Taking Stock with Teens Survey

HIGHLIGHTS FROM OUR 40TH SURVEY February 2021 Taking Stock

With Teens® A Collaborative Gen Z Insights Project

Piper Sandler does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decisions. This report should be read in conjunction with important disclosure information, including an attestation under Regulation Analyst Certification, found at the end of this report or at the following site: http://www.pipersandler.com/researchdisclosures. Disclosures for the universe of Erinn Murphy

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11. Piper Sandler will buy and sell securities on a principal basis for the following companies: ADS GR, REAL, RL, VFC Investment Risks

Risks to achievement of investment objectives include, but are not limited to, the following: • Reliance on key top management • Changing consumer preferences • Changes in input costs and raw materials • Markdown risks • Product flow and inventory disruptions • Competition • Lack of pricing power • Deleveraging of fixed expenses • Foreign exchange rate risk • General macroeconomic uncertainty What Do We Know About GenZ?

• 67M GenZers born between 1997 – 2012 in the U.S., according to Pew Research

• 9% of U.S. population is 19-25 years old, according to the U.S. Census Bureau

• Digitally-native; highly influential; care on social issues

• Piper Sandler has been doing research on the “teenager” in the U.S. since 2001

40th Semi-Annual Taking Stock With Teens Survey

• The average teen in our survey was just four years old at onset of GFC

• The average teen in our survey was just three years old when the first iPhone launched 40th Semi-Annual Proprietary GenZ Research Project

TEENS 9,800 SURVEYED 15.8 AVERAGE AGE 51% 48%

U.S. 1% 48 STATES MALE FEMALE NON-BINARY $67,500 24% AVERAGE HOUSEHOLD INCOME 42% 24%

10% TEENS CURRENTLY PART-TIME EMPLOYED 33% SOUTH WEST MIDWEST NORTHEAST Survey is executed in partnership with DECA The source for all charts/tables within this report is Piper Sandler. Commemorating 20 Years Of Teen Research

2001 – 2020 –

Fallin’ – Alicia Keys WAP – Cardi B Week 4 September

George W. Bush Donald Trump

COVID-19, September 11, 2001 Current Affairs George Floyd, Breonna Taylor

Generation Gen Y Gen Z

Survey Size N=300; 10 States Taking Stock N=9,800; 48 States with Teens Top Brands Gap, Abercrombie & Nike, American Eagle, Fitch, Express adidas Key Takeaways – Demographics & Spending

• This Fall marks 20 consecutive years of conducting primary research on the U.S. teen on a semi-annual basis

• Our 40th semi-annual survey was conducted between August 19 & September 22

• Regional responses impacted by school start dates: 42% in the South (vs. 44% Spring); NE at 10% (same as Spring)

• As a result of COVID-19, 76% of teens went back to school either in a hybrid format or fully virtual

• 8% of teens or an immediate member in their household have had COVID-19 (vs. national average of 6%)

• 48% of teens believe the economy is getting worse vs. 47% in Spring & 32% last Fall

• Teen “self-reported” spending at an all-time survey low of $2,150, down 5% sequentially & 9% Y/Y

• Areas of wallet share contraction included: Food (but still No. 1 priority) & Concerts/Events

• Areas of wallet share expansion included: Video Games, Movies & Furniture/Room Accessories

• Cosmetics spending for females down 20% Y/Y; skincare for females down only 3%; skincare for males up 12%

• In the next six months, teen intent to dine-in & fly on a plane is higher & to visit a retail store is lower

• Secondhand represents 8% of shopping time allocation, taking share from off-price, specialty & dept. stores Key Takeaways – Brand & Preference Rankings

• Chick-Fil-A is No. 1 restaurant; Chipotle posted steady brand gains while Dunkin’ moved up to No. 4

• 18% of teens consume plant-based meat with Impossible Foods as the No. 1 choice

• Video games are 10% of total teen wallet share—new survey high; 63% expect to purchase a NextGen console

• Teens spend 34% of their daily video consumption on Netflix (gained share) followed by YouTube

• 54% of teens cite Amazon as their No. 1 favorite e-com site; SHEIN took No. 2 spot for first time (ahead of Nike)

• Ulta gained 400 bps of share as No. 1 beauty destination with 42% share; Target gained share; Amazon stays top-five

• Handbag spending at $87, a new low in survey; Louis Vuitton unseats Michael Kors for No. 1 spot; Coach gained share

• 86% of teens own an iPhone and 89% expect an iPhone to be their next phone; both new all-time highs

• Snapchat is the favorite social media platform (again) but Instagram fell from No. 2 to No. 3 as TikTok moved up to No. 2

• Significant movement in top social & political issues led by Racial Equality, Environment & Black Lives Matter

• Teens’ favorite celebrity is Kevin Hart and most followed influencer is David Dobrik Teen Spending Down 9% Y/Y & Down 5% Vs. Spring All Teens $3,200

Peak Spend $3,023 $3,000

$2,800

$2,600

$2,400 $2,371 Trough

Annual Teenage Spend Per Year Per Spend Teenage Annual Spend

$2,200 $2,150

$2,000

Fall 2007 Fall Fall 2005 Fall 2006 Fall 2008 Fall 2009 Fall 2010 Fall 2011 Fall 2012 Fall 2013 Fall 2014 Fall 2015 Fall 2016 Fall 2017 Fall 2018 Fall 2019 Fall 2020 Fall

Spring 2019 Spring Spring 2005 Spring 2006 Spring 2007 Spring 2008 Spring 2009 Spring 2010 Spring 2011 Spring 2012 Spring 2013 Spring 2014 Spring 2015 Spring 2016 Spring 2017 Spring 2018 Spring 2020 Spring

• Teens self-reported spending ~$2,150 per year in our survey, implying total teen spending of ~$60B, assuming 27.7M teens ages 13-19. GenZ Insights: They Actually Care About The World

Most Important Political & Social Issues

FALL 2019 SPRING 2020 FALL 2020 1 Environment 16% 1 Environment 16% 1 Racial Equality 19% 2 Immigration 12% 2 Coronavirus 11% 2 Environment 9% 3 Gun Control 10% 3 Abortion 8% 3 Black Lives Matter 8% 4 Abortion 8% 4 Gun Control 6% 4 2020 Election / Voting 7% 5 Racial Equality 7% 5 Racial Equality 6% 5 Coronavirus 6% 6 Donald Trump 4% 6 Immigration 6% 6 Abortion 5% 7 Bullying 3% 7 2020 Election / Voting 4% 7 Equality 5% 8 Equality 3% 8 Equality 4% 8 Immigration 2% 9 2020 Election / Voting 2% 9 Health Care 3% 9 Police Brutality 2% 10 LGBTQ+ Rights 2% 10 Donald Trump 2% 10 Gun Control 2%

• We started asking teens to “name a political or social issue that is important” to them for the first time in Fall 2019 • GenZ is unique in that they appear to care more about social justice & the environment versus former generations • We saw a significant move in teens advocating for Racial Equality (19%), taking the No. 1 spot; environment No. 2 • Additionally, specific mentions of Black Lives Matter movement ranked No. 3.; Police Brutality moved into the top-ten • Mentions of the 2020 Election outcome & Voting ranked No. 4 and Coronavirus moved down from No. 2 to No. 5 GenZ Gets Specific On Their Environmental Concerns

Top Environmental Concerns

1. Global Warming 6. Water 2. Pollution/Waste 7. Plastic 3. Natural Disasters 8. Deforestation 97% 4. Coronavirus 9. Air / Air Quality Of Teens List A Specific Concern 5. Wildfires 10. Wildlife

Teen Behavioral Changes

1. Driving Less; Walking/Biking More 44% 2. Wearing Re-Usable Masks Have Changed Their Behavior As A Result (vs. 46% in Fall 2019) 3. Recycling More & Reducing Waste/Litter GenZ Insights...The Who’s Who?

Who They Like & Who They Follow

Favorite Celebrities Favorite Social Media Personalities 1. Kevin Hart 1. David Dobrik 2. Harry Styles 2. Emma Chamberlain (tie) LeBron James 3. LeBron James 4. Adam Sandler 4. Charli D’Amelio 5. Dwayne “The Rock” Johnson 5. Nelk Boys 6. Zendaya 6. Danny Duncan 7. Donald Trump 7. Donald Trump 8. Taylor Swift 8. Kylie Jenner 9. Tom Holland 9. Addison Rae 10. Travis Scott 10. Dwayne “The Rock” Johnson

• Kevin Hart and LeBron James re-affirmed their top spots in the minds of teens, while Harry Styles joined them. Zendaya moved up in the list; Tom Holland moved into the Top 10 • David Dobrik again reigned supreme for Social Media personalities; as seen in previous surveys, the list is dominated by YouTube and TikTok content creators. For the first time, a content house (Nelk Boys) appeared on the list TikTok Moves To No. 2 Favorite Social Media Platform

Social Media Preferences

Highest Social Media Engagement Favorite Social Media Platform

1 Instagram 84% 1 Snapchat 34% 2 Snapchat 80% 2 TikTok 29% 3 TikTok 69% 3 Instagram 25% 4 Twitter 39% 4 Discord 3% 5 Pinterest 32% 5 Twitter 3% 6 Facebook 28% 6 Facebook 2% 7 Discord 20% 7 Reddit 1% 8 Reddit 14% 8 Pinterest 1% 9 Other 4% 9 Other 1% 10 LinkedIn 3% 10 Linkedin 0%

• Instagram continues to lead the pack in usage / engagement followed by Snapchat & TikTok. TikTok moved up from 62% in Spring to 69% this Fall. • Snapchat was the No. 1 preferred social media platform. TikTok had another strong showing following its Spring debut moving up to the No. 2 spot from the No. 3 spot, unseating Instagram which moved down to No. 3. • The average teen claims to spend 12 hours per week on social media Netflix & YouTube Top Platforms

Teen Daily Video Consumption

Spring 2020 Fall 2020

1 Netflix 33% 1 Netflix 34% 2 YouTube 31% 2 YouTube 32% 3 Cable TV 11% 3 Cable TV 9% 4 Hulu 8% 4 Hulu 7% 5 Disney+ 7% 5 Disney+ 6% 6 Amazon 3% 6 Amazon 3% 7 Apple TV+ 2% 7 Apple TV+ 1% 8 Facebook Watch tab 1% 8 Facebook Watch tab 1% 9 Other streaming 5% 9 Other streaming 6%

• On average, teens spend 34% of their daily video consumption on Netflix, up from 33% in Spring 2020 • YouTube gained 100 bps share an remained in the No. 2 spot at 32% (vs. 31% in Spring) • Disney+ (ranked #5) and AppleTV+ (#7) both declined slightly in only a second appearance in the Teen Survey garnering 6% and 1%, respectively, vs. 7% and 2% in the Spring • Traditional Cable TV remained #3, but dipped to 9% from 11%, while Hulu stayed at #4 but slid to 7% from 8% • See appendix for time series of data Shopping Channel Preference Upper-Income Teens

• This Fall, we included “secondhand” as an option to the question, “when shopping for clothing, what % do you spend in the following channels?” Secondhand captured 8% of upper-income shopping channel preferences. • We saw specialty shed 200 bps share Y/Y and major chain/department stores down 100 bps Y/Y as did off-price • Despite altering our question, online/eTail remains ~22% of the shopping channel mix with teens Time Spent Shopping Continues To Shift Online Upper-Income Teens Department Store/Specialty Online Only eTailers 45%

40%

35%

30%

25% Teens) 20%

15%

10% % Time SpentShoppingChannel By (UI Time %

• We see teens allocate less & less time in department stores & specialty as online becomes more important • Department stores & specialty combined represent 33% of shopping channel preferences—down from 36% LY • Online represents 22% of shopping channel mix, inline with Spring but down 100 bps from last year • In Fall 2020, we added a new option (secondhand) to the mix which could have pulled share from other channels • Of note, 86% of female teens preferred shopping for beauty in-store vs. online—this is down from 90% in Spring Secondhand Market Adoption Upper-Income Teens

% of UI Teens Who Have Tried a Secondhand eCom Platform Thrift/Consignment Stores Ranked 46% #10 Have Purchased Secondhand As Favorite Brand/Retailer 58% This Compares to a Rank of Have Sold Secondhand #38 In Fall 2019’s Survey 28% Have Used a Secondhand eCom Platform

• We asked teens about their activity on popular Secondhand Marketplaces, including Poshmark, The RealReal, Tradesy, thredUp, Mercari, and Depop – above, Upper Income teen participation on these platforms is charted (left) • Of Note, Depop rose to the #10 position on Favorite Websites for all teens; StockX ranked No. 5 among males • Secondhand marketplace activity has picked up sequentially since the Spring, with UI Males moving from 13% to 18% and upper-income females increasing to 40%. • 46% of UI teens have PURCHASED clothes secondhand (either a marketplace or a thrift store) & 58% have SOLD on the Secondhand with female engagement higher than male What’s In Your Wallet? Food, Video Games & Clothing Upper-Income Teens

Males’ Wallet Share Females’ Wallet Share

1 Food 21% 1 Clothing 27%

2 Video Games 17% 2 Food 21%

3 Clothing 16% 3 Personal Care 11%

• Food remains the largest category for male spending, however, it fell 200 bps Y/Y • Video Games moved up from the No. 3 to the No. 2 priority in the male wallet at 17%--up 400 bps Y/Y • Clothing moved down from No. 2 to No. 3 at 16% share for males—down 100 bps Y/Y • Clothing remains the top-choice within the wallet for females, inline with Fall 2019; Food stayed at No. 2 • Personal care remained the No. 3 wallet choice for females at 11%--up 100 bps from Fall 2019 Athletic Apparel Trending Upward Aggregate Athletic Mindshare As Favorite Apparel Brand - Upper-Income Teens

• 38% of preferred apparel brands are “athletic,” up from 37% last Fall and 37% in Spring 2020. • Preppy brands such as Sperry, Ralph Lauren and Vineyard Vines continue to cede share to athletic brands. Athletic Footwear Still Gaining Share Among Females Favorite Footwear Brand Mindshare - Upper-Income Female Teens

• 80% of females prefer an athletic brand of footwear (above), up 500 bps Y/Y and reaching a new survey high. • 88% of males prefer an athletic brand of footwear, 300 bps above the 2018-2019 average Image Source: Nike Nike Source: Image Teen Brand Preferences Gap Spring 2001

Fall 2001 AbercrombieFitch & Spring 2002 Fall 2002 years3.5 Spring 2003 Fall 2003 Spring 2004 Fall 2004

Spring 2005 Fall 2005 3.5 years3.5 Spring 2006 Hollister Fall 2006 Spring 2007 Fall 2007 Spring 2008

Fall 2008 Sports Action 2.5 years2.5

Spring 2009 Brands Fall 2009 Spring 2010 Fall 2010

Spring 2011 Fall 2011 Spring 2012 Fall 2012 Spring 2013 Fall 2013 Spring 2014 Fall 2014 Spring 2015 10years

Fall 2015 Nike Spring 2016 Fall 2016 Spring 2017 Fall 2017 Spring 2018 Fall 2018 Spring 2019 Fall 2019 Spring 2020 Fall 2020 Favorite Apparel Brands All Teens – See Appendix for more detail broken down by upper vs. average-income teens or male vs. female

SPRING 2019 FALL 2019 SPRING 2020 FALL 2020 1 Nike 22% 1 Nike 23% 1 Nike 25% 1 Nike 27% 2 American Eagle 9% 2 American Eagle 10% 2 American Eagle 10% 2 American Eagle 8% 3 Adidas 5% 3 Adidas 6% 3 Adidas 5% 3 Adidas 5% 4 Forever 21 5% 4 Hollister 4% 4 Hollister 4% 4 Pacsun 4% 5 Hollister 3% 5 PacSun 4% 5 PacSun 3% 5 Hollister 4% 6 PacSun 3% 6 Forever 21 3% 6 lululemon 3% 6 lululemon 3% 7 Urban Outfitters 3% 7 lululemon 3% 7 Forever 21 3% 7 H&M 3% 8 lululemon 3% 8 Vans 3% 8 Urban Outfitters 3% 8 Urban Outfitters 3% 9 Victoria's Secret 2% 9 H&M 2% 9 H&M 2% 9 Vans 2% 10 H&M 2% 10 Champion 2% 10 Vans 2% 10 Forever 21 2%

• Apparel spending was ~$507/year—down 11% Y/Y; females outspend males by ~$160 • Nike is the No. 1 brand (10 years running) and gains 400 bps Y/Y to 27% share • American Eagle remains its No. 2 spot but sheds 200 bps share; adidas rounds out the Top 3 • lululemon moves up Y/Y from No. 7 in Fall 2019 to No. 6 in Fall 2020 • H&M moves up from No. 9 to No. 7; Forever 21 moves down from No. 6 to No. 10 • Vans moved from No. 8 to No. 9 Y/Y with a corresponding 100 bps fall in share • Ralph Lauren drops from No. 11 to No. 18 while Victoria’s Secret falls from No. 13 to 22 Y/Y • SHEIN moved up to No. 11 with 2% of the vote vs No. 67 last fall with 0.1% of the vote

Image Source: lululemon.com Favorite Footwear Brands All Teens – See Appendix for more detail broken down by upper vs. average-income teens or male vs. female

SPRING 2019 FALL 2019 SPRING 2020 FALL 2020 1 Nike 41% 1 Nike 42% 1 Nike 47% 1 Nike 52% 2 Vans 20% 2 Vans 20% 2 Vans 20% 2 Vans 16% 3 Adidas 13% 3 Adidas 13% 3 Adidas 11% 3 Adidas 11% 4 Converse 5% 4 Converse 4% 4 Converse 4% 4 Converse 4% 5 Foot Locker 3% 5 Foot Locker 3% 5 Foot Locker 3% 5 Foot Locker 2% 6 New Balance 1% 6 Birkenstock 2% 6 New Balance 1% 6 Birkenstock 1% 7 Steve Madden 1% 7 Crocs 1% 7 Birkenstock 1% 7 Dr. Martens 1% 8 Birkenstock 1% New Balance 1% 8 Dr. Martens 1% 8 New Balance 1% 9 DSW 1% 9 Under Armour 1% Steve Madden 1% 9 Crocs 1% 10 Journeys 1% 10 Steve Madden 1% 10 Finish Line 1% 10 Steve Madden 1%

• Footwear spending was $275/year—down 6% Y/Y led by a decline of 600 bps in the male spend in the category • Female spending was also down 500 bps Y/Y; males now outspend females on footwear by ~$50 • Nike (No. 1) gains substantial share—up 1,000 bps Y/Y to 52% vs. 42% last year; taking share from Vans & adidas • Vans steady at the No. 2 position but down 400 bps to 16% share; Under Armour drops from No. 9 to No. 11 • Nike, Vans, Adidas, Converse, and Footlocker maintain their rankings order • Sperry remains out of the Top 10 moving to No. 34 from No. 16 last year • Crocs remains in the top ten—moving to No. 9 vs. No. 12 in Spring (No. 7 in Fall) • Dr. Martens moves up 1 rank from Spring to No. 7 and makes the Fall Top 10 for the first time

Image Source: Nike.com Top Fashion Trends Right Now Upper-Income Teens

SPRING 2019 FALL 2019 SPRING 2020 FALL 2020 1 Nike / Jordans 14% 1 Nike / Jordans 13% 1 Nike / Jordans 14% 1 Nike / Jordans 15% 2 Athletic Wear 11% 2 Athletic Wear 11% 2 Athletic Wear 11% 2 Athletic Wear 8% 3 Vans 6% 3 Vans 7% 3 Vans 6% 3 Hoodies 6% 4 Jogger Pants 5% 4 Champion 5% 4 Jogger Pants 5% 4 5" Inseam Shorts 4% 5 Supreme 5% 5 Adidas 4% 5 Supreme 5% 5 Shorts 4% 6 Adidas 5% 6 Hoodies 3% 6 Adidas 5% 6 Short Shorts 4% 7 Hoodies 4% 7 Shorts 3% 7 Hoodies 4% 7 Jogger Pants 3% 8 Khakis / Chinos 3% 8 Sweatshirts 3% 8 Khakis / Chinos 3% 8 Flannels 3% 9 Leggings / lululemon 3% 9 Chains 3% 9 Leggings / lululemon 3% 9 Sweatshirts 3% 10 Flannels 3% 10 Short Shorts 2% 10 Flannels 3% 10 Vans 2%

Athletic (In Top 10) 47% Athletic (In Top 10) 47% Athletic (In Top 10) 49% Athletic (In Top 10) 42% Preppy (In Top 10) 3% Preppy (In Top 10) 2% Preppy (In Top 10) 4% Preppy (In Top 10) 4%

SPRING 2019 FALL 2019 SPRING 2020 FALL 2020 1 Leggings / lululemon 28% 1 Leggings / lululemon 17% 1 Leggings / lululemon 25% 1 Leggings / lululemon 21% 2 Vans 8% 2 Scrunchies 10% 2 Nike / Jordans 9% 2 Jeans 10% 3 Crop Tops 5% 3 Nike / Jordans 6% 3 Crop Tops 8% 3 Nike / Jordans 9% 4 Jeans 5% 4 Baggy / Saggy Pants 6% 4 Jeans 7% 4 Crop Tops 8% 5 Nike / Jordans 4% 5 Jeans 5% 5 Ripped Jeans 4% 5 Baggy / Saggy Pants 4% 6 Ripped Jeans 3% 6 Vans 5% 6 Scrunchies 3% 6 Oversized Tops 3% 7 Hair 2% 7 Crop Tops 4% 7 Vans 3% 7 Ripped Jeans 3% 8 Scrunchies 2% 8 VSCO 4% 8 Brandy Melville 3% 8 Brandy Melville 2% 9 Victoria's Secret 2% 9 Birkenstock 3% 9 VSCO 2% 9 Vans 2% 10 Athletic Wear 2% 10 Ripped Jeans 3% 10 Hoodies 2% 10 Athletic Wear 2%

Athletic (In Top 10) 42% Athletic (In Top 10) 28% Athletic (In Top 10) 39% Athletic (In Top 10) 35% Favorite Websites For Shopping Upper-Income Teens

SPRING 2019 FALL 2019 SPRING 2020 FALL 2020 1 Amazon 50% 1 Amazon 52% 1 Amazon 53% 1 Amazon 54% 2 Nike 5% 2 Nike 4% 2 Nike 5% 2 SHEIN 5% 3 Urban Outfitters 4% 3 American Eagle 3% 3 Urban Outfitters 2% 3 Nike 5% 4 American Eagle 3% 4 Urban Outfitters 2% 4 SHEIN 2% 4 PacSun 3% 5 Fashion Nova 2% 5 eBay 2% lululemon 2% 5 lululemon 2% 6 lululemon 2% PacSun 2% 6 PacSun 2% 6 Urban Outfitters 2% PacSun 2% 7 lululemon 2% 7 American Eagle 2% 7 American Eagle 2% 8 eBay 1% 8 Fashion Nova 2% 8 Princess Polly 2% 8 eBay 1% Forever 21 1% 9 Zumiez 1% eBay 2% Romwe 1% 10 Brandy Melville 1% 10 Adidas 1% 10 Brandy Melville 1% 10 Depop 1% Hollister 1% Princess Polly 1% ~50% Of 2015-2019 Softlines Dollar Growth In North America

• Amazon’s dominance continues as 54% of teens say this is their favorite website to shop on—up from 52% in Fall ‘19 • 90% of teens claim to shop online; of these online shoppers, 94% claim to shop on Amazon • SHEIN made a notable jump in our survey, unseating Nike as the No. 2 preferred website • lululemon moved up from No. 7 to No. 5 and Depop moved into the Top Ten for the first time Cosmetics Behavior Evolving Spurred By Pandemic All Female Teens

• We asked female teens if they wear makeup “everyday”, “sometimes” or “never” • We do not believe the makeup category is dead; however, we are seeing engagement in the category evolve. We have seen “everyday” makeup wearers rotate into “sometimes”; this dynamic shifted even further as a result of CV-19 • In Fall 2020, 55% of female teens indicated they wear makeup just “sometimes”, up 1,100 bps from Fall 2019 • We also saw females who “never” wear make up move to 23%--ahead of the “everyday” wearers (22%) Beauty: Favorite Shopping Destinations All Female Teens

SPRING 2019 FALL 2019 SPRING 2020 FALL 2020 1 Ulta 33% 1 Ulta 38% 1 Ulta 39% 1 Ulta 42% 2 Sephora 31% 2 Sephora 26% 2 Sephora 24% 2 Sephora 20% 3 Walmart 8% 3 Walmart 8% 3 Target 8% 3 Target 11% 4 Target 6% 4 Target 7% 4 Walmart 8% 4 Walmart 8% 5 Amazon 4% 5 Amazon 5% 5 Amazon 4% 5 Amazon 5% 6 Walgreens 1% 6 CVS 2% 6 Walgreens 2% 6 CVS 1% 7 CVS 1% 7 MAC 1% 7 Glossier 1% 7 Walgreens 1% 8 Morphe 1% 8 Morphe 1% 8 CVS 1% 8 Glossier 1% 9 MAC 1% 9 Glossier 1% 9 Macy's 1% 9 Ipsy 1% 10 Glossier 1% Walgreens 1% 10 Morphe 1% 10 Morphe 1%

• 86% of teens prefer to shop for beauty in-store vs. online; that said, this fell 400 bps since Spring • Ulta strengthens its position as the No. 1 preferred beauty destination at 42% share vs. 38% last year (+400 bps Y/Y) • Sephora stays at No. 2 but moves to 20% share vs. 26% last year (-600 bps Y/Y) • Target maintains the No. 3 spot after overtaking Walmart last spring with a corresponding 400 bps share gain Y/Y • The subscription based beauty service Ipsy broke into the top 10 for the first time at No. 9 receiving 1% of the vote • We saw minor share shifts between Walgreens, CVS and Glossier & Morphe; Macy’s fell to No. 17 Beauty: Favorite Skincare Brands All Female Teens

SPRING 2019 FALL 2019 SPRING 2020 FALL 2020 1 Neutrogena 18% 1 Neutrogena 18% 1 Neutrogena 16% 1 CeraVe 28% 2 Mario Badescu 7% 2 Mario Badescu 8% 2 Mario Badescu 10% 2 Neutrogena 10% 3 Clean & Clear 6% 3 Clean & Clear 8% 3 Cetaphil 7% 3 Cetaphil 10% 4 Clinique 6% 4 Cetaphil 6% 4 Clean & Clear 6% 4 The Ordinary 8% 5 Cetaphil 6% 5 Clinique 5% 5 Clinique 4% 5 Clean & Clear 3% 6 Proactiv 5% 6 Proactiv 4% 6 Proactiv 3% 6 Clinique 3% 7 Biore 2% 7 Aveeno 2% 7 CeraVe 3% 7 Curology 2% 8 CeraVe 2% Biore 2% 8 Curology 2% 8 Mario Badescu 2% Olay 2% 9 Burt's Bees 2% 9 Olay 2% 9 Proactiv 2% 10 Aveeno 2% 10 CeraVe 2% 10 Aveeno 2% 10 Rodan & Fields 1% Biore 2%

• Skincare spending for all female teens was $101/year—down 3% Y/Y and down 4% vs. multi-survey avg. of $106 • Skincare spending exceeded cosmetics spending for the first time in our survey history • CeraVe strongly jumped to the No. 1 position having been No. 10 last Fall & No. 7 in Spring, likely a result of high- levels of engagement on TikTok • Mario Badescu dropped from their stable No. 2 position to No. 8 with 2% of the vote, down 600 bps Y/Y—a nod that VSCO girls trend has slowed • The Ordinary shot to No. 4 while Rodan & Fields broke into the Top 10; Curology furthered its upward movement • Clinique’s share has dropped 100 bps per season since Spring 2019 and now represents 3% of teen share • Aveeno dropped out of the top 10 to No. 11 while Biore dropped from No 7 last fall to No. 22 this Fall Beauty: Favorite Cosmetics Brands All Female Teens

SPRING 2019 FALL 2019 SPRING 2020 FALL 2020 1 Tarte 11% 1 Tarte 13% 1 Tarte 11% 1 Tarte 7% 2 Too Faced 8% 2 Too Faced 9% 2 Maybelline 9% 2 e.l.f. 6% 3 MAC 7% 3 Maybelline 7% 3 Too Faced 7% 3 Maybelline 6% 4 Morphe 7% 4 e.l.f. 6% 4 e.l.f. 5% 4 Morphe 5% 5 Maybelline 6% 5 Morphe 6% Fenty Beauty 5% 5 Too Faced 4% 6 e.l.f. 5% 6 MAC 6% Morphe 5% 6 MAC 4% 7 Anastasia Beverly Hills 5% 7 Fenty Beauty 5% 7 MAC 5% 7 L'Oreal 3% 8 Fenty Beauty 5% 8 Sephora 5% 8 CoverGirl 4% 8 Fenty Beauty 3% Sephora 5% 9 Anastasia Beverly Hills 4% 9 L'Oreal 4% Sephora 3% 10 CoverGirl 5% 10 L'Oreal 4% 10 Sephora 4% 10 Glossier 3%

• Female spending on cosmetics dropped to $84/year, a 20% contraction Y/Y and 51% since the peak of $173 in 2017 • Spending levels are now 31% below the multi-survey average of $124/year—we believe further pressured by CV-19 • Tarte (Kose-owned) remained the top-ranked cosmetics brand (6th consecutive survey) but decreased 400 bps to 7% • e.l.f. moved up nicely from No. 4 to No. 2—its highest rank we have seen to date in our survey • Too Faced dropped from the No. 2 spot last Fall to No. 5; MAC kept its No. 6 rank, albeit with 200 bps share loss • CoverGirl dropped out of the Top 10 & Anastasia Beverly Hills remained out of the Top 10 • Glossier came into the Top 10 for the first time (among all female teens) Beauty: Shopping Channel Trends Favor Specialty Favorite Beauty Shopping Destinations – Upper-Income Female Teens

• 64% of UI teens prefer specialty formats for beauty shopping – down from 72% LY despite ULTA’s significant gain • Aggregate legacy channel (CVS, Macy’s, TGT, WMT, etc.) increased 300 bps share from 15% to 18% led by Target • Digital pure-plays, led by Amazon and followed by Glossier, captured 8% share—doubled Y/Y from 4% • When asked if they or their household purchase beauty/personal care on AMZN, 30% say “Yes” vs. 23% last Spring Beauty: Clean Beauty Highlights All Female Teens

Look At Ingredients In Their Beauty/ Personal Care Products 57% (vs. 47% in Fall 2019)

Willing To Spend More For “Clean” Or Natural Beauty 78% (vs. 75% in Fall 2019)

Average Pricing Premium For “Clean” Or Natural 28% (vs. 29% in Fall 2019) Beauty Industry Is Hot For Influencers All Female Teens

• ~84% of females use online influencers as a source of discovery for beauty brands & trends—a further gain from LY • Word-of-mouth (“Friends”) remains the second most important decision influence when making a beauty purchase Thank You For Being Part Of Our Survey

We just kicked off our 41th Semi-Annual Taking Stock With Teens Survey. Please support our

partnership with DECA by answering our survey below.

https://pjc.az1.qualtrics.com/jfe/form/SV_cwsUAq9IFSMefvD

We love your honesty & value your opinions and look forward to sharing the results with you all

later this Fall.

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Analyst Certification – Erinn Murphy, Senior Research Analyst: The views expressed in this report accurately reflect my personal views about the subject company and the subject security. In addition, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report. Piper Sandler research analysts receive compensation that is based, in part, on the firm's overall revenues, which include investment banking revenues.

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