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Piper Jaffray usually provides bids and offers for the securities of the following companies and will, from time to time, buy and sell the securities of these companies on a principal basis: AMC, AMCX, BBW, CMG, COO, DL, EL, GOOG, HELE, HSNI, INGN, JMEI, LBY, RGS, RL, RMD, RWLK, SHOP, SPB, TOY CN, TUP, UEIC, VFC, WB, YUME Note: Piper Jaffray and / or its employees (other than the analyst who follows Glu Mobile Inc.) own securities of Glu Mobile Inc. that were acquired prior to the IPO of Glu Mobile Inc. 2 | Taking Stock With Teens Investment Risks Risks to achievement of investment objectives include, but are not limited to: • 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 3 | Taking Stock With Teens Fashion & Beauty Restaurants Media & Devices Questions & Answers Appendix Depth of Piper Jaffray Consumer Insights Anchored in Primary Research Taking Stock With Teens Restaurant Taking Stock Benchmark With Young Book Adults Millennial CFO/CIO Moms Survey Survey Healthy Women’s Lifestyles Survey Survey Holiday Home Spending Improvement Survey Survey Athletic Brand & Wearables Survey 5 | Taking Stock With Teens 32nd Semi-Annual Proprietary Teen Research Project National survey of teens measuring: UPPER-INCOME GROUP • Behaviors & Priorities • Capacity & Intentions • Brand Preferences 2,800 teens $109,000 Classroom visits Household income and electronic Represents top 20% of surveys U.S. household units 10,000 Responses AVERAGE-INCOME GROUP 16.0 Average Age 7,200 teens $53,000 Classroom visits Household income and electronic Aligns more closely surveys with U.S. median 34% Part-Time Employed Survey is executed in partnership with DECA.. The source for all charts/tables within this report is Piper Jaffray. 6 | Taking Stock With Teens Fall 2016 Action Ideas STOCK CALLS: RATINGS CHANGES & ESTIMATE REVISIONS INITIATING COVERAGE: adidas AG / ADS.GR / initiating Overweight / Sr. Research Analyst Erinn Murphy RATINGS CHANGES: Estee Lauder Companies Inc. / EL / from Overweight to Neutral / Sr. Research Analyst Steph Wissink Under Armour, Inc. / UA / from Neutral to Overweight / Sr. Research Analyst Erinn Murphy Zumiez Inc. / ZUMZ / from Neutral to Overweight / Sr. Research Analyst Neely Tamminga ESTIMATE REVISIONS: V.F. Corporation / VFC / reducing estimates and price target / Sr. Research Analyst Erinn Murphy 7 | Taking Stock With Teens Fall 2016 Survey Summary HIGH-LEVEL VIEWPOINTS: • Summary takeaway: spending trends are encouraging among upper-income teens; a potential leading indicator for spending recovery • Total teen spending is down 2.6% y/y; spending on fashion, down 0.6% y/y • Upper-income: total spending up 2.5% y/y; spending on fashion, up 3.1% y/y • Average-income: total spending down 4.7% y/y; spending on fashion, down 2.1% y/y • Spending perceptions of “more” generally up among our upper-income female population—potential leading indicators for future growth • Upper-income females spending “more” increased 100 bps y/y in clothing and 100 bps y/y in shoes and dropped 100 bps y/y in accessories • Upper-income females spending significantly “more” on cosmetics and skincare up 900 bps and 600 bps y/y, respectively • Parent contribution in the fashion category for teens tracking above average levels seen since 2010 • Upper-income: parents contributing 51%+ for fashion at 71% vs. 68% average since 2010 • Could be attributed to fewer kids taking on part-time employment: 34% of teens surveyed have part-time employment—down 200 bps vs. LY HIGH-LEVEL THEMES: • Denim trend strengthening • Beauty spending and prioritization at all-time highs • Video game spending tracking well ahead of multi-year average • Food is a source of entertainment • Social media engagement migrates to video- and photo-dominant platforms 8 | Taking Stock With Teens Fashion & Beauty Clothing, Shoes, Accessories & Beauty 38% of Teen Spending Upper-Income Inflects Positive Total teen spending is -2.6% y/y; spending on fashion, -0.6% y/y. UPPER-INCOME SPENDING $4,000 Upper-Income Total Spend Upper-Income Fashion Spend $1,800 $3,500 $1,600 Upper-income teens $3,000 $1,400 $1,200 leading potential $2,500 $1,000 $2,000 inflection in spending. $800 $1,500 $600 Total upper-income $1,000 $400 $500 $200 teen spending inflects Upper-Income Total Spend $0 $0 Upper-Income Fashion Spend positive—up 2.5% y/y with fashion up 3.1% Fall 2005 Fall 2006 Fall 2007 Fall 2008 Fall 2009 Fall 2010 Fall 2011 Fall 2012 Fall 2013 Fall 2014 Fall 2015 Fall 2016 y/y. Spring 2005 Spring 2006 Spring 2007 Spring 2008 Spring 2009 Spring 2010 Spring 2011 Spring 2012 Spring 2013 Spring 2014 Spring 2015 Spring 2016 AVERAGE-INCOME SPENDING $4,000 Average-Income Total Spend Average-Income Fashion Spend $1,800 $3,500 $1,600 $3,000 $1,400 $1,200 $2,500 $1,000 $2,000 $800 $1,500 $600 $1,000 $400 $500 $200 Average-Income Total Spend $0 $0 Average-Income Fashion Spend Fall 2005 Fall 2006 Fall 2007 Fall 2008 Fall 2009 Fall 2010 Fall 2011 Fall 2012 Fall 2013 Fall 2014 Fall 2015 Fall 2016 Fall 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 10 | Taking Stock With Teens Denim Strengthening Driven by AEO Denim saw an uptick to 19.5% of overall mindshare among upper-income females—up 540 bps from spring and up 570 bps from last fall. AEO is the primary driver of the denim uptick, up 710 bps from last fall. Both “ripped jeans” and “jeans” showed Top Fashion Trends - Upper-Income Females up as top trends Rank Fall 2015 % Rank Spring 2016 % Rank Fall 2016 % among upper-income 1 Leggings/lululemon 24% 1 Leggings/lululemon 23% 1 Leggings/lululemon 25% 2 Nike 5% 2 Victoria's Secret 7% 2 Birkenstock 6% females signaling to 3 Birkenstock 5% 3 Converse 6% 3 Victoria's Secret 5% us that there is a 4 Converse 4% 4 Nike 6% 4 Converse 4% 5 Victoria's Secret 4% 5 Boots 3% 5 Ripped Jeans 4% change in the casual 6 Crop Tops 3% 6 Crop Tops 3% 6 Jeans 3% 7 Short Shorts 2% 7 Athletic Wear 2% 7 Adidas 3% uniform. 8 Rompers 2% 8 Jeans 2% 8 Bralettes 3% Vineyard Vines 2% 9 Michael Kors 2% 9 Nike 3% 10 Dresses 2% 10 Adidas 2% 10 Chokers 3% 11 | Taking Stock With Teens 73% of Upper-Income Females 50% of upper-income Intend to Purchase Denim in Next 3 females have purchased denim in Months the past month and intend to purchase again in the next 3 months.