Good day, ladies and gentlemen, and welcome to the Under Armour, Inc. Fourth 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 be given at that time. As a reminder, this call is being recorded. I'd now like to turn the call over to Lance Allega. You may begin.

Thank you, operator, and good morning to everyone joining us on today's call to discuss Under Armour's fourth quarter 2016 results. I'd like to remind everyone that participants on this call will make forward-looking statements. These statements are based on current expectations and are subject to certain uncertainties that could cause actual results to differ materially. These uncertainties are detailed in this morning's press release and documents filed regularly 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. Additionally, we may reference certain non-GAAP financial measures. We provide a reconciliation of non-GAAP financial measures in our earnings release and in the electronic version of portions of the script from today's call, both of which are available on our website at uabiz.com. Joining us on today's call will be Under Armour Chairman and CEO, Kevin Plank; our CFO, Chip Molloy, and Dave Bergman, Senior Vice President of Corporate Finance. Following our prepared remarks, we will open the call for questions. And with that, I'll turn it over to Kevin Plank.

Thank you, Lance, and welcome to our team. As many of you know, Lance has exceptional experience in our space, and we believe that his leadership along with Carrie Gillard will enable us to further strengthen and better communicate our story moving forward. In addition to our earnings results this morning, we also announced that Chip Molloy has decided to leave Under Armour for personal reasons. With this marking Chip's last call, I'd like to say thank you and wish him well in his future endeavors. Chip will continue to serve in an advisory role for a period of time. Dave Bergman, our Senior Vice President of Corporate Finance, has been named as our acting CFO effective February 3. With more than 12 years at Under Armour, Dave has incredibly deep experience across multiple senior roles within the core financial functions of the company. The board and I have high confidence that he is exactly the right person to provide continuity, and ensure no disruption to our operations. And with that, good morning everyone. 2016 was a strong year of performance for Under Armour. We marked our twentieth year in business. Added sports marketing assets like Cal Berkeley, UCLA and the Southhampton Football Club in the English Premiership. Announced a new relationship with Major League Baseball. Debut the Under Armour Sportswear collection, gained incredible brand visibility at the Rio Olympics with U.S. gymnastics and Michael Phelps. Approached 200 million users in our Connected Fitness community, and hit $1 billion in both our footwear and women's businesses. These are just some of the outstanding accomplishments that we had in 2016 that we're fiercely proud of as a brand. However, 22% topline growth driven by a 15% increase in apparel, more than 25% growth in our DTC business, and 50% growth in…

Thanks, Kevin. Today, I will review our fourth quarter and full year 2016 results before handing it over to Dave, who will provide an updated outlook on 2017. Starting with our fourth quarter. Total revenue was up 12% to $1.3 billion. Clicking down into revenue by product type, for reasons Kevin detailed, apparel revenue came in lighter than we had originally anticipated with an increase of 7% to $929 million. We did see strong results from our sport categories including golf and basketball. Footwear revenues increased 36% to $228 million, as both running and basketball delivered strong growth driven by more premium product offerings. And, revenues for accessories increased 7% to $104 million with solid results in our bags and headwear businesses. Looking at revenue by channel. Sales to our wholesale customers were up 5% to $742 million, a result moderated by the challenges in our North American business that we've spoken to today. Our direct-to-consumer revenues grew 23% to $518 million, representing approximately 40% of total revenues for the quarter. We finished the quarter with 241 owned stores globally, consisting of 188 Factory House and 53 Brand House locations. Revenues for our licensing business grew 20% to $30 million, and Connected Fitness revenues grew 8% to $18 million. On a regional basis, North American revenues, which are 82% of global total, increased 6% to $1.1 billion. It's important to note that North American apparel is still our largest and most profitable business by far. Accordingly, less than expected growth in this area disproportionately pressures our overall growth rate which we saw in the fourth quarter. Our international business continues to deliver strong top-line results as we elevate and expand our brand reach around the world. With a 55% increase to $215 million, our international business reached 16% of total…

Things, Chip. Starting with revenue, based on the macro factors we've discussed on today's call, and proactive actions to manage inventory levels down in the marketplace, we expect full year revenues to be up approximately 11% to 12% to nearly $5.4 billion in 2017. Excluding currency impacts, revenues should be up about 12% to 13%. Similar to 2016, we expect our footwear, international and direct-to-consumer businesses to be the largest drivers of our topline results outpacing the total rate of growth as we further scale and expand these businesses. Next, gross margin. We expect our 2017 gross margin to be down slightly, as expected benefits and product costs are offset by anticipated changes in foreign currency and continued sales mix shifts as our footwear and international businesses continue to outpace the growth of our higher-margin apparel and North American businesses. Changes in foreign currency are expected to pressure gross margin throughout 2017, but we believe we will be able to offset some of this margin pressure through our continued focus on product cost improvements along with reduced promotional activity, especially in the back half of the year. Given the near-term investments that we are maintaining in SG&A, we're expecting operating income of approximately $320 million in 2017. You've already heard it a few times today, but I will make the point again. We are a $5 billion business that has been rapidly investing toward an infrastructure capable of supporting a $10 billion company. Along these lines, we remain confident in our long-term strategy and have a pathway to get us there. At the core of this journey is a constant, unwavering commitment to protect and do what's right for the brand. Accordingly, we believe it is prudent to maintain our key investment strategy focused on growth, share and scale. However,…

Our first question comes from Omar Saad of Evercore ISI. Your line is open.

Good morning, Omar.

First one, Kevin, if we think back to your last Investor Day, and you guys really pushed the accelerator pedal looking across the board at all the different various opportunities ahead for the company, international, women's, e-commerce, youth, Sportswear, Connected Fitness, footwear, the new headquarters, on and on. At this stage given the bump in the road here, is it time to kind of refine that focus, and think about maybe the top two or three, or three or four, growth opportunities that are most scalable in the next few years and then allocate both financial and human resources accordingly? Or is it kind of stick to that same plan?

Now I want to be clear that, first of all, the investment thesis that we have of investing in the growth drivers, and we talk a lot about the success that we've seen in footwear, international, DTC and so we're of course doubling down on those. But some of the other bets have not come to fruition yet, and the ones that we are still investing and are still curating. At the same time, watching things that – we made similar comments years ago in talking about things like our footwear and our women's business which both crossed $1 billion this year. So I think that we've built – when we established a lot of credibility, we're showing you that when we put in and make investments that they definitely bring return. And some of them, frankly, haven't happened as quickly as we wanted to. When we think about some of the shifts of what we've been investing in, we were a North American company. And go back just, 2014, 9% of our business was outside the United States. In 2015, it was 11%, and 2016, 15%. As we look forward to 2017, we expect that number to be approaching and crossing 20% of our business. And so the move from North America to rest of the world is something we're proud that we've invested in. And we think it's prudent to continue to make those current investments. The move that we made from performance in the lifestyle is one where this began more than three years ago, and we still see that we're not quite there with everything that we want to do, but we've made massive strides with the launch of Under Armour Sportswear, the leadership we've put in place in building out the team. And then also…

Okay. Thanks. And then could I ask just another question, maybe if you could expand on a comment you made I think in the prepared remarks around some trends going on in the apparel business, maybe moving away from performance more to fashion or lifestyle? I know that UA Sportswear line is still kind of pretty nascent, but maybe elaborate on what you're seeing from that standpoint. Is there some pretty deep going on at the consumer level? A shift towards more fashion-oriented athletic apparel versus performance oriented? Obviously, Under Armour is known for its technical performance. And if this is the case, how do you evolve the brand a little bit to be really relevant on both sides of that fence?

Yeah. I don't think there's – I think that performance was something which was, when I look back at it, we're a company that was founded in the equipment section of a sporting goods store. and then we evolved to the apparel section. And then all of a sudden it became something that wasn't just for a football player, or a baseball player, or a lacrosse or soccer player, but something that could be worn skiing or could be worn out. And so we've watched this progression over our 21-year history. And I feel like it's still in the process of happening. Performance is certainly not dead. Performance is something that is actually a requirement. It's actually just expected, and it's almost given information now. And so where I believe some of the things that we saw in the fourth quarter, which is where we've had a base of a core basic business, is it's no longer just a few brands in sporting goods that are participating in this athletic inspiration. And so there's really a lot of competition coming from everywhere, but without question we believe that we're in the perfect position to continue to win. We need to become more fashionable with the products that we have out there. And one of the things we found is that some of the core basics were some of the challenges that we saw, is that we are counting on core basics as we have in years past to do more work for us. But the consumer today frankly has more options, and frankly most of those options are from good brands that we compete with, that are heavily discounting as well. So what you'll see is that I don't think it's one shift of abandoning one for the other. Obviously, with things like the investment we're making in UAS (31:30) in sport lifestyle in general, but we need to become more fashion. The consumer wants it all. They want product that looks great, that wears great, that you can wear at night with a pair of jeans, but that also does perform for them. But the performance has just become a bit of a given information. And so I think you'll see us continue to react to that, and hopefully I think you'll see us continue to lead in that. So our product must be at that point where it's not just a wearing occasion on field or for the quarter for the gym, it must be a wearing occasion that satisfies the consumer whether they're going out or they're going to school.

Thanks. Good luck.

Thank you, Omar.

Our next question comes from Camilo Lyon of Canaccord Genuity. Your line is open.

Thanks. Good morning, guys. Kevin, you've given a lot of detail today, and I appreciate that. Just curious to get your thoughts on how you gain comfort over the next few year period that North American market for apparel is not undergoing this just kind of deceleration from the furious pace that they have had growing (32:37) out over the past 5 to 10 years. In that you have the elements in place to go after where that next growth curve is really going to come from. There's obviously been a lot of near-term bumps in the road with the bankruptcies that have dislocated demand. So how do you expect to put the pieces together as you look out and make these investments that you need to make, to make sure that you're going after where that consumer is going ultimately?

Yeah. So I think, without question, I want to start and I want to agree with the fact that what's happened at retailers, that retail is without question being disrupted. But we're not going to sit here and tell you and hang it on any one factor. The fact is as we look back on the fourth quarter, we believe that we own a large part of it. This is not something that we are just saying promotions and the consumer environment, all those things are very, very real, but we could have done a better job with our merchandising mix to be more proactive and more thoughtful about where they were going. But retail is being disrupted, and so whether it was what we saw in 2016 and frankly some of the indications we've seen with some of the filings going into 2017, so we need to be proactive with that and be thoughtful about that. The fact of the matter though is that the consumer, they expect more today. They expect speed and convenience and best price and value, and they expect it the next day. So that choice of newness and customization is something that we need to react to and do a better job of. This idea though is we think that the cycle that we're living in from retail and inventing the next big thing, it's going to come from much closer to the concentric circle versus something built frankly off of a product that has to be hot, or an athlete or a celebrity, or a product that just happens to be about innovation. And so as I was giving in the last answer, I think that the combination of those two things is going to be critical as we look forward. And one…

And then just how you – you talked about leaning on footwear and international and DTC, and actually that's where the growth opportunities lie. Does this force you, or does this make you want to speed up the international penetration? You clearly have an opportunity in China that's in the early stages, if that, I think it's less than $200 million business for you. So does this make you want to lean on expanding the brand faster as you are going to reset the North American market and your position in it?

Let me let Dave start with that. Go ahead, Dave.

Yeah, Camilo, international is an area that we've definitely been investing in and doubling down on, and it's really, really been paying off for us. We've seen over 60% growth over the last three years. From a percentage of business, we've gone from 9% of our revs in 2014 up to 15% of our revs in 2016, and we're planning it to potentially exceed 20% of our revenue in 2017. Should actually cross $1 billion in 2017. So it's been a great area for us. We feel particularly strong on China, very bullish on that market. It's been one of our highest growth and becoming very, very profitable for us. A lot of great, great relationships that we're building in that market with great leadership. Europe as well. We've had some great strides there also, making some good traction with the right marketing investments there. And then Latin America, which is kind of our newest region, is one that we're still cultivating, but it's growing well. And if you look at our total international profitability, year-over-year we're seeing significant improvement there. So it's a great play for us, and we're going to continue pushing hard in that area.

And the global market, Camilo, it's very hungry for the Under Armour brand. This is one of the places where we must be measured, and I think we want to be thoughtful instead of just opening doors. We've seen this trap. You're seeing it play out a little bit here in North America. So, I think one of the benefits we have as a company with just under 300 company-owned stores and a little less than 600 total stores that we have with our partner doors, et cetera, around the world, that's a very different profile than the other two major players in our space. And so, I don't know if anyone can invest heavily enough in digital right now and what that footprint's going to look like. But I've got a feeling that the moment and the point where the consumer decides to transact for any brand is going to continue to shift. And we feel very good about frankly the lack of commitment that we have with leases and other things and the ability for us to draw and frankly, paint the picture of what the retail consumer brand of the future is supposed to look like.

Thanks, Kevin. Best of luck.

Thank you, Camilo.

Our next question comes from Michael Binetti of UBS. Your line is open.

Hey, guys. Good morning. Thanks, Kevin, for all the outlook on the longer term. The comments are helpful there. It sounds like you still feel pretty good about the wide space opportunity, and it doesn't seem like you guys are isolated in your thoughts on the North American wholesale market. But if we could just maybe look at the gross margins again in 2017, I would've thought that – maybe I'm wrong here, but I would've thought that that would largely be down next year due to more markdowns. And then your guidance and inventory seems to sound like it will be improving through the year relative to the rate of revenue growth. What do you think is the realistic near term recapture rate for the gross margin after 2017 after some inventory clearing?

Yeah. Michael, this is Dave. Gross margin in 2017, we're definitely going to continue to move forward on product cost improvements, and our internal margin from that will continue to improve. We should see a little bit less pressure from the promotional environment, especially in the back half of the year, but we'll still see a lot of pressure from that in the front half of the year. In our DTC, expansion is also going to be a little bit of a lift to gross margin, but against that, as we continue to mention, is the footwear growth and the international growth. Those have meaningful differences in our gross margin versus our apparel and our North America business. So as those continue to outpace, those are going to be big pressures that we continue to face over the next few years. And right now, foreign currency is also little bit of a challenge for us. Not as big as maybe some others with our percentage of international, but it's still definitely something that we're dealing with. So, in 2017, we're doing a lot of the great things, but we're still going to expect to see gross margin a little bit down and then probably more in the near term seeing that flatten out a little bit. But there's definitely opportunities longer term, and we've got a lot of people focusing on the right areas there, so we're looking for that in the longer term.

And if I could just ask you about revenues in 2017, it sounds like a lot of the – so maybe there's some inventory in the marketplace, and you gave some helpful comments on mid-single digit rev growth in the first quarter. But if I look out beyond that a little bit, does the second half start to look more like the revenue growth rate that we were looking at 90 days ago? Do we start approaching 20% again in the back half just so that we can think about what's causing you guys to push pause on the revenue growth guidance for the front half of the year? And then the shape of our models as we look out a little bit?

Yeah, Michael. We're not ready at this point to give quarterly revenue guidance, but Q1, we did give our guidance out. We're going to continue to look at the back half of the year. I think there are more opportunities in the back half of the year than the front half of the year, but we're going to avoid giving guidance by quarter at this point.

Okay. I appreciate the help. Thanks, guys.

Thank you, Michael.

Our next question comes from Bob Drbul of Guggenheim. Your line is open.

Hi. Good morning.

Good morning.

I just had two questions. When you look at the outlook for the women's business, can you just update us on your thoughts on the opportunities there and the magnitude there? And the second question is, in a tougher top line environment for the company, how committed do you guys remain to the Connected Fitness investments that are ongoing?

Yeah. So let me start with women's is that, again, we're really proud that women's hit that $1 billion mark for us, which is I think important on many levels. We look at the way in which we hit it though, and we still, even in our women's business approach it from a very much performance-based brand. We think there's a tremendous opportunity and the broader investment the company is making around things like lifestyle, are really going to pay dividends for us there. We remain incredibly bullish on women's, and this is led by leadership. Our shift to category management as well gives us and puts us in a position I think to be more focused on what we're doing. And just to give you some perspective on how we're building out rounding our women's team, one of the analogies that I used in the last call was that even something as much progress as we made in our women's footwear, we've got six people on our women's footwear team comparatively to the competition that probably has dozens or hundreds in the same type of category. We've been able to double our women's styles. We've got a couple of franchise products that also share between men and women. And we think that we couldn't be more confident, but it's one of these things that continues to take time. And so that's distribution, that's placement. But we've got to deliver. We've got to do a great job in women's with the right merchandising assortment on the floor just as we do for men's. As far as our commitments, the one thing that we said on one of the other questions was about our ability to force rank, our ability to make tough decisions. As a company, I think that's one…

Great. Thank you very much.

Thank you.

Our next question comes from Jonathan Komp of Robert W. Baird. Your line is open. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Yeah. Hi. Thanks. Kevin, just wanted to ask maybe a bigger-picture question framing up this year. If you think about maybe sitting at this place in this time next year, a year from now, do you think the business will be back on track to somewhere closer towards the long-term growth targets? Or maybe what factors do you think would prevent or keep you from getting back to those types of growth rates?

I think that, first and foremost, we talk about getting back. I think we've done a good job of changing the expectation of the way that people think about growth. In our sector still, even at the latest outlook where we said we're not going to look beyond the end of 2017, we're still talking about 12% growth with a business that will be 80%-ish here in North America. So we've got a tremendous amount of growth. We've got managing a tremendous amount of growth. And part of the human side of this too is going from a small business, to a medium business, to becoming a large business. We've been living and we've been dealing with that. As I look out 12 months, I want to tell you first and foremost that I'm focused on the day-to-day. I'm focus on today and tomorrow. We feel very good about our outlook of where we're going. But, yeah, this isn't saying that Under Armour will never do 20% again. I mean you'll see 20% growth from this company. But we want to be measured, and we want to be thoughtful, and the last thing I ever want to do is try to chase that number. And so a lot of our revenue outlook that we provided to you today was based on hopefully the explanation of a mature management team with a very young company. And I think that's us being prudent about the places where we do want to make sure that we're keeping our retailers, keeping our floors clean, making sure that we're not defined by basic product that needs to simply compete on price. Our product competes on innovation. Our product competes on newness and freshness. And so, when we see those market dynamics changing, we don't like…

Well, I think we're reviewing really what happened in the fourth quarter and first quarter together. And so as we think about it, is how do we ensure that we've got a healthy distribution channel? And 60% of our business is U.S. wholesale distribution. And so we've got to be thoughtful there about the way that we approach the marketplace. But from a leverage standpoint, that begins with innovation. We've got two new franchise products we'll be launching this spring as well with our Banded 3 (48:48) and our Gemini 3 both coming out, running shoes above $100, something we couldn't make that claim even 18 months ago. We've got innovation from our new Threadborne initiative to Siro. So I think it all begins from a product standpoint, or a product perspective, and we feel really good about what we've got in the pipeline. But we want to be measured. I think right now as we're coming through this and as we thought about what's the best way to communicate, and I want to be clear. We understand the amount of information that we are giving the Street right now. And we've got that again, that 11-year track record that we speak to and say we're not happy about it. And I want you to know, we're not happy about the results that we're telling you right now. And we expect to continue to deliver as we always have. And so 2017 will be no different. And so we've laid out some marks of what we can do, and where we believe that we can continue to meet and beat expectations. And looking at the year through a very healthy lens. So, I'd answer you in sum that with yes, great innovation. Those will be the accelerants to our growth. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Okay. Thanks, and good luck.

Thank you.

Our next question comes from Matt McClintock of Barclays. Your line is open.

Hi. Yeah. Good morning. Kevin, I wanted to focus on DTC for a second because there is a lot of disruption in the U.S. environment specifically, and you talked about one of the lessons learned was speed. Or at least I believe you brought that up, speed. As you think about the need for increased speed and you think about the holes that may be – that are now presented from some of the disruption in the U.S., I mean does that make you want to accelerate the growth of DTC as a channel specifically?

Well, number one. As DTC relates to e-commerce, I don't know if anyone can imagine that they can put enough money toward their digital businesses today. As I answered that earlier question about Connected Fitness, that is an investment in our digital business, in our own direct-to-consumer and e-commerce. And so we feel very bullish, and we feel like (50:56) really unique positioning unlike anyone else in our industry. And frankly I can't think of any companies that have sort of that amount of data flow to understand their consumer better. But as we think about the experiences first and foremost, it's about having a great consumer experience. It's about when people show up, exciting them and helping them choose to transact, and doing it in a way which either; a, forces them to get up and go to brick and mortar; or b, it help them choose to transact on a phone. And so when I describe our DTC business, I think about e-commerce, full price, and outlet. And probably as recently as a year to two years ago, I'd probably give those in full price, out, and then e-commerce. And so that world is here, and it's here to stay. And this is not to say that we think that retail is dead either. So we do believe that the move for us of being able to control our destiny. And we talk about upside. Our direct-to-consumer channel last year in the fourth quarter was up 23%, and it was up 27% for the full year. So we're still seeing great momentum there, and DTC represented close to 40% of our total business in the fourth quarter as well. Controlling our own destiny is something which is, we like to do, but the fact is there are really good partners. But one of the shakeups that we're seeing happen at retail right now is that some are going to win and someone are not going to win. And so we want to make sure that we're getting behind and placing our bets on those great retail partners that are creating incredible dynamic retail experiences. And we have an obligation to them too to make sure that we have great dynamic product that sits on the floor, and will allow them to sell through at great turn and full price and full margin. So, I don't think any of these things – I think the way that we're viewing it is, of course, we like controlling our destiny, but we began as a wholesaler, and we'll always have a wholesale aspect to our business with the best partners out there that continue to prioritize us and put us and present us in a way which we think tells and helps explain the great products that we have and doesn't just differentiate us by price.

Thanks a lot, Kevin.

Thank you.

Our next question comes from John Kernan of Cowen and Company. Your line is open.

Hi, guys. Good morning. Thanks for taking my question.

Hey, John.

Two questions. Can you just talk about what your assumptions are for apparel and footwear as we go through 2017? And what categories are going to really drive you? What type of growth in those categories is going to drive towards that $10 billion target?

Hey, John, this is Dave. When you look at apparel and footwear, they're both going to be growing clearly for us. Footwear will definitely continue to outpace apparel to a pretty good degree. When you think about it throughout the year, the footwear growth will be a little bit less in Q1 for us than full year. We're comping a pretty high 64% Q1 2016 growth rate in footwear. And the majority of that growth in North America is going to come from new distribution in DTC. International growth is going to be a little bit more weighted to footwear than the North America growth, but again, footwear is definitely going to be overdriving apparel.

And I'd like to add is that as we think about apparel and footwear, one of the big themes that I want to make sure we get across in this call and your communication is understanding that our commitment to editing. The ability to drive higher revenue is not about making more stuff, it's about having less stuff that's more curated with a stronger point of view. What brands are required to do is provide two things: personality and point of view. And I think it's one thing you've always been able to count on from us. We see that happening. We see that growing, and it's one of the things that led to the 50% growth that we saw in footwear in 2016. But we know it's not entitled to us either which is one thing that says, we want to make sure we only have the best products and editing that line to the best pieces is what matters. And so there's lessons to be learned as we look back on the successes and we look back on some of the misses that we had, but net-net, we're a better, stronger company. And when we look at things like footwear of not only being able to drive scale and saying, are we making a shoe that a consumer wants to buy? But being able to drive leverage with our manufacturing partners and things of – this year for the first time we'll make more than 50 million pairs of shoes. And that's something that helps us in that longer supply chain and ultimately help us with things like gross margin. And so we're not talking about footwear being a materially smaller gross margin than what we're doing in apparel. And so, all these things I think are part of the natural process and progression of a company. I wish I could've read a book on it, but I think we're living it real time right now and we're giving you the best information we can. And you should know that you've got a management team and a commitment that we're going to run like hell for our shareholders.

Just one final question for me. CapEx this year around 7% of sales, a lot of investments in growth and working capital. There's quite a bit of cash burn. The debt is growing on the balance sheet. Given the investments that likely need to go into digital and DTC, where do you think CapEx should trend over the next few years?

Yeah, John. This is Dave again. CapEx is an area that we're really, really digging in deep on. We're challenging every CapEx dollar spent to make sure it really aligns with our longer term strategy. So as we look through that, there's some areas that we're going to be a little bit smarter about. North America Brand House builds in 2017 – we're not going to do as many as we've done in 2016. We're going to be a little careful in that retail environment. Also, being more prudent about the different areas that we have a footprint in. Looking at our office space, looking at our real estate, looking at our distribution centers, and really trying to make sure that we can stretch out those spaces as long as possible and being really, really prudent about when we need to expand and take on more space. So we're looking across the board from that perspective. This year, we are targeting a $400 million CapEx number. We don't see that massively increasing in the next year or two. We're going to continue to try and manage and prioritize those spend areas with a big focus on protecting the areas of long-term growth.

Okay. Thanks.

Our next question comes from Robby Ohmes of Bank of America. Your line is open.

Thank you. Thanks for taking my question. Kevin, I was just curious, kind of a follow-up question on international. When you guys look at the international business, whether it's Europe or China, some of the stuff you talked about for North America, I think you mentioned core basics not coming through as you guys were expecting, the need for more fashion, et cetera, and also the promotional environment going on over here. Can you give us some color on how much those things are playing out in both Europe and China right now?

Yeah. I think we're having – we're seeing a very different picture. I want to make sure that I underscore for the group that listens, is that this is a great American brand. And it's in the process of becoming a great global company. And the demand that we're seeing from outside the United States was 63% growth for the year, consistent in building off the 59% – 69% growth that we saw in 2015. It is something that is very real and very happening. And managing and curating and taking care of that brand is something important. And, yeah, there is a great sense. And I don't know if I'd say it's greater than what we're seeing in America, but in categories that you've heard where we fought, and looked like in China our Curry product has done incredibly well and blown through our plans and our expectation. And that's because of probably two former tours that we did with the reigning MVP, the two-time reigning MVP, but we'll continue to do that. I think at the same time, Robbie, is we want to stay measured. Is that we've got a great leader in our Head of Revenue, Charlie Maurath, who joins us from 20-plus years in the industry, and knows the global markets better than anyone else. And so establishing that global footprint as we now sell in more than 60 countries, it's taken us a long time to do that and to become – get to scale. And at the same time, as good as we're seeing the market and the reaction to UA in China, as good as we're seeing the reaction of now 13 years or 12 years having built in places like Europe, we're still seeing things like in Latin America that it's a…

Great. Thanks. That's really helpful. Thanks, Kevin.

Thanks, Robby.

That's all the time we have for today. I'd like to turn the call back over to Kevin Plank for any closing remarks.

Yeah. I'd like to thank you all for your time and attention this morning. I'm extremely proud of what our team has accomplished in 2016. And as a brand, we've grown up very, very quickly. With quick growth comes lessons. And to be sure there were some valuable lessons in the fourth quarter, we learned lessons. Ones that we'll use to reduce future vulnerability, ones that we'll use to ignite and inspire even greater magnitude of hunger and humility throughout the organization, and ones that serve as a catalyst to transform the complex to the simple, to move faster, stronger and smarter across the board. Someone asked me recently, and they said – they asked if this has been a humbling experience for me? And as we were looking and contemplating, preparing for the call, and one of our senior execs, and my reaction to them was, like all of us, I'd like to think that being humble or being made humble is never required. But who knows, we probably all get over our skis a little bit. At the same time, the way that I view this year is something that I think we can definitely look back on and say we've been made much wiser. And so I don't believe there are surprises in life. I believe that everything is something that we can hopefully forecast or see. But sometimes it's not so clear to us. And so, again, I want to remind you that our eyes are wide open, and we are ready to run in 2017 and beyond. That's exactly what we're working on in 2017. And we're going to work on adding the next $5 billion to our company. Thank you all very much.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.