Good day, ladies and gentlemen, and welcome to the Under Armour Third Quarter Earnings Webcast and Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, today's conference is being recorded. I'd now like to introduce your host for today's conference, Ms. Carrie Gillard, Director of Investor Relations. Ma'am please go ahead.

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

Thank you, Carrie, and good morning, everyone. We are a growth company. And with our 26th consecutive quarter of 20%-plus revenue growth, we continue to demonstrate our ability to drive a bigger and better company quarter-after-quarter. Our financial results are an incredible accomplishment for any brand and something that we believe separates us from others in our business. Today, I'd like to start by giving some perspective on our industry and articulate what that means for Under Armour in this moment in time. I believe we operate in a truly resilient industry. The athletic apparel and footwear business and in broader-context sports has been one of the most dynamic and strongest growing industries in our lifetime. As we continue to immerse ourselves in strategic and long-term growth, we ensure that we will continue to drive in an industry with barriers of entry today that are much higher than 1996 when I drove my old Ford Explorer door-to-door to teams selling T-shirts out of the bag. Our industry's collective ability to continue to evolve and make better products that improves an athlete's performance, bring the passion of the sports experience to consumers through our brand storytelling, and to do so with increasing profitability on a global basis is a reflection of what has been an ever-growing demand from consumers that our industry has met with outstanding financial results. Those measures of success are not as commonplace in other industries that are sometimes viewed as more stable or secure investments. Today, brands that five years ago were viewed as leaders in our field are in danger of being commoditized, disrupted, or worse, becoming extinct as technology and the way we live changes the way consumers need and value them. Our industry of sport is different. Our industry's growth opportunities are global with…

Thanks, Kevin. I would now like to spend some time on reviewing our third quarter 2016 financial results followed by our updated outlook for the remainder of the year as well as our long-term outlook and initial guidance for next year. Our revenues for the third quarter of 2016 increased 22% to $1.47 billion. On a currency-neutral basis, net revenues increased 23% compared with the prior-year's period. Our ability to deliver another quarter of consistent growth is a direct result of continued investments we have made in the business to meet consumer expectations through categories, channels, and geographies. As we continue to navigate through the changing dynamics of the North American retail landscape, we remain focused on solving problems for athletes all over the world and meeting the consumer with premium compelling product wherever they are interacting with our brand. During the third quarter, our wholesale revenues grew 19% to $1.01 billion. Our direct-to-consumer revenues grew 29% to $408 million, representing approximately 28% of total revenues for the quarter. During the quarter, licensing revenues grew 21% to $29 million and Connected Fitness revenues grew 40% to $20 million. On the product category front, apparel revenues increased 18% to $1.02 billion compared to $866 million in the prior year's quarter, led by consistent growth in our sport categories, including men's training, women's training, golf and team sports. Third quarter footwear revenues increased 42% to $279 million from $196 million in the prior year's quarter. Within running, we saw strong global demand for the brand, led by two of our new $100 price-point product offerings, the Bandit 2 and Slingride, showcasing our continued focus and investment in this key category of long-term growth. In basketball, the Curry signature line continues to drive strong growth for the Under Armour brand. Our accessories revenues…

Our first question comes from the line of Michael Binetti with UBS. You line is now open.

Hey, guys. Good morning.

Hey, Michael.

Kevin, let me – I'm going to start with a question for you Kevin. Can you just help us better understand within the context of the longer-term guidance, why you don't think you'll be able to hit the $800 million in operating profit income, and maybe what has changed that gives you confidence in hitting the $7.5 billion in revenues, wow, but not the $800 million in operating income?

Yeah. Thank you, Michael, and this is obviously an area that I want to spend a little time on and go deep, so give me a few minutes to craft this for you.

Sure.

So, as Chip just said in his commentary, we talked about building a business as big as our brand. We've had our eye on $10 billion, that's the way that we see our company, I think it's the way that people view and judge us with $7.5 billion being our next milestone to be hit by 2018. And again, we want to reiterate that we're on track to hitting that goal. But there are a few factors that led to the decision to modify the operating income for us, since Investor Day September 2015. So what's happening and what's different? First of all, in North America, it's a place that provided incredible air cover for our brand for a very long time and I think like we're seeing in a lot of places that, that is modifying, it's changing. In the investments that we've made over the past 11 years as a public company, we've seen that our business, thankfully, has evolved from being strictly a North American wholesale apparel brand into a global sports brand that also has the ability to claim international and footwear as probably two of our largest and greatest opportunities for growth. And all the while, I want to be clear, with apparel remaining incredibly profitable and still growing at the tune of 18% in just the third quarter for us. So, there's not an end to the North American apparel story. That continues to march on for us as well. We just have other opportunities that are outpacing some of that growth. So some of those opportunities, like footwear and international, they are exceeding what we're putting up, in 24-plus percent topline growth as a company and that change in mix is modifying our gross margin story in the short-term. That means while we're…

Thanks for all the detail, Kevin. I'll re-queue with my other questions. I appreciate it.

Thank you.

Our next question comes from the line of John Kernan with Cowen and Company. Your line is now open. John Kernan - Cowen & Co. LLC: Good morning, Kevin. Thanks for taking my question.

Thank you. John Kernan - Cowen & Co. LLC: It seems like product flows into the retail channel and your wholesale channel are changing pretty dramatically, and we've heard from some of your competitors. And it just seems like there's a need for speed out of the supply chain and the sourcing from all the brands. Can you just talk about the change in product flows and how it's going to affect your business going forward?

I mean, product flows for us, there's a lot of ways for us to think about it. So first of all, we're seeing a tough story that as we look or think about North America, you've heard a couple of people talk about it. And again, it's nothing's going away, but it's definitely been reflective in just some of the bankruptcies and the other things that we've seen recently. The people we're doing business with, I believe are doing very well. They're getting very smart about the way they're managing and running their business. But it's definitely, you know, you're not finding our accounts that are taking big inventory positions and betting on the cold weather. So, those are the things that are leading for us that's requiring us to run and to drive a better business. Today, I would define Under Armour as a great brand and as a great brand with a – but probably a good company. The opportunity we have is things like what we see with some of the speed to manufacturing. Things like recently when we announced our partnership at City Garage here in Baltimore and when we talk about a local-for-local strategy, which means bringing manufacturing back to the United States and again that's not a made in the USA initiative as much as it's an initiative for us about making great product anywhere. It's that the people of America want product made in America, the people of Europe want the same, the people of São Paulo want products from Brazil, so we're going to continue to answer that and look to drive on that answer. But there's a lot of investment on the front end. And the good news is that the sad thing about our industry is that a shirt and…

Hey, John. This is Chip. A couple of things. John Kernan - Cowen & Co. LLC: Hey. How are you?

As we start to get to $10 billion, there's a couple things that will happen. One, the gross margins, we should start to get expansion on the gross margins and we'll start to get that because we won't be faced with as much of a mix shift that we're faced with today and the improvements we're seeing on the cost side of the house, we are seeing those today and they'll continue; but over time, as we start to gain more and more scale, we'll see that gross margin improvement. And on top of that as we get more into lifestyle, we'll see more gross margin as well. So, once we start to get towards $10 billion we'll see gross margin. At the same time, that's when we should really start to be able to leverage our expense structure. We're investing across the world. We're investing in offices, we're investing in IT systems, we're investing in distribution capacity. All of those things are happening today and will continue to happen over the next couple years, but we will start to see that leverage. So, it becomes sort of a perfect storm, once we get to $10 billion and we'll start to see operating income margin expansion. And I think we'll head towards more the premium level versus the other person or the other competitor that you're speaking with. John Kernan - Cowen & Co. LLC: Okay. Thanks. Best of luck.

Yeah. Thanks, John.

Our next question comes from the line of Erinn Murphy with Piper Jaffray. Your line is now open. Erinn E. Murphy - Piper Jaffray & Co.: Great. Thanks. Good morning. I guess just on that last point Chip, for you, on the gross margin, the analyst that you talked about, 49% gross margin and now it sounds like you're saying that you need to get kind of bigger scale towards that $10 billion mark to really see that gross margin pick up. I mean, can you just help us think about at least over the next couple of years from a planning horizon perspective how should that gross margin line metric look?

Yeah, Erinn. Well, first off, in any given quarter there will be noise around liquidations or FX. So that can happen in any given quarter, but over the course of the next couple years, we as a company will probably see flat gross margins. We're going to have mix as a headwind as we continue to grow our footwear at two times to 2.5 times our apparel and accessories business and the disparity between those gross margins creates a mix shift for us. At the same time, we're already seeing improvements in our footwear margins and we'll continue to see those improvements. And so net-net, we think we can overcome that mix shift through the improvements we're seeing on the costing side for the next couple of years; but net-net, it will be flat. Then as we start to approach $10 billion as I mentioned earlier, that's when we believe that we will have the scale and we will have a much more significant mix at that time of footwear that you'll start to see an expanding gross margin come $10 billion. Erinn E. Murphy - Piper Jaffray & Co.: Okay. That helps.

Erinn, we're also – I mean, I think it's just good to drive home the point about footwear and the opportunity we see there. So, Under Armour today, we're in the low to mid-30%s when it comes to our footwear gross margin that nets out compared to our competitors which are 10% or roughly 1,000 bps in front of us. And so, we've made great strides in the last couple of years actually taking hundreds of points of gross margin and calling that back and we see great opportunity as well. And so there's no secret sauce that someone else has that we don't. It's been time, it's been energy and experience and frankly having just gotten back from a trip from Asia about four weeks or five weeks ago and seeing the investment that our manufacturing partners are making us throughout China but also through Vietnam and the Philippines where you're seeing a lot of these new facilities going up, there is a great belief in a company and a brand like Under Armour that just a couple years ago, I think footwear is important to lay out. Last year, we made 30 million pairs of shoes. 2016, we'll make 40 million pairs of shoes. Obviously, you hear how bullish we are in footwear, so that number is increasing. And again, that's impressive, but it still compares to the hundreds of millions of pairs of shoes that are made by our competitors. So as we build scale, this will massively come on board as well it will help with people like Colin Browne, who is our new President of Sourcing, in some of the things that we'll do driving some of these initiatives. So, we see there's great opportunity in gross margin and this is nothing that we're laying back in – there's no excuse for what we're doing with operating income as it relates to – or the way that we're attacking gross margin across the board. Erinn E. Murphy - Piper Jaffray & Co.: Okay. That's helpful. And then just on inventory up 12%, so fairly lean. I mean, do you feel like you have enough inventory if you go into the holiday season? And I think you're still planning for 20% growth in that Q4 and early part of 2017. How should we just think about that at the end of the quarter as well?

Hey, Erinn. It's Chip. We feel like we're in really good shape from an inventory perspective. We did have very large growth rates over the course of late last year and then the early part of this year. So that growth rates come down, but the inventory is in great shape, and the inventory we have, we do have availability in the event that we all hope that it gets cold and it'll be nice and we do have the inventory to supply for that. Erinn E. Murphy - Piper Jaffray & Co.: Okay. And then just last, Kevin, for you on women's. I didn't hear you talk much on this call on the women's opportunity. Can you just flush out where we're at now and kind of where you see that as you think about your 2018, $7.5 billion goal? Is that still unchanged in terms of the opportunity?

Yeah, completely. So, I want to be clear is that women's remains one of our brightest opportunities for growth in our business. Women's is still growing in the quarter, up 17%, I think 18%. And again that the heart of this is category management. I spoke about it in my prepared remarks and we've done that with women's to specifically call it out and make sure that it gets the emphasis it needs. Pam Catlett is leading that. She's an industry vet and has been a complete pro in bringing the pieces together, but there's a lot of pieces to bring together. Probably the best thing I could say is, when you talk about our women's business, we have $1 billion women's brand. It's taken us one heck of a long time to get here, but we're incredibly proud of what that means. And but, you know what, I think probably looking at women's through the lens of – I gave the example about footwear in one of my earlier answers, and we have six people in our women's footwear team. We just built our first Women's Last, last year for the first time and those are the things from an operating income standpoint. I want to say is that when people say you don't have enough – people dress toe to head. It's the way they start with their shoe, but if the shoe isn't right, if the fit isn't right, if the color isn't right, if we don't have the right team, you know, the reason we didn't build the Women's Last before is because we were focused on the ability that we couldn't afford it. And so we're making a lot of those small decisions right now that we truly believe that looking at 2017, 2018, making the investment as unfortunately and fortunately because our growth rate is so great, it creates that drag. But making this right investment in footwear is important. So we go back with women is that one thing we think is incredibly important is that the football cleated opportunity and what we're doing being the number one cleat there isn't doing much for the women's category. But the confidence that we're demonstrating in running from our knit products, this is the – again, this will be the first year in the market that we'll have that Women's Last on people's feet, on women's feet and we also think that as we continue to drive a better product for driving both performance, style, strength and beauty, the focus is we'll have. And so I think we've got a terrific team in place. We are investing in our women's team as well. We think footwear will be one of the catalysts for it, but achieving $1 billion business in women's is a pretty big feat and it's something we're certainly not stopping or satisfied with. Erinn E. Murphy - Piper Jaffray & Co.: Thank you. And best of luck.

All right. Operator, that's all the time we're going to have today for questions.

Okay. I'd like to turn the call back to Ms. Gillard for closing remarks.

Thank you all for joining us today on our call. We look forward to reporting to you our fourth quarter and year end 2016 results, which tentatively have been scheduled for Tuesday, January 31, at 8:30 a.m. Thank you, and have a great day.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, and you may now disconnect. Everyone, have a great day.