile platform, as well as other digital media outlets. And then we're also going to stream that feed on the TV screens, but what I'm excited about is there's the shoppable video experience for online viewers for the first time, which will be a virtual reality experience. And you'll be able to feel like you're there with or without a headset. And as I mentioned before, the Facebook Live, just the ones we've done have been successful. So you'll see us escalating our efforts there.

Fair enough. Just one last question on the sources of the gross margin pressure. I know you called out shipping, the product mix, high inventory reserves. Maybe you could just unpacked that for me in terms of which one had the greatest impact and which one will going forward? Mindy Grossman - Chief Executive Officer & Director: Sure. I would say on the HSN side, shipping, handling had the highest impact. We specifically did that in certain areas of our business to A; be more competitive, but to also ensure that we were limiting any additional inventory overhang going forward. We do have already, as I mentioned, some excess inventory that continues to be moved, so our goal there is to continue to try and limit that on a go forward basis, any additional buildup, if you will. On the Cornerstone side, I'd say it was both a mixture of promotional price and shipping, really because the teams were actively managing down the inventory-related to the four outdoor seasons.

Okay. Thank you very much.

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

Thank you. There's been a lot of emphasis at NAB and some other conferences on adapting programming for short form into mobile devices, really on the part of original content and on the part of advertising as well. I mean, that's a real established wheelhouse for you. Do you see yourselves going even more in that direction? I mean that's a behavioral change, particularly for younger people but of course that gradually seemingly disseminates to the upper age ranges as well over time. Mindy Grossman - Chief Executive Officer & Director: Yes, Matthew, as a matter of fact, we have released quite a number of those short form, almost DR (51:43) minimercials that are demonstrable. We've done it with the great pineapple cutter. We've done it with cookware, with Wolfgang Puck, and actually we are reallocating resources in content to be able to do more of those coming up through digital feeds. And we do think that is part of our distributed commerce strategy that you will see more of.

Got it. Thanks, Mindy. Congratulations, Judy. Judy Schmeling - Chief Operating Officer, Chief Financial Officer & President of Cornerstone Brands: Thank you.

Thank you. There appears to be no further questions. I will now turn the call back over to Ms. Grossman. Mindy Grossman - Chief Executive Officer & Director: Okay. Thank you, everyone. Congrats once again to Judy, and we look forward to keeping you up on our progress. Thank you.