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 1. I or a household member has a financial interest in the securities of the following companies: none 2. I or a household member is an officer, director, or advisory board member of the following companies: none 3. I have received compensation within the past 12 months from the following companies: none 4. Piper Sandler beneficially owns 1% or more of a class of the following companies: none 5. Piper Sandler has had a client relationship or has received compensation for investment banking services from the following companies within the past 12 months: none 6. Piper Sandler expects to receive or intends to seek compensation for investment banking services from the following companies in the next 3 months: none 7. Piper Sandler was a managing underwriter of a public offering of, or a dealer manager of a tender offer for, the securities of the following companies within the past 12 months: none 8. Piper Sandler has had a client relationship and has received compensation for non-investment banking securities related products or services in the past 12 months for the following companies: none 9. Piper Sandler has had a client relationship and has received compensation for non-securities services in the past 12 months for the following companies: none 10. Piper Sandler is a registered market maker for the following companies: CPRI, CROX, EL, ELF, FL, FNKO, GIII, KTB, LULU, NKE, PVH, RVLV, SFIX, SHOO, TPR, UAA, ULTA, WWW 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 All Teens All Down Spending Teen • teens self Teens Annual Teenage Spend Per Year $2,000 $2,200 $2,400 $2,600 $2,800 $3,000 $3,200 ages 13 - reported spending ~$2,150 implying total per year teen spending in our survey, of Spring 2005 PeakSpend - 19. Fall 2005 $3,023 Spring 2006 Fall 2006 Spring 2007 Fall 2007 Spring 2008 Fall 2008 Spring 2009 9 Fall 2009 Spring 5% Vs. & Down% Y/Y Spring 2010 Fall 2010 Spring 2011 Fall 2011 Spring 2012 Fall 2012 Spring 2013 Fall 2013 Spring 2014 Fall 2014 Spring 2015 Fall 2015 Spring 2016 Fall 2016 Spring 2017 Fall 2017 Spring 2018 Fall 2018 Spring 2019 $2,371 ~$60B, Fall 2019 Trough Spend Spring 2020 $2,150 assuming Fall 2020 27.7M 27.7M 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.