V.F. Corporation (VFC)

Investor Day 2018

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Sep 12, 2018

Okay, everybody. We're going to go ahead and get started. Good morning, everyone. Welcome to Orange County. All right. Good morning, everyone. Welcome to Orange County. Thank you for joining us. It's great to see so many familiar faces that have been around the Vans and BF story for some time. On behalf of our management team, we're excited to be here and to have the opportunity to share with you Vans' strategic and financial aspirations over the next 5 years. As you all know, Vans has been on an incredible growth journey since VF's acquisition in 2004. And I think you'll hear from the Vans team today excitement and confidence in the opportunities that lie ahead. We have about 4 hours together and we're eager to get started, but just a couple of housekeeping items before we get going. Today's focus is really on Vans. We can appreciate that many of you have questions about VF's pending spin off of the jeans business. However, we'd ask that you hold those questions until our quarterly update in October where we'll provide more details on the proposed transaction. We will host a Q and A session at the end of the presentation today, so please hold all questions until that time. After the Q and A session, we'll head to the roof for lunch where Steve Van Dorn will be on the grill. You'll hear music from Ray Barbee and perhaps a few other surprises. Following lunch, there'll be shuttles to both the LAX and Orange County airports. And finally, our presenters today will make forward looking statements, which are subject to risks and uncertainties. Actual results could differ materially from the statements made today. Additional information regarding factors that could influence our results can be found in our filings with the SEC. So with that, enjoy the presentation, and I look forward to seeing all of you throughout the day. There's no right or wrong way to make sure there's no right or wrong way to be a creative person. Cannot think of a better use of $50,000 The winner this year is Parker. It's not like this. It's a new style for vans. I literally just love them. Good morning, everybody. Welcome to Southern California. Excited to have you here. I hope you all were able to enjoy Steve Van Doren's waffles. They're legendary. If you didn't, as we said, Steve will be up grilling at lunch today. But Edgar, Steve is a unique individual. As you get to know him, you'll understand why. But he's been part of Vans. He's been an employee for 52 years. He started right after he was born. So, young man. But I think what you see here in Steve, and I would really encourage you to get a chance to talk to him is you will deeply understand the culture and the Van Doren spirit that each one of this team will talk about today and you'll hear just come through and what they speak about is what drives this company. And it's not every day that you can have one of the founders, part of a company, but we have 3 Van Doren family members part of Vans today. And I think it's a real testament around what this brand stands for and that Van Doren spirit that drives this business to where it is. We're excited to have you here at our headquarters. We Doug and his team opened this headquarters last year. A few of you asked me, will our Vans team be moving to Denver? Absolutely not. This is the home of Vans and geography is a deep part of what drives the culture. And the action sports spirit that sits in Orange County, specifically this part of LA is important to who Vans is. We've invested in this facility. And I think as you experience it today, you will see how it really speaks to the 4 pillars of what makes Vans unique from action sports to art, music and street culture really resonates through the environment that we've created for our employees to work with them. So as we're all aware, our Vans business has seen some incredible growth since its acquisition in 2004. And most recently, we are experiencing exceptional growth. And it's important for us today to speak to you about what's driving that, help reset that long term number. But what we're achieving this year in fiscal 2019 is we basically are achieving what we set out as our 2021 strategy last year in Boston. And it's an opportunity for us to rethink the trajectory of this business. But the things that are driving this brand, certainly you will see from the management team that speaks to you today, just the quality of their knowledge, the connectivity that they have as a team and how they are focused on a clear set of integrated strategies, capabilities that are driving this business. But what's what I really want you to take away on the strategies, the choices and the capabilities that they will talk about, these are what sits at the center of the strategy that we communicated to you all last year in Boston. And it's central to the transformation journey that VF is on. So as you look at the quality of this management team, their ability to execute against these clear sets of strategy, this is what we feel so strongly will continue to propel VF as we continue to transform ourselves to be more consumer focused and retail minded in the years to come. You'll have an opportunity to meet the Vans team. Last year, Doug had 30 minutes with you in Boston. Today, you get 4 hours. And we'll unpack the strategy leader by leader and give you some insight into what's driving the success, what gives them so much confidence, what gives us confidence about what will drive this business towards its ultimate goal of $5,000,000,000 in 2023. It's not a number that we take lightly. A lot of work has gone into understanding how that will come by region, by product category, by channel and you'll hear the team talk to you about that in a very clear and concise way today. So with that, I'd like to introduce Kevin Bailey. Kevin has been a Vans or not necessarily a Vans employee any longer, but he's been around Vans since 2004. He came as part of the acquisition and he led the brand as the brand President from 2009 to 2016. He's part of my executive leadership team today. Kevin is responsible for our Asia Pacific region. And as one of our executive leaders, Vans reports into Kevin as part of how we've structured our business reporting cycle. So excited to introduce Kevin and really encourage you to enjoy today. We're excited to tell our story and I look forward to seeing you all at lunch later on today. Well, it's good to see everyone again here in California. I think it doesn't seem that long ago back in 2012 some of you might remember me standing on the stage in a little place called the House of Vans in Brooklyn. And first sharing out the story of Vans and it's quite a different time today, but I think it's good that we take a step back first. So I'm the only one standing between you and where we are today and where we're going, but I think it's good that we take a look at history first. And I always think it's important to understand where the brand came from. So when I talk history, we're going to go way We're going to go back to pre acquisition. It was a very different time at Vans. I joined Vans in 2002 as the VP of Retail with the goal of turning around our D2C business. And as you can see, sales for the 3 years prior to acquisition were essentially flat. Profits were declining and the brand was essentially irrelevant to core skateboarders. Now that might seem crazy when you think about Vans as a skateboard brand, but ActionWatch data, which is the primary indicator many of you know of success in core board shops actually didn't show Vans as a key resource from skate footwear. So that was a really scary time. Where was Vans business being done at that time? All in the value channel. So there was a lot of work to do at that time for this brand. At that time though VF stepped in and decided to make a bold move, acquired a brand that was struggling, acquired its first footwear brand, and the reality of it, we were still very early in our activity based lifestyle brand acquisition model that started with North Face just a few years earlier. So where do we go from here? Let's talk about Vans post acquisition. From just over $300,000,000 in sales to $3,000,000,000 now, From mediocre gross margins to greater than 60% gross margins. From essentially no operating profit to over $700,000,000 in operating profit. A highly successful D2C business, which you'll hear more about later, now balancing the equation and having a balanced wholesale D2C portfolio with a really growing digital business. And activating international platform has allowed us to balance out the business that once upon a time was almost completely California based. So not only is Vans our largest and fastest growing brand, but it's also now one of our profitable brands. It's a very, very different time than what you just saw pre acquisition. So of course that bears the question, how did this happen? So let's talk about that for a minute. Going back to 2,004 when we first got acquired, Steve Murray, who's also part of our VF executive team, took on the reins from his CMO role as President of the brand. His goal was to reengage the brand as an action sports leader. That was his first priority. Steve said about putting in place a product segmentation management process and a marketplace management discipline, while at the same time integrating us into the VF Corporation. That meant taking on VF Financial disciplines, that meant activating our global supply chain and that meant looking at our international platforms and how they could help leverage the brand to get to next. So those were key things Steve focused on, and we were very successful in that. By cleaning up distribution, by focusing in on making the brand more aspirational, we elevated our core classics business, and at the same time grew as a leader now in the action sports business and specifically the core skateboard footwear business. We began the process of reengaging and reemerging as an action sports leader. Stepping ahead, as Steve said, I took over the reins of the brand in 2,009 as Brand President. And what we really noticed was that Vans core cultural elements of 4 pillars of action sports, music, art and street culture gave us greater permission. We really felt there was something more there, because when we talked to Avid Vance wearers, they were so passionate about what we stood for. And we wanted to understand more about that. So we engaged VF's strategy team and we said help us do deep consumer insights on a global scale. And we engaged on a really deep process to really understand everything there was to know about our consumers in 11 countries at that point. And it really helped us reveal something. As we talked to skaters, artists, musicians and street culture icons, we learned that they really just wanted to celebrate and share their self expression. So as we looked at that, whether it be the streets of L. A. To the runways of Paris, the street boutiques of Tokyo to music stages everywhere, we knew that they really valued our skateboard heritage, but also taught us something bigger about the brand. And that was that the brand really stood for something more and had a bigger purpose and a bigger calling. And that was this opportunity to celebrate creative expression in youth culture. This was the moment that we decided to move beyond the core, beyond skateboarding only and recognize what Van's bigger potential was beyond the core. Doug Paladini, our Brand President today was with us through that whole journey. Doug joined the brand just prior to acquisition as VP of Marketing. During my tenure, stepped into the role of General Manager of North America. And as Steve said, in 2016, as Vance celebrated its 50 year anniversary, I turned the reins over to Doug to take on the Global Brand President role. So before I bring Doug up though, I want to share something that's a little more personal in terms of the story about this. And when I talk to consumers about the brand, you often get a really unique story from so many people about what this brand means to them. These deep stories about how important Vans was to them. But at the same time, I meet people who still think it's an inexpensive canvas footwear brand for 15 year old boys. That tells me there's still a lot of potential for this brand to grow. To help them understand the deep stories you will hear in a minute about this brand. I grew up just outside of New York City, wandering the streets of Manhattan as a preteen, never been to California, had no idea who Vans was, didn't know a single person with a skateboard. But at the same time, I had a passion for art and I had a love of music. There was a struggle failure at art school for me in there somewhere, but played guitar in a bunch of bands as a kid. When I met this brand, I fell in love personally with this deep culture of this brand and what it really stood for. And when I met the brand professionally, I realized there was a ton of unmet potential. So as you really think about what this brand stands for, it's really something that consumers can connect very, very deeply with. There's a mission and a purpose to this brand that's about elevating and celebrating creative self expression in people. And I think that's the thing I'd really ask you to understand about it. And the best person to explain that is my 14 year colleague and our Brand President, Doug Palladini. Thanks, Kevin. Good morning, everybody. Welcome to our new home. As I was telling some of you guys this morning, this is the first time in our 52 year history we've actually owned our own home. So Steve and Scott and everyone, thank you so much for that. When Van started, our home was attached to the factory. Eventually, we upgraded to be attached to the distribution center. And we finally graduated to having our own place. So we've tried to fill it with as much Van Doren spirit and Van's culture as possible. I hope you get a chance to see that. I know at lunch you definitely will. So I'm very much looking forward to that. As Kevin mentioned, I got my job offer the day that VF announced that they were buying Vans. So this is my 15th year working for the company. It's been a true pleasure. I'm very proud of what we've achieved and what we will achieve going forward. And I'm also very proud of the leadership team that you're going to hear from today. I think the people who run this brand globally represent the finest skill set and cultural acumen for our brand of any brand in the industry. I really believe that. And I think after today, you will too as well. So by now, I'm sure everyone in this room and everybody listening on the webcast will have seen the press release from this morning. So I'm not going to be breaking any new news. But I do want to spend a little bit of time getting underneath the news from this morning. So we're going to start there. All right. So as we discussed as we begin to discuss Vans outsized results today, I think it's important to keep in mind that our growth trend has been consistent and meaningful since acquisition, all right. So as both Steve and Kevin talked about, velocity currently, absolutely, but this has been a steady climb since acquisition for us. I think that's very important to keep in mind. Our first tranche of growth, as Kevin talked about, was based on returning to our action sports roots and reinvesting in our leadership where we came from, very important first step to reset the foundation for our brand. Then in Phase 2, under Kevin's leadership, Vans opened its lens by moving creative expression to the center of our brand and expanding our fear of influence globally. So Vans now in our 3rd growth phase that I have the pleasure of working on, Vans is focused on bringing more fans into our worldwide family, while doing more to reward our loyalists at the same time. And we do that by remaining very sharp and very clear about who we are and who we are not. We're going to talk a lot about our point of view today. So way back, way back to 18 months ago, you'll recall that day in Boston, where we set what was then we thought on a very ambitious 'twenty one target of $3,300,000,000 based on 8% to 10% CAGR. We are very proud to share this information with you. But quite a bit has changed since then. And it's time for us to update this for you. So today, what we are saying is that we have achieved and moved past that 2021 goal now in the middle of 2019, right? So again, that velocity, that acceleration that we're all aware of is really prevalent. And as a result, we've taken a new look at what our future growth actually looks like. And that was the premise of the release that you all saw this morning, where we're now saying that in fiscal 'twenty three, we believe we can achieve a $5,000,000,000 target, 10% to 12% CAGR. And I personally like the 5b in 23 phrase. I think that has a very nice ring to it, doesn't it? So one of our primary objectives today is to offer to you meaningful and significant reasons to believe that our growth will continue for the foreseeable future. That is why we're here today. That is the goal of me and everyone you're going to hear from. So I'm going to start by just talking a little bit about Vans core brand tenants. These are the foundations, the foundational beliefs that guide everything that we do here at the brand. All right, so let's talk about it. The first one is the concept of open to anyone, not for everyone. Vans is an inclusive brand by nature. When we meet you for the first time, we welcome you into our global family, no matter where you're from, no matter what color you are, what you believe in, we are truly open to anyone. But we also understand that we aren't for everyone and being clear about what we stand for, giving consumers an informed choice. This is vital to how we build meaningful points of differentiation, a distinct position and a competitive advantage in our marketplace. And this is what our consumers expect from us. We also so we really strongly believe in this premise of being clear about who we are and who we are not. Now some brands are rooted in basketball, others compete on a heritage of soccer, some come from the world of track and field, but Vans is rooted in skateboarding. Now skateboarding is very different because skateboarding is an individual pursuit that's loved by people who prefer creative individual expression over the team sports, over rules, over referees, okay? Skateboarding is based on the premise of creative individual expression and that is a perfect foundation for the Vans brand. Our pillars of art, music, action sports and street culture give us a clear identity and a very sharp point of view. We remain unfazed by fads that come and go like the weather, neither is ubiquity our objective. But if you're inspired by creative expression, you're welcomed. Then there's a concept of imperfect equals beloved. This one means a lot to me personally and I'll tell you why. Because some brands foster this concept of collection, Boxes of shoes never worn neatly stacked in closets forever in mint condition. At Vans, we embrace imperfection. Shoes broken in by experiences work through to the threads, use for fun for bringing to life who you are at skate parks, at concerts, at parties, on dates. Because people love our shoes and the experiences that they embody, they often post their beloved shoes online as homages to lives well lived. These are real images posted from our loyalists in our loyalty program on our social media platforms. And they represent their favorite well worn and beloved shoes. Embracing imperfection sets Vans apart, but it also strongly supports our purpose of enabling creative expression. Let's talk about the concept of checkerboard, not checkbook. Vans isn't the biggest global sport lifestyle brand, but we are the most connected to youth culture. Vans doesn't have the biggest marketing budget among our competitive set. Instead, we focus on creating meaningful grassroots interactions that build lifetime brand loyalty unlike anyone else. Vans doesn't spend 100 of 1,000,000 of dollars on advertising campaigns, but we do fund efforts all over the world to bring our brand purpose to life by enabling creative expression across our cultural pillars. That's what we mean when we talk about checkerboard, not checkbook. It's not about the most money at Vans, it's about the most meaning. An often repeated mantra at this brand is global consistency with local relevancy. Vans has grown for those of you who have followed us for quite some time and I know a lot of you have, beyond California, beyond the United States, beyond the Americas to about 85 countries around the world in which we bring our brand to life. This is based on a globally consistent strategic framework, product lines, retail footprints and marketing message that are enabled by the amplification that comes through these shared stories. We understand that embracing geographic and cultural nuance is also essential and that's where the local relevancy comes in. Regions are empowered to add layers of localized product and brand activation as well. As an example, the Vans Asia team created a China specific marketing and content plan for last year's 2017 Vans Park Series Championships in Shanghai and that was great success. And Scott Basham, who leads our APAC region, will talk a little bit about that when he comes up. Hungry and humble is how we act as a brand. At Vans, we don't believe in this concept that the end justifies the means. In fact, we believe the means actually generate the end goal, which is why we describe Vans as a culture led brand. Despite our incredible success and all accolades that accompany such performance, everyone who works at Vans all over the world remains focused on acting with humility, saying thank you and maintaining a brand with whom our partners prefer to do business. Another negative byproduct of success can be complacency. So we fight any semblance of satisfaction by remaining hungry. We are never self congratulatory. The Vans brand celebrity here today, Mr. Steve Van Doren, he's the son of our founder, as Mr. Rendell talked about, is the human embodiment of this concept of hungry and humble. And he says thank you to our fans with every burger he serves. Steve is not comfortable to sit in the stands of an event and only know the person on his left or his right. By being out there in front and serving food to our fans, Steve gets to interact with them directly and let them know a little bit about what Vans stands for. And while he serves you lunch today, please ask him about that, because as Steve mentioned, we do think this is really part of what sets our brand apart. When I talk about our brand tagline off the wall, I talk about it as a state of mind. It's our core tenant about thinking differently. Off the Wall has none of the traditional boundaries of age, of career or adherence to tradition. If you embrace creative expression, then you're a Vans family member, which is why Vans is a rare brand in which grandparents, parents, teens, even babies can wear our product in the same family at the same time without any brand fallout, very distinct position for Vans that we think is quite powerful. Now to build on top of these core tenants with details about our strategic acumen, I'd like to welcome David Gold, Vans VP of Strategy to the stage. David? Thank you, Doug. Good morning and welcome. When I graduated college, I accepted my first job working on Wall Street covering the retail sector. And today, many years later, I have the first opportunity to attend an Investor Day sitting on the other side of the table. So I'm particularly excited to talk to all of you today about our vision for Vans. Over the next, let's say, 15 minutes, I'm going to talk to you about our strategic priorities and how we bring those to life in the marketplace. Doug talked about our next phase of growth. And we believe that our strategic discipline and operational excellence will be absolutely vital to our success as we embark on that phase of our journey. Now I'm guessing that before you all became analysts and investors, when someone said the word vans, it conjured up specific images in your head. You may have thought about a small Southern California footwear brand or you may have thought about the skaters you went to high school with who wore our shoes. And while that perception is based on the heritage of our brand and was certainly true at one point, it no longer is who Vans is today. In 2018, Vans reached $3,000,000,000 in sales. We sold over 85,000,000 units of footwear and apparel in 80 countries around the world. Now you don't need to be a consumer insights expert to know that you can't do that by selling exclusively to high school skaters in Southern California. While skate is still the center of who we are and it always will be, we are more diverse today than we've ever been. We don't target skaters. As we talked about, we target expressive creators. It's a more diverse category. They express themselves not just through skate, but through our 4 pillars of action sports, art, music and street culture. All of this is to say that Vans is more prominent, more global and more diverse than it's ever been. Our consumer is not just one thing and Vans is not just one thing. Neither Vans the brand nor our consumer fits neatly into any individual category or stereotype. Our success and diversification means that we face 2 simultaneous challenges. 1st, we must stay authentic to who we are as a brand and true to the core consumers whose passion and loyalty have driven our success for the last 5 decades. As Doug discussed, we have built this brand based on a clear and powerful promise to those consumers and we know that we must reinforce that promise with every single action we take. Meanwhile, we must build on our momentum in the marketplace. We must create lasting relationships with the new consumers who are discovering Vans for the first time. Converting these new consumers to loyalists is the key to translating our momentum into long term sustainable success. Fortunately, we believe that it is that consistent and clear brand promise that has attracted those new consumers to Vans in the 1st place. Therefore, we feel confident in our ability to authentically and simultaneously speak to both the loyalist and the neophyte. Now this slide may and should look familiar to a lot of you. Last year, Doug walked you through the key strategic choices we made to grow our business. These are the fundamental decisions that define our long term strategy and they have not changed since we last spoke with you. Most importantly, we are focusing on continuing to extend and deepen our relationship with consumers. At the end of the day, all of our initiatives rest on the foundations of the powerful relationship we have with the millions of Vans fans who love our brand around the world. Meanwhile, we are on our strong heritage while investing in innovation in both footwear and apparel. The core of our business will continue to be our iconic footwear product. This is the same product that's been synonymous with Vans since 1966. However, we will leverage the power of our classics business to meaningfully grow our footwear newness and apparel categories. Our investment in innovation largely through the lens of skate performance is generating significant value with technology and consumer oriented solutions that make our brand and our products more relevant to more people for more of their lives. Now, since the first day we opened our doors in 1966, we have always been a direct to consumer business. But despite that long history and our recent success, we know that the retail industry is transforming dramatically and we intend to be at the forefront of that transformation. We are focused not just on retail expansion and operational excellence, but on changing how we play the game. We won't just do more of the same. Instead, we will evolve and progress this business to make it more relevant to our consumers in a rapidly changing world. I mentioned previously that our business is no longer about one state, one country or even one continent. As we continue to expand our global presence, we have a strong focus on increasing our relevance with the Asian consumer. Since we began operating in Asia in 2,008, we have expanded rapidly growing at an annual rate of over 25% per year. That said, we have just begun to scratch the surface of our potential in the region. To be clear, this isn't just about opening new stores and selling more stuff. The rest assured we do intend to do that as well. But our Asia strategy is really about inspiring and connecting with the expressive creator, allowing us to both increase sales in the short term, while more importantly building the relationships that will fuel our long term relevance and success across the continent in the years to come. Since we first introduced these concepts to you last year, we've been hard at work and already have gained significant traction against our goals. I'll offer you a small snapshot of this work, but you'll continue to hear about this throughout the day as our management team talks about what we've been up to. Have continued to build meaningful relationships with advanced consumers by powerfully reinforcing our purpose of enabling creative expression. We are particularly proud of our brand campaign over the past year, which emphasized the power of skateboarding to enable creative expression as well as empowering women around the world. This campaign was linked to a series of events that we put on to teach thousands of women and girls to skateboard for the first time. Last year, we launched the Ultra range, a product that embodies our innovative approach and was our largest single global footwear launch ever. The Ultra range launch was met with such success and enthusiasm by the Vans consumer that in our 2nd full year since introduction, we've doubled our bookings. Now, I'm guessing that you guys follow our business and understand what the direct to consumer results have been over the last year. But more than the outcomes and the headlines, we're more excited about what has powered those results. We have introduced new store formats designed to cater more specifically to our highly tailored customer segmentation. And we have infused a test and learn approach to learn and change our store formats, experiences and operations. As we focus on our brand's e commerce building, we recognize that it represents a powerful and important commerce channel. However, we are more interested in leveraging e com to build deep relationships with our consumers than how it functions as simply another way to sell our products. To this end, we have accelerated our focus on brand storytelling digitally, including the expansion of our vans ever changing and ever evolving customization platform. Similarly, while we've had great success in Asia, expanding over 27% since we last spoke with you, We are most proud of how we have built the consumer relationships with the Asian consumer. We have created experiential events such as the Vance Skate School, which is our regional skate clinic meant to introduce the Asian East to skateboarding. These events are inspiring expressive creators and forging the bonds that will make our brand as powerful in Shanghai as it is in Orange County. While our focus on and commitment to advanced strategic choices has not changed, there have been important developments and updates in the last year that I want to talk to you about. Over the last year, we have attracted millions of new consumers to our brand. Importantly, we haven't attracted these consumers by changing who we are. Instead, we have brought new consumers to our brand by telling our authentic story more powerfully and with more volume. While we have experienced strong growth across every single aspect of our business, including all of the strategic choices that I just walked you through, the sharpest upturn has been in our classics business. Now there's one recurring question that we always get at this point and I know it's on your mind. So rather than waiting for you to ask it at the end, I'll ask it right now. Is this a trend? Well, clearly there's a trend for consumers to buy more advanced products. But we feel confident that this trend is no accident nor is it a mere whim of the fashion market. Instead, we are confident that this trend is the result of deliberate actions that we've taken to build our brand and create connection with our consumers. It is incumbent upon us if we are to continue this success to leverage that momentum that we're experiencing into long term sustainable growth. The same way that we've done time and again in our 50 year history. We will do this by accelerating our investment in getting to know and building our relationship with our consumers as well as building the capabilities that will translate our success into long term capabilities that will grow the business over time. Over the rest of the day, we will provide the details about how we intend to do this. Now, let's talk about that growth opportunity. As both Steve and Doug had pointed out, we have grown at 17% per year since 2004. And yet we feel that we have barely begun to scratch the surface on the true opportunity ahead of us. As this chart shows, we have a mere 6% of the addressable footwear market and 1% of the addressable apparel market. When I stop to think about where this growth is going to come from or how we're going to continue to grow given all of our success, I think that we're only 1 tenth the size of our largest competitor. But this isn't just a market story, it's also a consumer story. Our proprietary research tells us that the expressive creator is 12% of this market. Just as importantly, the core halo markets, those that are most influenced by the expressive creator represent an additional 28% of the market. And that's a global consumer. So when we talk to that consumer, yes, it resonates in the U. S, but it also resonates from Shanghai to Sao Paulo. And in key areas of our business, I genuinely believe that those market share numbers actually undersell the potential opportunity in front of us. While we are a leader in classic vulcanized footwear, the truth is that in almost every other category of footwear, we're a very small player. Let's take the athleisure footwear market for example. That's a $10,000,000,000 annual market in the U. S. Alone and we have virtually no share there. That's just one potential avenue for growth that lies ahead of us. Meanwhile, our e com business is another great opportunity. Forrester predicts that by 2021 footwear, apparel and accessory sales online will represent $500,000,000,000 Obviously, Vans represents a small fraction of that. But this I think is a good indicator of how much space we have to grow into what is our most profitable channel. And finally, despite our rapid growth in Asia, this market opportunity remains largely untapped. In China, 1 in 2 people is familiar with Avance brand. Let's compare that with some of our smaller competitors who enjoy 70% brand awareness and the market leaders with over 90% brand awareness. These represent just a few of the avenues for growth, but I believe they reflect the massive opportunity that remains in front of our brand. Now our success is not just driven by what we do, but by how we do it. Great strategic choices poorly executed don't drive impact. We believe that our processes, our procedures and our operations are the key to translating our strategy into action and ultimately into results. We believe there are 3 keys to our approach that will serve as the foundation for our success. 1, the aligned priorities and investments across Vans 2, our ability to bring our brand to life in a globally consistent and locally relevant way and 3, our access to the scale and power of VF. Everything at Vans starts with the unchanging building blocks of who we are. Our consumer, our brand purpose and our culture are the foundation on which everything else we do rests. The long term strategic choices that we have shared underpin where we are investing our resources in order to distort our business growth. We are committed to these decisions and we are actively investing behind them. But strategy without action is merely words on paper. It's our short term planning and go to market processes that connect who we are and our strategic decisions to action in the marketplace. It is these processes that coordinate the efforts of thousands of people around the from our global brand president to our store associates on our sales floor. These processes ensure that the ideas generated at our global and regional headquarters translate into the product, marketing and distribution decisions that our consumers experience every day. And more importantly, this is what allows us to be globally consistent. As we think about how we want to show up and what we want to stand for, we reflect on the heritage of Vans, the brand we have built and the global megatrends that are shaping our industry and our competitive environment. We translate these factors into a set of globally consistent elements supporting our business' strategic choices. As a result of this approach, our brand shows up consistently around the world. So if you encounter Vans at a wholesaler in Paris, at an own store in New York or at a House of Vans event in Hong Kong, you are going to have the same core experience and we will deliver against the same promise no matter where you are and how you experience us. But we must also show up in each and every region in a powerful and local way. While the feeling of a band event in California and Brazil must be the same, we recognize that the expressive creator has different attributes and different needs wherever he or she lives. We begin by understanding the nuances and needs of all of our brands consumers, the local marketplace and the nuances in the competitors wherever we are. Then we identify how to adapt our globally consistent work to bring to life our product marketing distribution powerfully locally. This allows us to be relevant, fast moving and agile and allows us to bring the brand to life in a powerful way that enhances our competitive position everywhere we show up. Globally consistent and locally relevant aren't 2 different things and they're not mutually exclusive. Actually, they are two sides of the same coin. And when we execute on this vision successfully, they create a strong and healthy brand dynamic, consumer engagement and financial success around the world. Finally, Vans leverages the scale and capabilities of VF to gain distinct competitive advantages. VF's multi brand scope allows us to perform comprehensive consumer research. We invest in large scale projects across brands to map the consumer landscape and benefit from understanding the attitudes and behaviors of a wide range of consumers, thereby both broadening and deepening our focus. This investment supports our demand creation and makes us more effective at connecting with our target audiences. The VF Global Innovation Center or GIC represents another way that we benefit from our relationship with VF. The GIC employed experts in fields as diverse as cognitive science, polymer chemistry and kinesiology. As a standalone brand, it would be difficult, if not impossible to access this type of expertise. But VF powers the R and D behind such innovations as new rubber compounds, heat and moisture management and advanced manufacturing methods. Finally, VF scale allows us to effectively manage a geographically diverse set of manufacturing set of manufacturing centers that cover 50 primary factories as well as 20 countries around the world. In 2017, this meant managing a network producing about 85,000,000 units of footwear and apparel. The size and scale of VF's cross brand portfolio gives us access to advantage pricing and enhanced flexibility in ways that we could never access on our own. Over the last 50 plus years, Vans has grown by staying true to who we are, by listening to our consumers and by enabling creative expression. Vans' strategic choices and executional discipline will allow us to continue that legacy in a more aligned and powerful way. Over the next 2 hours, our Vans senior management team will elaborate on the decisions that we have made and share with you details about how they intend to bring that decision to life in the marketplace. With that, I'd like to introduce Nick Street, our Global VP of Integrated Marketing. Thank you, David. Good morning, everyone, and welcome to our house. The title of this section is Deep Consumer Connectivity, and I'll be talking to you about how our ability to understand and connect deeply with our consumers is an integral part of Vanda's success. Our strong deep consumer connectivity is built on understanding our consumers' needs and putting the consumer at the center of everything we do. Our approach began at the very origin of the brand in 1966 when we made bespoke shoes for our customers wanting it their way, and we've stayed true to that thinking ever since. At Vans, I hear so many personal and meaningful stories, stories about the first Skaterix our consumers landed, the first concert they went to, how they engaged how they got engaged, even how they got married in their shoes. That's what excites me when I turn up for work every day. And these stories really exemplify the deep emotional connectivity Vans is able to build and what lies at the center of our approach to demand creation. As you've heard Doug and David speak, the expressive creator is our bull's eye target consumer, informing every decision we make and lies at the heart of our demand creation strategy. From that foundation, Vans has 3 core elements that define our approach to demand creation. We begin with our overall purpose of enabling creative expression. This principle underlines everything we do as a marketing organization. Consumer life cycle management and strong tiered brand activations is a key enabler for us to further understand our consumer behavior and to support them on their journey of creative expression. Building on this foundation is a multifaceted approach to creating powerful, purpose led content through our ambassadors, events, brand and product campaigns. It is vitally important for us to have a clear understanding of our consumer, who they are and how we fit into their lives. We've identified the expressive creator or the EC by talking to thousands of consumers worldwide. The EC is distinct and globally resonant across genders and economic classes. ECs much to the beat of their own drum and they tend to care less about fads or trends in fashion. Instead, expressive creators treat their personal style as a malleable platform for creative self expression that is ever evolving. Creativity is a lifestyle for the EC and touches everything that they do. Their goal is to put something new and considered into the world. They are drawn to forward thinking brands such as Vans that share this ethos. The EC is multifaceted, eclectic and diverse and so are we. Vans delivers more than just the product. We support this EC in a way that enables creative pursuits across action sports, music, art and street culture on top of great product, all of which gives Vans consumers a rich and lively canvas to express themselves who they are. As Doug mentioned in his introduction, Vans is a brand that is open to anybody, but is not for everybody. Our research shows that advanced consumers are looking for a strong point of view from us, and they want to know what we stand for. Authenticity is key with the expressive creator, who is a sophisticated global consumer that can't be advertised to by our traditional methods. ECs operate globally, but they care deeply about what we do for them locally in their communities and in their cities. Instead of advertising, they expect brands to provide them with opportunities to express themselves the way that they choose to. Vans attempts to deliver on that promise in everything we do. Vans builds relationships with our consumers when we focus less on advertising and more on providing content and experiences that deliver on this promise. The deep connections from these genuine interactions allow Vans to become a beloved brand whose role in EC's life means more than just providing functional foot coverings. In the 52 plus years that Vans has existed, we've built tremendous relationships with tens of millions of individuals. Consumer life cycle management or CLM initiatives are the next step in evolving these connections. CLM tools allow us to shift from mass marketing to a 1 on 1 understanding of and a relationship with our consumers. As part of our CLM efforts earlier this year, we launched Vans Family, a loyalty program focused on building richer interactions and improving the experiences for our best consumers. In less than 6 months, we've already attracted more than 3,600,000 members the United States alone. Our active Vans family members are some of our most loyal and engaged consumers, driving 60% more spend than non members. The loyalty program allows us to achieve 2 goals: 1st, to reward our most faithful consumers with exciting experiences and opportunities to engage in our brand further and second, to understand our consumer on an individual basis in a way that was science fiction just a few short years ago. It is this one to one understanding that powers our CLM effort. Consumer life cycle management is a powerful enabler both internally and externally. Internally, CLM is generating key insights to help drive our merchandising planning, our product development and our overall business strategy. We are able to learn who our consumers are, what they're interested in and how they respond to our products. This can then ensure that we build the right product to meet consumers' ever evolving tastes. Consumer lifecycle management is also a powerful external enabler. It allows us to further drive meaningful consumer experiences as a core element of our strategy. For instance, we can better personalize marketing by ensuring that the right messages are being sent to the right people at the right time, while also utilizing loyalty as a vehicle to meet our most engaged fans. Although our loyalty program just launched in February, it is already delivering the kind of deep insights that will allow us to better serve our consumer. The data shown here is representative for the U. S, so it's not a full you, but it gives some powerful insights. Brands family allows us to know more about our consumer than just their passion for the brand. For example, we know who they are, what types of creative expression they pursue, how they interact with our brand and our product and as a result, we understand how we can enhance their brand experience. Take the shopping patterns as an example, reflecting how Vans is not just one thing, neither our consumers who are interested in a variety of footwear styles. As you can see here, they're interested across the old school, the slip on and the authentic. Another great insight is the balance across our 4 cultural pillars, clearly showing the opportunity that we have with music and fashion with our consumer. CLM will allow us to leverage learnings to enable our consumers' creative endeavors and continue to improve their brand experience. Vans' approach is to support our consumer across our 4 pillars of creative expression, action sports, Art, Music and Street Culture. These 4 pillars of creative expression are core to our consumer and our brand. But we don't just view the world through these pillars. They instead enable the expression of our consumers within each pillar through strong cultural advocacy. We activate them through our events and experiences, emerging media, social and user generated content as well as through our D2C and wholesale channels, where our integrated product and brand marketing strategies drive emotional connections. The 4 pillars are the foundation on which we engage and connect with our consumer. Skateboarding is Van's original version of creative expression and our primary cultural connection. Skateboarding is part of what differentiates us and allows us to create powerful messages. Our involvement with skateboarding started in the early '70s here in Southern California with the birth of modern skateboarding when the kids chose Vans as their choice of footwear. Ever since that day, we've had a very organic connection to skateboarding culture. This was not created by an advertising agency and it isn't a manufactured concept. Instead, Vans and Skateboarding is a highly organic connection that speaks very powerfully to the authentic heritage of our brand. No amount of money can buy this type of authenticity. This organic mindset is one that we will always have in order to fuel future growth. Skateboarding is also a substantial influence on the broader world. Skateboarding is a culture, a way of life, an ethos and a business. Vans enables the holistic skateboarding experience from making the shoes that the best athletes wear to creating global content to building skate parks and creating innovative global event platforms for skateboarders in which to compete and express themselves. Across more than 5 decades, the influence of skateboarding on popular culture has increased in resonance. Vans relevance in skate culture is the catalyst for meaning in other important cultures. It permeates music, art and street culture. Many of the most influential fashion designers and performers of our day pull liberally from skate culture. Our skate authenticity takes us into much wider circles and opens the aperture of what our brand can stand for. One example of skateboarding's larger pop culture influence that stands out is Jaden Smith, who is the star of the all female skateboarding movie, Skate Kitchen. Skate Kitchen has received countless of press hits outside of the endemic media and has opened up many newcomers to skateboarding, especially women. This is a great example of how skateboarding's reach continues to broaden across media and culture. Popular culture continues to be directly influenced by the creativity that comes out of skateboarding. And skateboarding empowers all ages and genders. For example, we established the Advanced Park Series in 2016 to inspire youth and grow participation by defining a global foundation for park terrain competitions. In addition to growing participation, the series is making an inclusive impact as skateboarding's 1st world championship tour for both men and women. By giving our consumer regardless of age or gender a path to professional skateboarding, it promotes the larger creative and inclusive culture of skateboarding that bleeds vans. Advance purpose drives everything we do. And to enable and inspire creative expression, we embrace the power of storytelling, which is where brand attraction and consumer engagement begins. Stories may support our products, but they're brought to life through people. Our athletes and brand ambassadors play a critical role in providing authentic and inspiring storytelling. They meaningfully advocate on behalf of the brand beyond own content, media campaigns and brand platforms. Now there's liking something on social media and then there's physically showing up and getting involved. Vans doesn't settle for the former, but we invest our money to ensure the latter. We meet our consumers face to face and as a result build strong Thai bonds with them. The rich enabling experiences we offer through grassroots, global platforms and regional events attract new consumers, build bonds with recent adoptees and reward our loyalists. At our global House of Ant activations, we enable tens of thousands of consumers through creative workshops every year, And those are just a small subset of the hundreds of thousands of people coming through our vans doors to experience our brand. Creating experiences and embracing the power of grassroots marketing is something that we've done as a brand since day 1, since before it was a trendy marketing term and it remains a core strength of ours today. We've built our experiences over decades with passion and patience and we've always innovated to ensure that we stay close to the band's next generation of consumers. The stories that come through our activations and strong time moments then feed organically into our global broad reach moments. These moments maximize our Stories exposure as every region globally rallies together to unify the brand across a consistent message. By having a backbone of authenticity in our broad reach messaging, we're able to attract not just new consumers, but really deepen our engagement with our loyalists globally. No amount of advertising can generate this type of distinct competitive advantage. A key aspect of this are digital platforms, which represent the intersection of our focus on our consumer and our approach to bringing vans to life. We converse with a large fan base on all major social media channels globally with over 40,000,000 followers across our global platforms 1 to 1. It's important for us to ensure that we have deep engagement with our fans and it is an important performance measure for us. We see our brand social engagement at about 5 times above industry standard. Whilst it is important for us to attract a new consumer, it is more important that the consumer we reach have a meaningful connection with us. Year to date, in 2018, our athletes generated more interactions than the entire roster of the NBA champions despite having 80,000,000 less followers. Let me reiterate something here. The Golden State Warriors, who feature some of the highest profile players in the world and the champions of 1 of the most powerful sport leagues, have less engagement than our athletes. In a world where our audience chooses what content they want to see and when, the live broadcast of our events are another great example where we're seeing engagement range of about 10% above average viewing time for the Vans Park series. Specifically, the 2017 finals in China saw close to 2,000,000 viewers. Now this is a really powerful metric in a country where skateboarding is still in its infancy, but shows that the content and message that we provide resonates. Just because we focus on enabling creativity doesn't mean we don't think about the math side of demand creation. We are operating with powerful KPIs across all our campaigns and brand activations to measure impact and returns from all Van's marketing efforts. A great example of Van's multifaceted approach is how we brought the story of our Tita V Geyser to life over the course of 2018. This is the story of a remarkable young woman from Bangalore in India who inspires other to skateboard for a Girls Skate India initiative. She sparked a movement in India and told a relevant story for our brand and the culture of skateboarding. Her story was so inspiring that we knew it had to be told. This story reflects the purpose Vans wants to uplift. We shined a light onto the movement and enabled it to become something much bigger. We embarked on a global mission to teach thousands of women across 100 Strong Tie events to skateboard throughout 2018. These activations make the GOES KATE India story real, bringing to life builds meaningful bonds and actively enables creative expression. I mentioned the importance of authenticity earlier, and this is really a great example of a real story that deeply resonated with our consumer. There's nothing made up here. These are true connections with our consumers that organically came to life through our support of Vans culture. These are true connections with our consumers that organically came to life through our support of Vans cultural pillars. As I mentioned earlier, the human story comes first for Vans. Only with this foundation do we then move beyond the strong tie to a more broad reach approach. Media campaigns and larger activations reinforce our purpose and help reach a larger audience by amplifying organic meaningful content. For the Girl's Skate India story, we created multiple pieces of content ranging from a 5 minute mini documentary for deeper engagement to 15 second snackable content for social media. The video we're about to show you is not just a powerful story, but an example of how our purpose led approach is resonating and constantly improving consumer connectivity. This purpose led content saw 2 to 3 times higher engagement than similar content we've done in the past. With that, let's take a look at the video we amplified via paid media. In India, girls have been oppressed for so many decades now. They are expected to like be girly and like do all this girl stuff. But when you see girls skating for themselves and having fun, it changes the perspective of what a girl can do. So I've tried to promote the sport with different girls. You guys know this, right? Yeah? Yeah? Everyone knows it? Nice, sneaky guys. Okay. Alright. Let's go over here. You learn self confidence through skating, the more girls get into that, the world will change. I feel like when anybody skates, it really empowers you. Skateboarding allows you that freedom to just choose whatever, be whatever, do whatever. Encourage you to check out the 5 minute mini documentary. Atita also has a great TED Talk, which I would encourage all of you to check out. As part of our ever evolving effort to deliver on our purpose and brand promise, I'm stoked to announce that we'll be launching a new initiative in 2019, our first ever International Checkerboard Day. The objective of this annual event is to bring Vans' purpose to life globally by providing our consumers the opportunity to participate in creative activations and experience why creativity matters. As outlined previously at Vans, we start with purpose first. This creates the moments that then can be amplified into movements. A movement centered around enabling creative expression because we believe that everyone regardless of socioeconomic status, gender, ability or ethnicity, should have opportunities to express themselves. We want to further cement Vans as the brand that enables you to do just that. Vans International Checkerboard Day is an opportunity for us to put a stake in the ground and rally our internal stakeholders, our extended Vans family and our global consumers to come together in a single brand activation around the world. This consumer activation will help people overcome barriers to express themselves creatively. We want to inspire people with the why behind creative self expression. We want them to rally around the idea that creativity is an essential part of being human and that everyone should be able to express themselves creatively. Through this, Vans will also raise money to power movements and enabling creative self expression worldwide. We have great stories to tell and are focused on meaningfully speaking to the Vans expressive creator consumer as our bull's eye. We have incredible athletes, events and product stories that allow us to engage across the generation board And the result of that work yields conversion. You can see it in the powerful results we deliver and we will continue to produce. We are consistent in our purpose, strategy and message. It started when skaters embraced the Vindorin Rubber Company, and we've never turned our back on them to this day. This level of commitment fosters genuine brand love. We inspire and enable creativity daily all across the world. With that, I have the pleasure of introducing Dave Solomon, VP of Global Footwear. Thanks, Nick. Before I get started, I just want to apologize for my nasally voice. But after 17 years on the planet and countless back to schools, my son is still bringing home shitty colds for me. As Nick mentioned, I'm Dave Solomon. I've been with the brand for 18 years and I'm going to share how Vans thinks about our footwear through the lenses of both heritage and progression. So our iconic franchises are the backbone of our brand. The authentic era slip on old school and skate high make up the majority of what we consider heritage or classic silhouettes from the brand and continue to drive a large portion of our business. These are our longest running silhouettes. So remember the Authentic has been around since 1966. They have a timeless appeal and transcend both age and gender. And as Doug talked about, the familial aspect of our brand and the multi generational feel of our brand comes through in everything we do. I can't tell you how many times I've been in the stores and seen a grandfather, his son and the grandson all in different classics. And it's okay to do that. And I think that's a perfect differentiator for our brand. As a brand, we don't just stand for one thing. As Nick discussed, Vans allows you to express yourself creatively through art, music, action sports and street culture. It's with intention that our classics campaign very literally calls out not just one thing. It's the diversity of the Vans product line that is a very meaningful differentiator for us as a brand. This allows us to appeal to different consumers with different products or to extend wear occasions for existing consumers. One of the key benefits of a diverse Classics business is that it doesn't just allow us to offer the right selection of products to fit our consumers' taste and needs, but can also manage our sales across silhouettes in a very healthy manner. As part of our icon management strategy, we are always lifting up different silhouettes to encourage diversity in our business. For example, in 2013, as you see on the screen here, the authentic represented more than 25% of our total sales, while the old school was a small fraction of our business. As we saw the authentic begin to peak and slow down, we were already fueling the old school through a seed scale maximize approach. It's this additional fuel and focus that we put on the old school that has resulted in the expansion we are enjoying today. With all of that in mind, it's important to remember that today the old school represents a significantly smaller portion of our business than the authentic did in its peak. In addition, I'd just like to add that our strategy around icon management has added a lot of discipline to the way we go to market. Even though our heritage product has a long history, we do not let these icons grow stale. Instead, we continue to evolve and energize classic silhouettes utilizing them as blank canvases, so to speak. We keep them trend relevant by applying color, materials, prints and collaborating with innovators across our 4 pillars of creative expression. As you can see from the examples on the screen, our heritage business is truly not just one thing. On screen, you'll see examples of how we continue to bring our footwear icons to life and relevant for our consumer. The first up here is an example of our color theory pack, which really just applies trend right color to all of our iconic products seasonally. It's been a great success for us. The second image shows you a collaboration we're doing with the David Bowie Foundation for spring of 2019. A perfect showcase of how we partner with creative icons to celebrate individuality and introduce new people to Vans. The last image is an example of our cut and paste pack, which is a great example of bringing the DIY attitude of our consumers to life through our iconic products, as well as an example of creating products specifically for our consumers at the top of our distribution pyramid in our most aspirational boutique channels, thereby creating a halo effect for the entire brand. We manage Vans iconic silhouettes seasonally in order to remain relevant and provide energy in the market. This allows Vans to remain agile, but also supports the ethos of not just one thing. We support this strategy through increased SKU investment, a top to bottom approach from our Pinnacle Vault line into our core classics line, a robust seating and influencer strategy, as well as a very pointed product segmentation strategy. A great example of this is over here on the screen. This is an example of a collaboration we did with Look Studios on the Authentic, an example of a style adaptation for women that we did on the Authentic and then just our main in line core classic, a good example of how we can bring things top to bottom from boutique all the way down. Although we've seen tremendous growth in our old school franchise, we've lived with different silhouettes trending at different times in our 52 year history. The difference is how we're managing against these icons and the discipline we're showing in controlling the amount of product we're putting in the marketplace. Historically, Van's approach to managing this business was based mostly on intuition. But today, we've added data and science to better balance the art of growing our heritage business. Progression in skate footwear has been ingrained in our brand across 5 decades of design and development. We were first adopted by skateboarders due to our waffle outsole and the grip it's supplying them on their boards. Our long lasting relationship with skateboarders is based on listening to them and including them in the evolution of our performance driven skate footwear. One of my favorite stories that Steve likes to tell is about how they witnessed skateboarders coming into our stores, and they were buying a new pair of shoes because they were wearing out their brake shoe, the shoe that they were breaking with on their skateboard. So what did the Van Dorn's do? They listened and they started selling one shoe a time. Definitely not something I'm going to suggest that we do going forward. But I think it shows you very clearly how the brand has listened to our athletes and our consumers for a very long time. After that, Vans then began to develop product for the sport specifically. Thus, the very first purpose built skate shoe, which is called the Era was born. This is proof that we've always utilized our athletes not only as ambassadors of our brand, but as our consumers and partners 1st and foremost. More than 50 years later, we continue to partner with the world's best skaters such as Elijah Burrell, who's in the center of this photo, a Vans athlete and partner. Elijah asked for a shoe with more support and board control that also allowed him to skate for longer periods of time. We listened and enlisted the help of our partners in the Global Innovation Center to develop one of our most advanced skate shoes ever. We watched Elijah skate in real time and track the degree of impact his feet were absorbing via the use of advanced footwear or footbed sensors. We then analyzed that data, created 3 d impact maps, as you can see on the far, I guess, right for you guys on the screen, and developed our first ever parametric cupsole, a product that enabled Elijah to skate better and longer. This is how our new technology waffle control was born and will come to life for our consumers spring 2019. In order to enable creative expression and to stand for not just one thing as a brand, Progression in footwear is a critical piece of this puzzle. With the consumer always front and center, we start with insights as a way to pinpoint problems we can solve for Vans fans in their daily lives. These insights or problems can be based on style or performance, either on or off of a skateboard. Examples of this on screen are on the left. That's a view of Anthony Van Englen's new skate shoe, which builds on the Berl Pro with cup sole support allowing Anthony to skate longer and with more control. In the middle, is our approach to creating franchises by building a family of products and iterating against our successful Ultra Range franchise. So a great example there of the 3 d that's in market now, which is doing quite well and then the Gore on the other side. I've got examples of those if anyone is interested after during a break, I can run you guys through that product. On the right is an example of our MTE product, which solves a problem for our consumers by providing classic van styling, while keeping their feet warm and dry in the winter. MTE has been a key in extending Vans into a 4 season brand. The Ultra range is a great example of Vans approached to footwear newness. Pat Gadowskas, one of our elite surf athletes came to us with an opportunity. Pat travels almost nonstop, hauling tons of equipment around the world, and he needed a pair of shoes he could wear from the airport to hiking down a trail to the surf and then out to dinner at night. He couldn't fit multiple pairs of shoes in his luggage, so these had to be versatile enough to work with everything and comfortable enough to wear all day, every day. We focused on comfort and versatility of use in the product and created the Vans Ultra range. Our marketing story was told through the lens of endemic surf with a message that was relatable to a broader range of consumers, get there. Featuring an excellent product, a globally coordinated launch, meaningful message, global activations and a multi year product roadmap, we brought the right product to life for our consumers in a very powerful way. The results have been outstanding. We're on track to deliver more than 150% growth fall over fall, and all regions had successful sell through of the product. And consumer reaction has clearly been fantastic. An additional focus for progressing Vans footwear is centered around testing, experimentation and agility. We have 2 strategies that are directly tied to this approach. The first is our irons in the fire strategy, built to launch more progressive products in a smaller way in order to test, learn and inform bigger future bets. We do several of these a year, apply specific KPIs by region and quickly learn how our consumer is reacting. When we fail, we learn and inform future projects. When we succeed, we will double down on our investment in order to drive commercial success. The second strategy, which we call rapid retail, is aimed at empowering our designers by reducing the distance and the obstacles between their retail associates, and then circumvent all of the other product approval processes. By doing this, we cut about 10 months out of our normal development life cycle. Our first project, which you can see on the screen here, just wrapped and the image you see on the screen is the result, the ComfyCush 1. The consumer reaction in all regions was extremely positive. At very few times in your career, if ever for that matter, do you have the pleasure of presenting numbers like you see here on the screen. To reach these numbers, we will continue to evolve and drive energy through our classics and heritage business, while progressing the brand forward through innovation and deep consumer focus in our newness business. All of this will be supported by our continued commitment to brand right experimentation. Our strategies, marketplace approach and discipline, great product and marketing are all factoring into the wonderful success we've had and see continuing as a brand. Now to speak to you more about Vans growth beyond our classic iconic product or our iconic footwear is Vicki Redding, VP of Global Product for Apparel and Accessories. Thanks, Dave. You're welcome. Good morning. You just heard Dave speak about heritage and progression in footwear. And now I'm going to take you through our key categories and innovation for apparel. Vans is not just a footwear brand. It's a footwear and apparel brand. The history of Vans is linked very closely with footwear, but it may surprise you to learn that Vans started making apparel more than 40 years ago with the introduction of T shirts and socks back in the 70s. As Steve Van Doren, our founder's son and global brand ambassador describes, the meat and potatoes of the original head to toe was a navy t shirt, white socks and blue authentic. In the early 80s, checkerboard became extremely popular fueling our t shirt business with checkerboards down the sleeve and across the chest. And what started out as a few T shirts and socks validates that our consumer loves our brand and gives us permission to create a head to toe brand. Over the past 5 years, Vans has focused on building our apparel and accessories business and we've made significant gains in creating a compelling assortment, attracting new consumers and validating or establishing Vans as a true head to toe brand. Today, we have a comprehensive apparel and accessories business spanning 19 categories that we design and produce. However, to focus our resources, we've identified 5 must win categories, T shirt, fleece, pants, jackets and backpacks. This sharp focus on outfitting our target consumer creates the foundation of our apparel and accessories business. And we've proven that our consumer cares about these categories and wants to buy them from Vans. Vans goal in these must win category is to generate innovation and create franchise styles, which would live in the line season after season, drive volume and become staples for the business. As you've heard from prior presenters, skate is at the core of everything we do and our apparel business is no different. When we think about innovation, it's always through the lens of skateboarding. And just as we aim to make the world's best skateboarding shoe, we want to make apparel that can stand up to the rigors of skateboarding, while providing the style that our consumers demand. Our innovation is focused on fit, fabric, functionality and versatility. And while we think about while we start by thinking about through the lens of skate, we always want to make sure that our key styles can easily translate to our lifestyle consumer. While the entire men's apparel and accessories business has grown at around a 15% CAGR over the last 2 years, these categories have accelerated at nearly a 25% rate, becoming more than 60% of the men's business. Our focus has driven meaningful and healthy acceleration for both these categories and the business overall. I'm now going to walk you through how we bring these franchise styles to life. Our first launch of a franchise style was in the pant category. Our goal was to design a pant that met the demanding needs of our consumer would stand the test of time and could be the centerpiece of our replenishment program. Our design team works extremely closely with our athletes, gaining insights and feedback, so that we can push the envelope on innovation, bringing products to market that can be worn on and off the board. Through these conversations, we knew they were looking for a great fitting classic Chino and a durable fabrication. After close interaction with our athletes and consumer insights, the authentic Chino pan was launched in spring of 2017. This was the most integrated launch we had done in apparel and we experienced success across the globe. Marketing created authentic sorry, marketing created a campaign showcasing our athletes in their element and telling an authentic story. The launch was supported by all regions in wholesale and retail with compelling displays of the authentic chino built out in a pant wall along with table displays. As a result, we outperformed our projections with a 30% increase in 2017 and continue to see double digit growth in the pant category in 2018. The Versa hoodie is the next generation of our franchise styles, employing a multi season seed scale maximize approach. Through our athletes, we heard loud and clear that they wanted a hoodie featuring best in class functionality, durable fabrication, but most importantly, they did not want anything too shiny or too techie. So with this in mind, we took our classic pullover hoodie and in partnership with our fabric mill, we created a durable cotton heavyweight French terry fabrication and added a durable water repellent coating. The Versa also has a hidden patent pending media pocket, which keeps your cell phone secure while you're skating or just cruising around. We seated this style in spring of 2018 with limited distribution in influential skate accounts across the globe and we highlighted the style as Vans hero marketing story, building consumer demand for new iterations that will commercialize the Versa to the broader lifestyle consumer in future seasons. Jackets are our sector's 3rd largest apparel category globally and we've seen double digit increases here for the past 3 years. Applying the same philosophy of classic styling with purpose built functionality, Vans is creating a jacket franchise style. Leveraging the BF Global Innovation Center, we've evolved our process to use rapid prototyping capability, which gives us the ability to review and quickly turn samples with our athletes, gathering feedback on fit, fabric and functionality. The drill short coat is a style that not only serves the needs of our core skate consumer, but it also easily translates to that lifestyle consumer. And you can see these 3 franchise styles that I just spoke about on the mannequin here. We have the authentic chino, the Versa hoodie and the drill chore coat. And also something to mention, this also has a patent pending fully functional hidden hood in the back neck here. And then across on the other side, this teal green fleece is the men's new iteration of the Versa hoodie with the quarter zip. So as Vans apparel and accessory business evolves, we'll continue to have a focused approach on our 5 must win categories, building innovative products that can tell a head to toe story and continue in the brand tradition of listening to our athletes and creating products that deliver the performance they need and that our lifestyle consumer loves. Head to toe, this is a subject that Dave and I speak about on a weekly basis. And it really is key to our continued growth in our apparel business. Our head to toe approach to the Vans consumer is a competitive advantage across all our distribution channels. Showing up as a cohesive footwear and apparel brand allows us to tell powerful stories. Showing that resonate sorry, showing up as a cohesive footwear and apparel brand allows us to tell powerful cohesive stories that resonate with our consumer across multiple categories and sales channels. Where we can tell these powerful stories, we can command more floor space. And what you're seeing on the slides are some examples of how we approach this opportunity. On the left here is a weatherized MTE assortment. And we've been able to leverage the momentum that we've seen with weatherized footwear to grow our outerwear business. By messaging a consistent and meaningful story to our consumer. Similarly, we're able to tell a cohesive skate story with the head to toe look here in the center. And then this approach is supported by our strength in Vans retail to bring assortments to life and share compelling stories with our consumers, as you can see here with our women's elevated assortment. So in closing, our growth has been powered by our focused approach on creating franchise styles in those 5 must win categories, using the lens of skateboarding to build products that not only serve the needs of our athletes, but can also translate to the lifestyle consumer and using a seed scale maximize approach. We'll continue this focus driving double digit growth across apparel and accessories and reaching a significant milestone of $1,000,000,000 in 2023 and representing 21% of the total Vans business. We'll now take a 30 minute break, and we invite you to visit the retail store, and Regina and Michelle will be at the back to guide you over to the store. Goes to the Dance Floor was an idea that Tom brought to Travis and I probably about a third of the way through recording. And it was pretty well formulated by the time that we got to it. The bridge, we changed quite a bit. We had harmonies and changed things here and there, but the song was pretty well formulated. Tom had it by the time that he brought it to us. And it just had the feel of the first song in the record, and I think that it's a good intro to the rest of the album. Where we My dearest, I've missed you very, very much since that last night we were together. We'll hold that night especially in my memories for years to come. I've been turning it over and over in my mind lately. I've read your letter through at least 4 times. You'll probably read it more times before I'm through. I've been sitting here, All right. If we can ask everybody to please take your seats, we're ready to get back into it. Thank you. Good morning and welcome back. I hope everyone had a chance to walk through the mock store during the break and get a feel for where we are headed with our direct to consumer initiatives. I'm David Theiss. I'm responsible for leading Vans global direct to consumer business. And I'm in my 14th year with the brand. For Vans, next generation D2C is about focusing on the consumer and elevating their experience in both retail stores and vans.com. In brick and mortar, we are very proud of our long history as a retailer, but we remain focused on evolving our approach to the network of nearly 20,000 sales associates globally, the overall in store experience and store format strategy. Online, this means a best in class digital experience that goes well beyond transactional shopping. Vans.com is truly a brand experience, where content is equally as important to the strategy as commerce. And shortly, you'll hear Katie Bongiovanni go into more detail on how she and the team are bringing that to life. Across both, we remain focused on elevating and driving a consistent Vans consumer experience around the world. Bands direct to consumer business is a strategic enabler for both growth and profitability around the world. As a key touch point for consumers, it drives brand awareness. We leverage both our physical stores and digital platforms to ensure we meaningfully connect with consumers as we enter into new markets and new product categories. Our direct to consumers channels drive more than just awareness, but true brand affinity. We showcase our breadth of products in an immersive and impactful way to create emotional connections. It's more than just providing consumers access to product that they might not otherwise have, but ensuring we tell meaningful stories that drive connection to the brand. By creating affinity, we can then drive aspiration by inspiring consumers with memorable experiences, which can be as simple as an impactful interaction with one of our associates, guiding a consumer through their first purchase at Vans to participating in an immersive customization workshop. This focus on the consumer experience in turn drives sales, productivity and profitability. Direct to consumer represents more than 50% of our global revenue and will account for 2 thirds of Vans overall growth going forward. Now it will come to no surprise to anyone in this room that the retail environment has been pretty challenging over the past several years. We continued to hear about the retail apocalypse as store closures outpace openings. And zombie malls appeared where once thriving shopping centers lived. All of this against the backdrop of the ever changing consumer expectations as they increasingly turned to digital channels and demand more experiential and meaningful moments in physical stores. Yet Vans brick and mortar business continues to grow consistently and powerfully. In fact, this will be our 15th consecutive year of comp store increases in North America. And by the end of this year, we will have achieved double digit growth in 51 out of the past 52 quarters. Now these are historic results that we're very proud of and we expect to continue. Our success has been driven by remaining true to our heritage while adeptly evolving our stores to always meet our consumers' needs. We remain focused on leveraging the powerful combination of engaging associates, impactful storytelling and great product to connect with our consumers. Operationally, we're constantly tracking and improving both traffic and conversion metrics globally. And this has manifested itself in initiatives like out of stock programs, engagement strategies and lease line messaging prioritization. And now we're setting ourselves up for the next generation by developing new store formats, implementing consumer focused technology and exploring new opportunities with a test and learn mindset. Now to understand historical success and strong foundation for future growth, it's important to start with our heritage. Bands started in 1966 as a direct to consumer company. Our founder, Paul Van Doren's original idea was to make shoes in his own factories and sell them in his own stores, which was pretty revolutionary at the time. Vans' first store opened in Anaheim, California in 1966 and this year our business in owned stores is on track to grow to nearly $1,500,000,000 Today, we extend that heritage as a global retailer globally to more than 2,000 owned concession and partner retail doors around the world. We continue to elevate our focus on global consistency and direct to consumer by increasing strategic alignment and leveraging experience across regions. Our focus on having them all pull in the same direction is a distinct strategic advantage for Vans. We're able to drive consistency by driving connectivity and communication internally. We prioritize regional leadership rotation so that high potential D2C leaders can leverage and engage with their peers directly and have the benefit of new experiences firsthand. Also regular cross region leadership summits ensure local subject matter experts hear new ideas and align on best practices. The retail world moves fast as you know and by having a unified global vision, we're able to better adapt, identify opportunities and meet consumers' needs in stores whether it's in Malaysia, Milan or Michigan. Now internal leadership is only a small part of the story. In Vans physical stores, our goal of elevating the consumer experience starts with the people there. Our founder, Paul Van Doren once said, we're not a shoe company, we're a people company that makes shoes and that quote still rings true today. Our associate team is our key point of differentiation. They are our brand ambassadors engaging consumers directly every day. Making sure they have a great experience from the moment they join the family is just as important to us as the experience of our consumer. Our associates comprise Van's front lines in driving consumer connectivity, so putting focus, energy and resources here yields significant ROI, not only in terms of traditional KPIs, but the long term value of brand affinity. We're very focused on associate training, development and succession planning and this focus produces meaningful results and improving tenure. Last year, we saw a reduction in turnover at every store level position in North America. And this is not just us talking to ourselves. Consumer insights work tells us that when consumers are engaged by associates, they're 5 times more likely to convert than those that are not. This has been and will continue to be a strategic priority and really the most important element of making our stores experiential. As we make our consumer experience more consistent globally, we have an opportunity to raise conversion. As we have in North America, where it's twice that of any other region. This is an important opportunity and represents meaningful incremental growth in our business. Now we do not just have great people in the stores, but also great product, which we support through powerful storytelling. With direct control of our story and how it's being told, we leverage a competitive advantage to drive Vans strategic priorities. Vans consumer insight study once showed us that our store messaging was unclear and relatively ineffective. And this led to strategic and creative changes as well as increased investments, which have resulted in driving traffic and conversion improvements each of the past 4 years. Moreover, it's helped enable recent product launches like the Ultra range and the Versa hoodie that you heard Dave and Vicki speak to earlier with impactful storytelling from the lease line to the stores back wall, we're able to inspire and compel consumers at an elevated level. Now the evolution of our business is fueled by a test and learn mentality that's prevalent across the organization with a focus on improving the consumer experience as well as productivity. This mentality is particularly exhibited by the retail labs where which we utilize in each region where we test and measure the results of our experiments. To improve productivity, we track navigation patterns, which you can see an example here in this activity heat map, as well as dwell time and traditional KPIs like conversion, all of which help inform our point of view on the experience and customer satisfaction. One of the key foundations of our work currently is the premise that every store has elements and conditions that affect behavior both consciously and unconsciously. We're currently working with our internal team of neuroscientists that are based at University of California here in Irvine to test the influences of things like sight, sound and even aroma. To better focus consumers' attention, we're experimenting with different lighting techniques in the windows and displays to improve the consumer experience. We've seen remarkable results by altering music tempo and even sound quality. This experimental mindset allows us to qualitatively validate hypothesis, so we can rapidly scale tactics that improve the consumer experience. Now, in addition to experimentation, Vance has a multiple technology platforms in various stages of execution that are foundational to improving the consumer experience and supporting growth and productivity. Of course, we are pursuing the traditional omni channel capabilities that enable seamless shopping across channels, but we're also piloting technology platforms that improve both the consumer and associate experience. For instance, an artificial intelligence enabled hiring platform that supports field leadership to help identify the next Van Doren's to join our sales team. And a proprietary stockroom management system that's as much a consumer engagement tool as it is an enabler of accuracy and efficiency for inventory. And while we're clearly focused on adeptly managing the progression of our in store experience, we also have been evolving our approach to store formats globally. Elevated retail is our latest store expansion strategy, which uses new store formats, each with unique purposes to reach different consumers. Our full price mall and outlet formats that solely drove growth and productivity for nearly a decade no longer reach the full breadth and diversity of consumer the brand has today. Our 2 original formats are obviously still very important and will continue to represent a majority of Vans brick and mortar business going forward. However, to reach consumers in off mall trade areas, high traffic, high tourism areas or submarkets with very aspirational consumers, we developed the new elevated street, brand showcase and boutique formats. Learnings over the past few years in our street locations have led to the development of the strategy, which is more than just individual formats, but it's a retail network that works in unison holistically to extend brand reach. The boutique, which is our most aspirational physical environment is differentiated with curated assortments of our most elevated products, like our vault collection, which historically has only been sold in the most aspirational wholesale boutiques around the world. We also locate these boutiques only in areas where we think this influential consumer is prevalent. Last year, we opened a boutique in the Williamsburg neighborhood of Brooklyn to cater to its large EC community and we brought to life the most aspirational and experiential Vans store in the world to date. Our elevated retail strategy is not about flooding the market with new store formats. It's about meeting consumers in the right place in the right way. Our brand showcase is our ultimate brand experience in terms of size and scale and has a primary purpose of driving brand awareness in high traffic locations in Tier 1 cities. We think of the showcase a little bit differently than our competitors think of their flagships because both commercial success and profitability are requirements as they should be. Last year reopened a showcase on 34th Street in Manhattan, and it has the broadest assortment of products of any store and is on track to have nearly 3 quarters of a 1000000 people visit it this year. The second in Manhattan will open on Fifth Avenue in October. These new formats are not just physical designs, but also include new thinking in terms of leadership, staffing, assortment planning and storytelling to truly differentiate them from our typical mall store. Elevated retail is being piloted in North America, but will scale into key cities around the world beginning in 2019. Now in addition to evolving our expansion strategy, we're also improving the experience in our existing mall stores. This year we're piloting the next iteration of our full price store design, which we call 3.0. 3.0 is our store design and consumer experience of the future, which was informed by consumer insights and lab testing results. The new design has a more elevated look and feel with more tables and fewer floor fixtures to improve navigation throughout the space. Our product will be better showcased with multi level lighting and we'll be able to provide a more immersive storytelling and a more engaging experience with impactful digital elements. This year we're validating the performance and productivity of the new design in preparation for scaling in new stores and remodels around the world next year. Our strategic direction and focus on the consumer will power our continued performance in physical stores around the world. We're confident our strategy provides the foundation for continued growth ahead. Specifically, by continuing to develop our store associate team and focusing on consumer engagement by activating elevated retail, our multiple store format strategy in key cities and by driving global consistency and best practices around the world. We set our sights on our next major milestone to reach $2,000,000,000 globally and we're very confident in the long term growth of 8% to 10% per year. And now I'd like to introduce Katie Bongiovanni, who oversees e commerce and our omni channel strategy. Thank you, David. Good morning, everyone. So David just talked to you about the idea of vans.com having a dual responsibility to both commercial and brand goals. And I'm going to spend some time talking about that with you this morning. I'm also going to highlight our global e commerce strategic direction for you and talk about how that's expanding next generation direct to consumer in order to drive growth and then even more importantly to drive the best brand experience for our consumer. You've already heard about not just one thing a few times this morning. And now I'm going to extend that to vans.com. Vans.com is not just one thing. We're not just a sales channel. We're not just a digital platform. We're a brand experience. And that's really important. That's foundational to the way we think. Vans.com is not just a sales channel or a digital platform, it's a brand experience. Our focus has always been on the consumer experience and that remains our mindset. The classics page that you see up here is so much more than a typical product listing page. Product lives alongside Van's family members and the stories about how they express their creativity. In their stories, it's they do they tell them there it's a key element of vans.com. The online journey is so much more than a traditional e commerce transactional path. As strong as our growth has been, our visitors don't come to the site to make a purchase every time. They're on vans.com as part of a journey that might include owned direct to consumer, wholesale brick and mortar, e com or information and content about our athletes and events. To be sure, we are committed to our commercial responsibilities, but we also acknowledge the role that we play in achieving the broader Vans goals worldwide. So earlier today, Dave talked to you about the importance of progression footwear, with the Ultra range being a great example of the power of our approach. Vans.com is a platform to enable rich storytelling about the products like the Ultra range, as you see up here on the screen. We blend content and commerce, bringing product to life online. In this example, we use photography to tell a story about the products and the consumers who use them. The goal was to showcase Vans diverse consumers globally and to let them tell their own get their story. We turned over the cameras to some fans influencers and had them tell the story of the Ultra range through their own individual lens. Each was given a different silhouette that match back to their lifestyle and their personality. And you see 2 of them here on the screen. So does this approach work? We know that when we prioritize engagement and storytelling, the results follow. More visitors remained on the site after visiting our ultra range page, with bounce rates decreasing by half from the page average, which reflects an increase in engagement. Site searches for the Ultra range doubled, reflecting an increase in product awareness and interest. This ultra range example demonstrates how we leverage both content and commerce throughout through brand storytelling. Another element of storytelling comes to life through creating personalized experiences, grounded in our consumer interaction. Vans consumers expect relevant content and experiences. As you heard earlier, we're developing an ecosystem of consumer data and insights via our consumer lifecycle management tool, our loyalty program and then also through on-site behavior. Personalization begins with understanding how consumers are engaging with our product and our content, allowing us to get to know them with each interaction. As the consumers engage with vans.com, we're able to provide stories, content and product for each of them. We're continuing to test and learn our personalization journey, both on and off-site. And the images that you see here on the screen are just a few examples. Hundreds of data points are leveraged behind the scenes in order to determine which content in each of these examples is best for each consumer. In each case, our personalized experiences have led to a lift in engagement over that non personalized control, and it regularly results in mid double digit improvements in engagement. So as we gather more data, CLM will be the next generation, it will enable the next generation of personalization, bringing us even closer to those one to one experiences online. You see digital is the next generation of building relationships with our consumers. And personalization is our opportunity to take this further than we ever have before. Our experiences to date have shown us impressive results. But we're just scratching the surface of what will ultimately achieve. This is fun here. For the 2018 back to school period, we launched an outfit generator on both mobile and desktop. And you see it on screen, it combined curated head to toe assortments and gamification. It was an engaging way of providing exposure to a wider product assortment. And in this case, intentionally focusing on apparel. The example shows how we can deliver an impactful brand experience that drives engagement and conversion, while also supporting the apparel initiatives you just heard Vicki cover. And initial results from our consumers are really exciting. We saw a direct correlation between engagement and satisfaction for those consumers who use the Outfit Generator, with the most engaged consumers having satisfaction levels exceeding 90%. And this is just one example of a best in class experience that we will build on from season to season and around the world. Customs, Vans is focused on enabling creative expression like you've heard and I think of no I can think of no greater example of how we can bring this to life online than through our customs platform. We've been offering customs since the beginning. And our current online offering is truly a quantum leap forward. I'm sure many of you have visited our customs platform after last year's presentation. And if so, I encourage you to come back and check it again and again because it's continuously evolving. The global platform invites our consumers to express their creativity using our product as their canvas. Let's start, let's take a look at a video of what customs has meant to some friends of Vans. You just take a picture of whatever you want to put on the shoe, and then you get them in the mail. Super easy. I like the idea of taking a little piece of art wherever you go. I'm Lizzie Armanto and I am a skateboarder. For my shoe, I did the Skate Hi Pro. I like the perforated leather, add to cart. And there they are. If you make a custom pair of shoes and you do it right, there's no one in the other world that's going to have that same shoe. I've been wearing Vans since like high school. I've always gone on everything that I've had. So it was like the 1st customization we would do. You can take your own custom artwork and put it on a slip on or an authentic, I did both. Through the Internet, you get your shoe to your home. I love that line and taking a little piece of art wherever you go. It's really a great story there. So all of these videos that you that I just showed and if you had a chance to look at the displays in our store during the break. There are examples of how customs are a dynamic platform for enabling creativity. They demonstrate how we offer best in class creative experiences for anyone. As you just saw with our athletes like Lizzie Armanto or with Vans family artists like Jay Howell and Kinda Khalidi. We believe that Vans customs is a vital differentiator for our brand and it drives brand love and reinforces our purpose. So this summer, we partnered with 18 social content creators displaying a variety of user generated content reflective of who they are, they do. These creators are Vans fans from all different kinds of backgrounds specializing in artistic mediums such as design, illustration, landscape photography, and even poetry. Up here on the screen are just a few examples of how these creators display their art on our shoes. Customs UGC uploads are a powerful example of consumer engagement with the brand and the engagement is incredible. Every day we are inspired by the UGC designs our consumers create. Customs UGC provides an example of how we bring the customer voice to life. It's an incredible opportunity and platform that allows our consumers to express their creativity, as you see here. On the screen is just a very small sample of the art our consumers have uploaded onto the platform this summer. And the results are in, we know our consumers love customs and UGC. We've had millions of images uploaded over the past year. And as I said earlier, our product is their canvas. While the examples I just shared were from our U. S. Based site, the strategies and execution behind them come to life globally. This is an increasingly global business, where Vans Online consumers access the same e commerce platform in Europe and North America, and that same platform is powering the customs experience in both regions and parts of Asia. E commerce teams at Vans partner on our global strategies, our future capabilities and experiences, including leveraging e commerce as a strategic enabler for the brand. Ongoing conversations can include technology, content, product and the ever changing consumer insights and expectations. Vans ecom leaders around the world prioritize communication on behalf of our Vans consumers. So I opened by saying that vans.com is not just a sales channel or a digital platform. It's a brand experience. Our focus has always been on the consumer experience and that remains our mindset. I'll leave you with these three points to reinforce how our clear strategic direction will power our future growth. 1st, enabling creativity through vans.com with a best in class experience, blending both content and commerce throughout the consumer journey. 2nd, leveraging the Vans customs experience as a vital differentiator and a powerful driver of brand love. And finally, applying the strategy of global consistency, local relevancy as we share learnings around the world. Our strategic approach has been the foundation for our strong growth. We are confident that these strategies will continue to power our growth into 2023, when we will be a $1,000,000,000 global digital business, representing more than 20% of the total Vans business. These are incredible milestones for our brand, dollars 1,000,000,000 globally, representing more than 20% of the total Vans business. It's now my pleasure to introduce our next speaker, the Americas General Manager, Mitch Whitaker. Thank you. Thank you, Katie. Nice choice of jacket today. So earlier today, you heard numerous times, the power of being globally consistent and locally relevant. To give you some background to myself, prior to my current role, I spent the last 10 years living and working in Hong Kong as the GM of Vans Asia Pacific. In fact, I recognize many of you from the Shanghai Investor Day that we had. I was responsible at that time for taking our brand to places where it had never lived before, including India and China, growing the business from a then $25,000,000 to ending a $300,000,000 business. Scott's grown it a lot since then. We did this by being taking our globally consistent brand and showing up in Asia in a very locally relevant way in our approach to our activations and events, our products and our distribution. Just to give you a few examples, the artists and bands we use at our events or the food that we served or the apparel that was slightly localized design and fit to meet that consumer need. Even the stores, I think at the time they are about a third the size of our average store in the U. S. Those are differences that we faced during that time. But you know what, that didn't matter. Our goal at that time was that everyone who came encounter with a brand would say, sick, this is Vans, this is home. That was the goal and that's what really mean globally consistent and locally relevant means to me. Today, I get to face a similar challenge and opportunity as the GM of the Americas region. Although the scale of the business is different and the consumer is much more mature, it's going to be the same formula, globally consistent and locally relevant. Vans is in a unique position in the Americas market and in the mind of the consumer. First of all, it's important to note that we are 52 years old in the U. S, the home and heritage of our brand. In California, our own backyard is the epicenter and origin of action sports. This is home. This is where it all started right here. This means our story resonates with a very informed consumer. We also have a healthy and balanced distribution from our core independent accounts to our large national partners who coexist in a very powerful way. While we may show up at 10 different stores in the mall, we are featured in all the most legitimate core action sports and skate shops, as well as the most elevated boutiques. We're able to do this through a really rigorous and disciplined focus on channel distribution and product segmentation, prioritizing the consumer experience over ubiquity. And lastly, coupled by the strength of our own DTC channels, comprised of 500 plus retail stores and a thriving e comm and customs platform, we're able to manage our distribution and storytelling as a direct expression of our brand and a place where our consumer can get to know us and really what we stand for. These elements combined to really differentiate us from our competitive set. Different from our other regions, we have 5 decades of history in the Americas, high brand awareness and a very mature engaged consumer. Our focus is on localizing our efforts to both convert newcomers to the brand, while being laser focused on seeing relevant to our loyalists who are the lifeline and blood of our brand. We will do this by our approach to brand activation, leveraging the size, scale and maturity of our marketplace. By using product to drive energy and staying relevant to that core consumer and by leveraging our biggest differentiator, our robust retail footprint as a point of strength, really important to note. With high brand awareness and a $2,000,000,000 business in the Americas, we were able to execute large powerful broad reaching activations, which allows us to connect to 100 of 1000, even millions of consumers and to allow them to create their own Vans moment, their own Vans story and emotional connection to the brand. The Vans U. S. Open of Surfing, which we hosted just 2 months ago in our backyard here in Huntington Beach, California is a prime example of this. This year was home of the World Surfly Championship event, Evanes Park Series Championship Skate event, Evanes BMX Pro Cup Championship event, a full service retail store that we built on the sand, on the beach and a Van Dorn village, a space where our guests can participate in creative activities such as product customization, learn to play music workshops, they can pick up a guitar or get on the drums and play some music and learn to shape surfboard workshops. It's an amazing event and celebration of all it makes Vans off the wall. Through that event alone, we're able to connect in a really special and meaningful way to nearly half a 1000000 people. In addition, through our earned and owned online platforms, we amplify these messages and stories to more than 750,000,000 impressions globally. That's some pretty significant scale. While we are massively proud of our Vans U. S. Open of Surf, we are just as proud as our more intimate events such as Vans Custom Culture, currently in its 10th year, which we designed in North America to service and support struggling art programs across schools, high schools in the U. S. Each year we partner with nearly 3,000 schools to challenge their students to design their own Vans custom shoes. We not only challenge our students to design the shoes and be creative and think differently, but we give back. Over the years, we've raised and donated over $1,000,000 for school art programs. Picture to here is an example. We showed up this year to the winning school, Hixson High School in Tennessee, handed over a $75,000 check through us party in typical Steve Van Doren style to heroes. It was truly a life changing moment for these artists to come alive and I can tell you they're going to remember this for the rest of their lives. These events are great examples of how we're able to both reward our loyalists and meaningfully engage 100 of thousands of newcomers to the brand. As we continue to scale our business, it's mission critical that we stay connected to our core consumers. Each year, we execute several regionally specific product collaborations in our most aspirational channels. With the maturity of the EC consumer in the Americas, we can connect to our local communities through product in a very meaningful way. One important trend we noticed and actually designed into is the growing prominence of chefs as a part of creative culture. Many chefs in fact have a strong and authentic connection to skate and street culture, many of them being skaters growing up. Picture this one of our recent made for the makers collaborations with chef Chris Constantino from the Coxcomb restaurant in San Francisco. I'm not sure if you've been there, it's an amazing place. Chris is a chef, author, skater, a philanthropist and part of our core community. Together with Chris, we created a limited run of shoes and apparel targeting the San Francisco chef skater creative community and through a special event at FTC, an iconic skate shop in San Francisco. Although these events are small in scale, they are huge and large in impact as we need to stay credible with our core community. Vans started in business as a retailer and that remains an important part of who we are. As you heard from David Theis, Head of D2C, we recently launched our elevated retail pilot in New York City, designed to be the pinnacle and basically the proving ground for how we can bring more enhanced consumer experience to life. These stores are providing tangible learnings about our consumer and how to how we interact with them. Think the biggest call out we've learned thus far is their sense of community. We've learned that our stores can't just be stores anymore. Our consumers are looking for experience. They're looking for connection. To that end, we're developing new capabilities and resources such as a retail programming director, community manager, community engagement managers to help us create and host local events, tell stories, connect to local communities and ultimately create experiences in a much more robust and elevated way. As we learn and develop these holistic capabilities, we will scale these to new regions and new cities across the Americas and I'm sure globally. So although we are currently experiencing record breaking growth, I had a few conversations with you outside during the break, we are confident there is significant runway ahead. In the U. S, although our new stores are regularly exceeding productivity expectations, we are focused on smart retail door expansion as we diversify our portfolio with elevated formats, really focusing on consumer experience. In newer Americas markets, however, we're just getting started. Less than 80 of the 500 plus retail stores that we have sit outside the U. S, that's less than 80. We're bullish on retail expansion, particularly Mexico, Chile and Brazil. While these markets are healthy and growing markets, they remain very small for our business right now. We estimate that the largest competitor in those markets are approximately at times 30 approximately 30 times more business than us in some of these markets. There's tremendous growth ahead for their ahead of us in that regard. Katie just walked you through our strategic direction and the exciting new generation of DTC and digital. We're still in very early stages of personalization, customs excuse me, consumer lifecycle management and the recent launch of the Vans loyalty program. However, I think the main point here is we are building capabilities to allow us to get to our consumer in a way that we've never done before and we have to fuel this momentum and opportunity we have with our digitally connected consumer. We have significant white space in our wholesale distribution. Rigorous work goes into product and channel segmentation, ensuring our partners both big and small have the right product, the right marketing to show up for the right consumer. This work has allowed us to gain shelf space in existing accounts. In addition, the athletic specialty channel represents a great opportunity for us. Even though we've almost doubled our door count in this channel over this last year, we currently represent less than 1 20th of our competitors, largest competitor in this channel. We look forward to closing that gap. Once again, there is significant runway ahead. Inclusion, and I hope you got a sense of this from me, we're extremely confident that the strategic choices we're making in the Americas will continue to drive performance and long term brand health, targeting and delivering a 10% to 12% 5 year CAGR, getting us to $3,000,000,000 by 'twenty three. And to steal a phrase from Doug today, 3 by 'twenty three sounds pretty nice for the Americas. Once again, we will do this by a relentless focus on, 1st, creating deep consumer connections that allows our consumers to have their Vans moment, their Vans story and emotional connection to the brand through their large scale and our intimate activations. 2nd, by continuing to speak to our core consumers and local communities as we expand beyond our concentric circle of the target EC consumer. We will not walk away from our brand loyalists and that's what will keep us intact. And 3rd, by delivering by leveraging our dynamic distribution model led by a very robust D2C business inclusive of retail, ecom, customs, all those amazing things we just heard as both a revenue driver and strategic enabler as we continue to engage and connect with our consumer in a more elevated and experiential way. Thank you. And now I will introduce you to Jan Van Loon to speak to you about the Vans EMEA region. Thank you, Mitch. Good morning, everyone. So I'm here to give you an update on our Vans EMEA performance. And as you may have seen, Vans EMEA has seen significant growth over the last 12 months. In fact, we've seen consecutive 7th consecutive quarters over the last couple of months. Last year in Boston, we talked about our turnaround strategy for EMEA, and I'm really happy to report that our strategies and initiatives are working. The EMEA Sporting Goods and Lifestyle market has faced some cross border selling and ongoing consolidation, same as what we've seen here in the Americas. And the sector remains super competitive. I'm pleased to say that our strong execution of our plans that we're realizing market share growth through our key partners. We've seen significant business growth in our bricks and mortar doors and particularly through our e commerce platform, up more than 70% last year. Over the last 18 months, we've taken a reenergized approach to integrated marketplace management in order to place the right product at the right accounts, targeting the right consumer at the right time. So this is a very surgical approach planning process, which elevates our brand experiences in a crowded marketplace. We've made considered choices on who to partner with, resulting in smaller but stronger customer base. And we ended up with 20% less wholesale customers focused on the account that matters and we increased the average value order value with 33%. So this is one of our most impactful strategies for a region, building quality distribution and driving growth. In EMEA, we have identified an opportunity to connect with the female consumer more impactfully. We recently launched a collaboration with the London based cult women's fashion label Lazy Oaf, which we consider to be perfectly aligned to the Vans brand, and this introduces Vans to a new set of female consumers. Our female focus is working. We are growing our women's business at a faster rate than our men's business as a result of this. In Vansy EMEA, we continue to build unique consumer experiences in skateboarding, where authenticity and commitment to the core remains fundamental to our positioning and success. This year is the 10th anniversary of our ShopRite initiative. A competition among regional independent skateboarding stores. And this underlines the Vans EMEA commitment to core skateboarding and the broader skate community that creates a halo effect to other consumers. Rooted in skateboarding, our focus and commitment to the culture really sets us apart to the athletic competition out there. Van's strategic account base in EMEA has delivered a 2 year CAGR of over 35%, so a key contributor to the region's 19% CAGR over total business over the past 2 years, led in part by Penn European accounts across the region, with whom continuous effort is made to assortment planning and business planning. We design and develop reasonably relevant products. So this creation process, led by market research and account analytics, accelerates the creation process and allows us to respond faster to consumer needs. This result in account specific capsules that have seen increased sell through. The House of Vans in London is one of the best examples of a true brand beacon. Now in its 4th year and continuing to attract new people to the venue through the lens of music, skate, art and street culture. The venue facilitates strong fan experiences and a broader amplification via media and PR channels. Our house of vans in London fan base grew significantly on social media. We had a 32% growth in the last 12 months. The European marketplace has inherent complexities that we are constantly managing, ensuring that we're able to meet consumer needs across more than 40 unique countries, Each with their own unique cultures and language requires a coordinated and detailed approach. A kit in Paris is inspired by different influencers or a different way of expressing themselves compared to a kid in London or in Berlin. Our approach is to first use global platforms like the house events or custom culture and then to tailor the experiences in the needs of our consumers in an integrated way. This tailored approach then spans everything from localizing language to social experiences to product collaborations and retailer activations. This allows us to connect with more consumers than ever. Also this approach, I would like to highlight, is one of the key achievements of our success. In Europe, we drive Vans Pinnacle expression through our vans. Eu site. At the same time, drive quality commerce with through our digital titan partnerships. These two channels as complementary to one another and delivering added value for the consumer and the brand. Among our 3 digital titans partners and our own.com, we are creating clear destination for consumers shopping the digital marketplace. Our brands, marketplace and account strategies are working. They are a collective foundation of our Vans EMEA success. In some of our key markets, we're taking our rightful place as the distinct number 3 player in terms of overall market share. While we have attained that goal in certain countries, for example, in the U. K, there remains significant upside. Even in countries where we rank farther down among the top 10 brands, such as Italy and France, we are gaining market share and the market itself grows, which gives us additional confidence. The digital marketplace for clothing and footwear in Europe is both large and continuing to grow at a low double digit rate over the next 3 years. We are set up to continue winning online with our digital titans as well as our owned.com. Last but not least, we plan to further expand our retail footprint across the EMEA. EMEA revenue is mainly driven by wholesale, delivering approximately 70% of total revenue. While in the Americas, as Mitch mentioned, this is approximately 60% of revenue. So more than double compared to our region. We connect with consumers through stores and branded spaces in over 2 50 points of distribution. Americas doubles this. So it's our aim to accelerate our retail footprint and gain more share in overall business mix, while keeping wholesale growth strong. In summary, the current EMEA business is very healthy, driven by unique brand positioning that resonates with our consumer across a highly diverse region. The result of executing global strategy augmented with several regional specific strategies we have detailed. We delivered healthy results through the last years with a 6% CAGR currency neutral from calendar year 'thirteen to calendar year 'sixteen, including a projected accelerated growth of 19% CAGR from fiscal 'seventeen to fiscal 'nineteen. And we believe we have all the tools in place to remain healthy for the foreseeable future and deliver a 5 year CAGR until 2023 ranging between 8% 10%. With that, I have the pleasure to introduce our GM of APAC, Scott Basham. Thanks, Jan. Good morning, everyone. As Jan mentioned, I'm the General Manager of Vans in Asia Pacific or APAC as we usually call it internally. I've worked for Vans now in 5 countries across 3 different regions. But when I moved to Hong Kong for this new role, I was blown away by the speed of change that's transforming the Asia Pacific marketplace and at the same time providing enormous opportunities for Vans to grow. APAC is Vans' youngest region. Since launching direct subsidiary operations there in about 2,008 with Mitch at the helm, Vans APAC has grown to become an almost $400,000,000 region. And the brand has vaulted from being what really was essentially a niche player to serious challenger to those big sports and lifestyle brands with which we compete globally. We've done this not by watering our brand message down for new markets, but by sharpening our points of difference that you've heard about and by emphasizing authentic consumer connections. Now while our competitors pay 1,000,000 of dollars for the rights to glorify distant superstars and elite athletes, we're focused on promoting creative youth culture in ways that are accessible and locally nuanced in Asia. As you've heard, Vans has a clear consumer target, the expressive creator. And the expressive creator exists in the same way in Beijing as he or she does in Berlin or Brooklyn. But since we're a newer entrant into much of the market, we're just starting to get to reach these consumers. By committing to our cultural pillars, starting with skateboarding, we stand out in a sea of interchangeable sport and the expressive creators of Asia have gravitated events as a result. Finally, every brand that operates in Asia today seeks to grab the attention of Asia's tech savvy and hyper connected consumers and Vans is no exception. The difference is most brands in this marketplace deliver phony messaging from high priced digital celebrities. We advance create and share participatory user generated digital content and relatable influencers. And Asian consumers are rewarding us with our for our authenticity and our sincerity with increasing loyalty. Though our global consumer target is consistent as is our strategic framework, we bring the brand to market in APAC in ways that are locally relevant. Any of you who track retail in Asia know that mono brand banners predominate in the region, especially in China. With over 52 years of retail experience, Vans is uniquely prepared to thrive in this kind of environment. Today in our more than 1200 Vans owned concession and partner stores, we offer elevated experiences that are driven by a direct to consumer mindset. In our owned and operated stores and concessions, we tailor our industry leading best practices for smaller average store footprints and Asian consumer needs. We set the standard for our regional DTC practice in these stores, and they've driven revenue expansion of about $100,000,000 from 2012 to 2017. We've applied that same DTC mindset to what we do in the wholesale marketplace as well. These are the stores that are run by Asian leading retail partners and they constitute the majority of the Vans stores you'd find in Asia today. We've differentiated Vans by focusing on store productivity and unique consumer experiences rather than on massive door count proliferation. Finally, in the digital marketplaces of partners like Tmall, we offer mono brand flagship e commerce experiences that are more carefully curated and engaging than what is possible under traditional wholesale model. And we do so on the massive scale that the Alibaba ecosystem and access to its more than 600,000,000 users provides to us. To meet local needs in Asia, we bring product assortments to market that are nuanced while still tightly aligned with Vans' global category goals. Alongside our global primary stories, we offer Asia specific sizing and product collaborations with Asian designers and influencers. And we deliver Asia specific head to toe assortments like this season's retro check collection for the largely mono brand retail environments in which we operate in Asia, where we aren't bound by what a retailer thinks Vans should or shouldn't sell. In doing so, we meet local fashion needs while delivering complete brand stories to the millions of Asian consumers who are coming in contact with us for the very first time. The challenge APAC initially presented to Vans was how to engage with more consumers in a marketplace where the active participation in our cultural pillars is growing, but it's still really small. The answer we realize over time is to dial up the accessibility of those cultural pillars to promote self expression through platforms that inspire and engage. As an example, for the 4th year, we're bringing our global art platform, Custom Culture, which you've heard about today, to life in ways that are unique to Asia. Born as a program for underserved schools in the U. S, as you've heard, it's expanded in Asia to be accessible to all those who have a smartphone and who are interested in sharing their passion for art using Van Shoe as their canvas. By emphasizing the engagement of offline workshops, which are inspired and digitally and social media enabled online voting for our favorite submissions, we've made this rich user generated content highly shareable. This year, custom culture will reach 11 countries in Asia with more than 50 offline activations. This powerful platform is truly inspiring creativity and has generated nearly 2,500,000 digital impressions this year to date. To young people in Asia, creative self expression is surging in importance. And Vans is helping provide platforms to enable it while building strong ties to the brand at the same time. The same can be said for the access we provide to our original cultural pillar to skateboarding. Our leadership in skateboarding demonstrates commitment to creative expression in a way that's authentic to Vance, in a way that can't be copied by any competitors. And consumers reward us for this. No differently in APAC today than they have in California since Steve Van Dorn first started sponsoring the original pro skaters in the early 1970s. As in everything we do in Asia, we lead in skateboarding in a way that is globally consistent, but relevant in Asian context. In much of Asia, where skateboarding is still nascent, it starts with our commitment to building skateboarding communities and culture from the grassroots. In 11 countries this year, we'll build strong tie connections with tens of thousands of skateboarders from newbies to gritty pros and more than 100 grassroots activations across the region like our girls skate clinics and our decade long commitment to go skate day. At the point of sale, our commitment to skate leadership has delivered an athlete inspired head to toe assortments and impactful visual storytelling, whether that's in Avance Monobrand store or on the floors of an important and influential skate partner like Fast Times in Australia or FLY in Shanghai. And we amplify the reach and engagement of our skate efforts by leveraging our strong partnerships with China's digital titans. In October of this year, we're proud to bring the excitement of the Vans Pro Skate Park series back to Shanghai for a 2nd year in a row for the global championships. And we plan to garner over 2,000,000 live views and 180,000,000 digital impressions by leveraging the reach of the Tencent Sports platform, our continuing partner. This is the power of the digital partnerships that we've created in Asia. They provide us with massive reach and engagement and they provide our partners and their users totally unique innovative content in a way that's authentic to Vans. Of course, our digital partnerships aren't just limited to marketing activations. The future of commerce will be digital, but in much of Asia that future is already here. Online Asian consumers engage with brands, shop, bank, connect with friends and do everything that is possible offline. And they do it all with the speed and intensity not found in anywhere else in the world, especially in China. Vans APAC is well positioned to succeed found in anywhere else in the world, especially in China. Vans APAC is well positioned to succeed in this digitally accelerated region. E commerce today represents about 20% of our business already and growing explosively. By 2022, e commerce will become the single biggest channel of sales for vans in China as we build relationships with consumers that are enabled by rich digital ecosystems. We tailor our digital offering not just for the sophistication of the consumer who shops on these various sites, but we actually leverage each of these sites unique strengths of the digital titans and their powerful platforms to do much more than just drive transaction. As an example, on Tmall, we're promoting creative youth culture in China rather than merely focusing on maximizing sales as a lot of our bigger competitors do. Through innovative co creative campaigns, we're at the forefront consumer engagement innovation within the Alibaba ecosystem. As a result, we've attracted nearly 8,000,000 Tmall followers to date and we punch in the online heavyweight division despite our still middleweight total business scale. And we don't just enable creativity for Tmall's consumers. Last month, we had the pleasure of hosting a House of Vans activation on Alibaba's campus in Hangzhou, China. We invited their 30,000 young creative employees, many of them expressive creators to get to know our brand intimately for the first time through skate, do it yourself, art activations and music. And at the same time delivered more than 5,000,000 live views of the event on the Alibaba ecosystem. Another powerful partnership with Tencent, the owner of WeChat has allowed us to connect with consumers on an incredible scale. As many of you probably know, with more than 1,000,000,000 monthly active users in the Tencent ecosystem, we are able to leverage this incredibly powerful social environment to engage incredibly influenced consumer preference for Vans. We engage in a dynamic digital conversation with over a half 1000000 WeChat followers and growing. And we connect offline to online activations via Tencent platforms, As we did at the Park Series Championship last year in Shanghai, or as we did at the House of Ants takeover, we live stream from London to 1,000,000 in China only a few months ago. Tencent is helping us drive purchase too, both through our growing business on jingdong.com, which with which Tencent has a growing interest and via WeChat, an effective pathway to deliver consumers to our own e commerce platform. Finally, as the pinnacle touch point in Vans' digital ecosystem, our vans.com platform plays a very specific role to deliver the most compelling and unique Vans experiences online, like the Vans custom platform we just launched recently in parts of Asia. We've not designed our vans.com platforms in Asia to bring the massive user base of our marketplace partners, but rather to provide a deeper view into the Vans world than what's possible anywhere else online. With this type of positioning, our own.com platform and business has grown at tremendous rate since we launched last year in both China and Korea. Now we are confident that we have a long road ahead for growth in Asia Pacific. And especially given our sustained high growth rate over the last few years, when we compare ourselves to the bigger athletic brands in the space. Store count is a good starting place to look at some of the white space potential there is. In China today, we operate about 600 owned and concession and partner stores across China, whereas our biggest athletics brand competitors operate 13 times or more as many. Now we've chosen to focus on experiences and great locations rather on ubiquity, but we clearly have an opportunity. We look at brand awareness, as you've already heard from David Gold earlier on, we find that despite our rapid revenue growth, we still only register with about 50% of consumers in China's biggest cities. Imagine what lies ahead as we start to unlock and grow awareness towards the 90% plus levels of our bigger competitors in China. Meanwhile, on China's leading online search platforms like Baidu and Taobao, fan search interest ranking is already highly competitive with those biggest brands. This fact take sustained high growth trajectory and the white space I've spoken to you about gives you plenty of reason to believe that Vans has a lot of growth potential ahead of it in Asia Pacific. Now our path to capture that potential in APAC is clear. We'll get there by supporting meaningful consumer engagements then leverage the powerful digital ecosystems of Asia's digital titans. By investing even more in our direct to consumer excellence and elevating the consumer experience, we'll continue to outperform in the digital and integrated marketplaces of Asia. And by deepening our commitment to creative self expression and to communities, we'll ensure that our salient points of difference allow us to stand out in a sea of sameness. By following this path, we are absolutely confident we'll continue on the upward curve of explosive growth we've maintained for the last decade in Asia, and that will deliver annual growth rate between 17% 19% between now and 2023. Thanks to all of you for your time. And now I'd like to introduce our VP and CFO, Kim Racine. Thanks, Scott. Good morning, everyone. Today, I have the pleasure of walking you through Vans financial performance. Since the acquisition in 2004, Vans has consistently delivered strong top line growth for VF. Over this 13 year period, our revenue has increased at an annual rate of 17% per year. We've grown from a $400,000,000 business to a $3,000,000,000 global brand. As you've heard today, our success starts with a clear understanding of our consumer and is driven by our commitment to purpose and strategy. In the past 18 months, Vans performance has accelerated. We've grown a total of 40% and added $900,000,000 to the top line. Every aspect of our business is outperforming our expectations, including all product categories, channels and geographies. Well, it's helpful to understand the drivers of our current performance. The focus of today is on our forward looking expectation. I know the question on everyone's mind is, is our growth sustainable and is $5,000,000,000 achievable? When you think about these questions, there's 2 themes to keep in mind, discipline and diversification. First, it's the disciplined execution of our strategy and purpose that allows us to deliver healthy and profitable growth. 2nd, our growth is diversified and balanced across product, channel and geography. It's not the result of a single item or even a single category. Today, we'll review each area of the business and you'll see how discipline and diversification is driving our current performance and how it gives us the confidence to increase our forward looking growth rate to 10% to 12%. First, let's look at products where our diversity remains strong. The chart you see here on the screen shows our expected performance from 2017 to 2019 against the 2021 targets we shared with you last year. The first thing to note is that footwear is growing above 22%. Now that's against a target of 6% to 8%. Within footwear, not only is our progression or new product performing, but we saw significant acceleration in our core heritage product. Heritage is growing above 25%. That's well above our target of 3% to 5%. 2nd, apparel and accessories is also growing rapidly at a rate above 20%. Based on our strategy, we expected to see accelerated growth in this category. We're delivering on this goal and then some. Overall, you can see our growth is diversified and balanced across both footwear and apparel. Looking forward, we expect strong growth to continue across all categories. Our core heritage footwear business is expected to grow at a normalized rate of 8% to 10%. Progression is expected to grow 14% to 16% annually and accelerate the footwear business. Apparel and accessories is expected to increase 13% to 15% a year and generate $1,000,000,000 in revenue. By 2023, apparel and accessories is expected to represent 21% of total business and progression footwear will represent 19%. Right, let's move on to channel. Similar to what we see in product categories, all channels are exceeding our expectations. Our total direct to consumer business is growing at a rate of more than 27%, while our wholesale is growing above 17%. D2C, our strategic area of focus is accelerating. There are 2 benefits from this. Not only is our top line expanding, but as we shift revenue towards D2C, it improves our margin rate and profitability. When I look at D2C, what's most impressive to me is the majority of our growth is organic. Our store revenue is growing at a rate north of 23%, while our store count is growing at 8%. As a result, we've seen a significant lift in productivity and comp store performance, as every retail metric is moving in a positive direction. In 2018, our comp store growth was 30% globally. That's a big number, so I'm going to repeat it again. Last year, our comp store growth was 30% globally. This year, we're on track to deliver double digit comps. And that's on top of last year's double digit increase. In digital, we're seeing similar acceleration with e comm growing at more than 50% a year. Overall, our D2C growth is not an anomaly, as this channel has delivered an annual comp increase on a global basis for the last 10 years. In wholesale, we're also seeing double digit growth. This is the result of the focus and support we're placing on key accounts. We're ensuring that our partners are healthy, that their growth is balanced and inventory levels remain in check. Overall, we expect our momentum in each channel to continue. Wholesale is now expected to grow at an annual rate of 6% to 8%. This is driven by our white space opportunity with key accounts in each region. D2C stores are positioned to grow 8% to 10% annually as comps normalize. During this period, our store count is expected to grow at an annual rate of 5% to 7%. This means the productivity in our existing stores will continue to increase. Additionally, at this rate, there's still room for store expansion beyond 2023. We expect e comm will now grow at a rate of 30% to 35 percent. This is supported by our customs platform and work to accelerate digital. By 2023, we believe digital represent over 20% of total revenue and achieve a new milestone of $1,000,000,000 All right. Finally, let's look at growth by region. As you've heard today, this is no longer just a California or a North America brand. You can see this in our growth rates, which are balanced and exceeding expectations in every region we do business. The Americas is growing an annual growth rate above 22%. EMEA is growing faster than 19%. And APAC is growing more than 24% a year. Today, the Americas region generates $2,000,000,000 and represents 64% of the brand's revenue. It's growing approximately 2.5 times faster than planned, which is driving a disproportionate amount of growth. EMEA is also outperforming expectations. A year ago, we were talking about EMEA's turnaround with expectations of 6% to 8% growth. The current performance is evidence that we're ahead of schedule and the business is growing robustly. And as I mentioned, APAC is growing at an accelerated rate of over 20 4% a year. Within this, China is growing more than 30% annually. You can see the strategies and investments we've made in this emerging market are paying off. Looking forward, again, we expect to see strong growth from all regions. APAC remains the fastest growing region and will represent 17% of total revenue. EMEA's growth rate increases to 8% to 10% annually based on its wholesale strength and D2C expansion opportunities. We expect EMEA will be a $1,000,000,000 region by 2023. Finally, the Americas higher growth rate of 10% to 12% will allow them to become a $3,000,000,000 region. Now that we've gone through our revenue expectations, you can see Vans growth is a result of our discipline and diversification and driven by not just one thing. And while our growth is driven by discipline and diversification, it is supported by strategic investments. Over the past 18 months, VF has distorted more than $75,000,000 of incremental investment towards Vans. To accelerate our strategic priorities, enhance our capabilities and fuel future growth. Within product, we've distorted investments to elevate our design capabilities. This includes implementing and updating our 3 d technologies and our product lifecycle management system. Within marketing, we fuel demand creation by investing in media, content and events to increase awareness and drive engagement. We've also elevated our CLM capabilities and launched the Vans family program. In D2C, we've invested in technology to elevate our omnichannel capabilities and enhance our global customs and digital platforms. And finally, we're investing in our supply chain capabilities to increase our speed and responsiveness. This includes enhancing our distribution network and implementing new technologies to ensure the right product is at the right place at the right time. And while we've made significant investments into the brand, we've done so while expanding profitability. Our investments are often leveraged across VF and deliver a significant return. An example of this is the incremental investment we made into the 50th anniversary brand campaign, which led to increased brand awareness and acceleration of revenue in 2017. Overall, Vans has a track record of success. We are confident our focus on the consumer, disciplined actions and diversified growth will allow us to continue to deliver strong performance. By 2023, we expect apparel and accessories will be a $1,000,000,000 business. Our e com channel will generate $1,000,000,000 and represent over 20% of total revenue. The Americas region will be the size Vans is today on a global basis with $3,000,000,000 in revenue. And overall, Vans will achieve our $5,000,000,000 revenue target. Now to wrap up the day, I'll turn it back to Doug. Thanks, Ken. Thank you all very much for your time and for your interest in our brand today. I hope that some of the insights that we shared were able to give you additional visibility into not only why we are where we are today, but give you additional confidence and meaningful reasons to believe that we can continue to grow into the future and achieve that $5,000,000,000 target that we've laid out this morning for 2020 3. Before Scott comes up to bring us home, I thought it might be a good idea to just revisit some of the key points from today just to summarize. Hopefully, you've heard loud and clear that Vans is not just one thing. Key point here is that our strategically managed global marketplace means a diverse head to toe product offering that really balances 52 years of heritage with progression in our business. I don't think you see much in the way of reliance or complacency in what we talked about today. 2nd, we are focused on powerful strategic priorities. These strategic priorities lay on that foundation of our culture and our purpose. We are focused and disciplined brand, all right. So creative expression is what we're all about, but that does not mean that we aren't incredibly focused and disciplined as a brand. And we really manage that global consistency and local relevancy everywhere we show up. The third point that we are very clear about who we are and what we stand for, all right. This is not only something that we demand of ourselves and we believe differentiates us in the marketplace. Our consumers expect this of us and they really are giving value and going deeper with Vans. They're seeing a lot of value in the sharpness that we bring to this around those pillars that we've talked about all day today. That clear and meaningful point of view is what it's all about. Our global channels continue to expand our sales and brand experience. I think our GMs did a great job of bringing that to life today. Thank you, guys. Vans is a retail leader with 52 years of experience, but we also balance that by going narrow and deep with our best in class wholesale partners. And then finally, something that's very important to me and to our leadership as a brand. We believe that we are taking our rightful place as the number 3 global sport lifestyle brand. So we're no longer just an action sports brand. While that will always be a critical part of who we are, we have the strategic acumen, the iconic product and the deep consumer connectivity to compete at the highest levels, while remaining meaningfully differentiated from those traditional brands. And now to bring us home and into the QA, I'd like to introduce VF's Chief Financial Officer, Scott Rowe. Scott? All right. Thank you, Doug, and thank you, everyone. So I'm going to talk a little bit here about the VF perspective. But obviously, this day is about Vans. And as I look across this room and think about all the questions that you give to me, to Joe, to Steve, this is one of the most common questions, right? What about Vans? What's behind all this growth? What's the secret sauce? Well, today, you got a little peek behind the curtain, right? You saw a really good overview of what are those strategies, tactics. You saw how broad this franchise is. And I think most importantly, you got a good look at what I believe is the best team in this space, right, that's delivering this growth in the past and even more exciting to all of us what they're going to do in the future. So if you would indulge me a little bit, I'm going to take the VF perspective and try to put in context a little bit what you just heard about Vans and how does that relate to the broader VF, okay? And I'm going to do that from a historical perspective. I'm going to start back in 2000. You might say, well, why 2,000? What's special about that? Nice round number for one thing. But the other part of it is, if you think about VF, those of you who know our story a little bit, it really had a lot of parallels to the Vans perspective right prior to the acquisition by VF. We were about a little over $5,000,000,000 We had not grown in about 3 years. And as a result, management at the time, with a little prompting from our Board, got busy and made an acquisition. We bought The North Face, right? And the gift with purchase was our current CEO, by the way, who is part of that organization. But so why was that important? Well, it was really a milestone because it was our first entree into activity based lifestyle brands. It was our first entree into retail from a full price aspirational standpoint. And it was really a watershed moment. And in fact, really powered a lot of the growth of VF during that period of time. Now, of course, Vans came in, in 2,004 and you saw that earlier in that first phase, while Vans started to grow from 2,004 and beyond was relatively small in the scheme of VF. And it, while important, was not really the big driver. TNF was really the big driver. So then the next big phase of growth for VF was the international growth. And at the time, VF declared that international was going to be a priority, that we wanted to build a platform. We had an international business. It was a little less than $2,000,000,000 if you go back to 2,006, and I know a little bit about that. That's the year in which we declared we were going to put a platform in place, and that's the year that I went to Europe to be part of that team to build that. And at the time, we I like to characterize it as sedimentary layers, right? We had bought businesses over the years. They were doing okay. What we were not doing though was creating a powerful platform that we could leverage. We weren't getting the financial benefit of being big in these categories nor were we co located or having the opportunity to share our talent and resources. So we started to build that platform. And at the same time, our brands like The North Face and Vans saw unparalleled growth from an international standpoint. The other thing important there is our tax platform. So if you think about at the beginning of this journey from an international standpoint, I said we are less than $2,000,000,000 Today, that's almost $6,000,000,000 in international business and more than fifty in international business and more than 50% of our cash flow and profits come from outside of the United States. Next, Timberland, the largest acquisition in BS history, dollars 2,300,000,000 Also important, tying back to that international topic, because the Timberland brand is unique and really indexed us more towards an international business, more of the Timberland businesses outside of the U. S. Than inside of the U. S. That was unique for our large brands. That's been successfully integrated into our platforms, including our tax platform. And from a return standpoint, we have exceeded what we had talked about and committed to externally from the Timberland brand. Now D2C, I said, really came in with these activity based lifestyle brands, but we have really accelerated the D2C focus and growth and particularly around the digital piece of that business. In fact, in the Boston meeting a little over a year ago, we talked about 25% compounded annual growth in digital. As CFO, I really like this part of our business because it's also our highest return business. And as you saw today, powered by vans and really a broad based strength, we're seeing that so far through our performance since the declaration of that plan, we're averaging about 30% compounded annual growth. Now we also like D2C because it's a higher return business, it's accretive overall and also from a gross margin standpoint. Obviously, that's one of the key drivers to mix. And lastly, of course, Vans over the last couple of years, what has happened with Vans and its importance to VF really can't be overstated. It's been a key driver in the last couple of years and been a really important part of the overall BS story. So as you can see, during this period of time from 2000 till today, almost 2 decades, there's been a lot going on, not just one thing has really powered that business. So remember back here, a little over $5,000,000,000 Jeans and Edimets Company. Today, 2.5x, more than 2.5x bigger than that. And you can see graphically what's really driven that increase. Now another thing that we talk about is VF is a value creation company. And that's to some maybe not obvious what we mean by that. So I chose to really have this conversation through the perspective of the 3 lenses that we talked to many of you about. It's the 3 lenses that we use to evaluate our own business. It's the 3 lenses that we use to evaluate future strategies, potential acquisitions. Those are strategic view, financial view and the ownership view. So I'll start with strategy, right. Our strategy is kind of a simple point of view, right. It's what is structurally attractive, it's the where to play and how to win. What areas do we want to be involved in as a company? What brands do we believe can thrive and be successful in those where to play arenas? And what do we choose to take to market and win going forward? And then financially, what's the result of that, right? You've seen the financial targets that we laid out in our long range plan. In our opinion and our belief, these strategies will yield a total shareholder return that would be top quartile compared to the options that you have. And finally, when you think about the ownership lens, right, what makes VF the best owner of these brands? What makes VF successful in achieving these strategies? Well, part of that is the capabilities that we bring to bear, right? That's the skills and the know how that we have that we can we believe 1 plus 1 is 3, right? It's additive to some of these opportunities. I would also submit it's our purpose, right? Because purpose now is a North Star for everything that we do as a company. You heard the Vans team talk about purpose as it relates to the expressive creator and free to be, right, creating a movement for the expressive creator. And that ladders up beautifully into the VF overall purpose. A lot of people from a financial standpoint ask me or ask us, so what is it? Is it purpose or is it financial return? How do you break the tie? And I like Steve's answer to that. It's the power of and. It's not either or, it's both. And I'll tell you one reason I think this is important is you think about the acquisition of talent, right? It's acquisition and retaining talent. It's going to be the battle for all of us going forward. And I don't know about you, but when I interview younger people, especially today, I don't interview them, they interview me. What is it you stand for, right? What is this company about? Do I want to work there? I think having an acute understanding of what your purpose is, is going to be one of the key differentiators for us as we battle for that talent on a go forward basis. So I talked a little bit about those from the ownership perspective. What are those capabilities that we uniquely bring to the table? And I'm going to now try to tie these two things back together. So how do those capabilities relate back to Vans? And how did those capabilities maybe relate to some of the things that we talked about today? Financial discipline, I think this one is well understood. You remember in KB's Kevin's earlier presentation, we talked about Vans at the time of acquisition in the mid-three 100 million dollars range and really not making any money. So not only has this brand grown dramatically on the top line, but financially as well. You saw that with margins over 20%, it is now a significant contributor, not just to top line growth, but also bottom line growth. And that financial discipline is deeply ingrained in this business. Brand management. Now we, from the corporate center, can add virtually nothing to the DNA of Vans. It exists in this building and this management team. But we have provided disciplines to help sharpen that focus and to ensure that the things that we know in this brand are scalable and transferable. I'll just give you one thing to think about. You remember those 3 phases of the evolution of Vans since 2004. Each of those phases was presided over by a different president, 3 different brand presidents, including 2 that are in this room right now. And I'd also just have you think that during that same time, those brand presidents reported to 3 different CEOs at VF. So through this entire journey and this evolution, you could say that was a happy accident that we just kind of everything aligned and we went through those transitions at the corporate and at the brand level. Or I would submit maybe that our focus on talent and succession planning has been one of those things that has contributed to the consistent success of this brand's performance. International, we talked about that. Clearly, the Vans brand has grown dramatically internationally. You can see from a quarter of their business to almost half. An interesting perspective, I talked earlier about that platform, building the platform for the international business. And as we look at companies that are in that $200,000,000 to $300,000,000 range, and we look at a lot of them from our business development standpoint, There's some common things that we see. One is a lot of times an inability or an unwillingness to invest capital or risk capital into new markets becomes a barrier to international growth. That's one thing. So certainly, we can provide that capital. But I think more importantly, I think a bigger barrier is frequently just the outrunning the management capability, right? It's hard to open new markets that are far away. And if you don't have a depth of management and you don't have the discipline and you don't have the infrastructure, things like supply chain, banking relationships, understanding how duties work, an efficient tax platform, all those factors reduce the friction of international expansion. And I would argue that Vans as well as the rest of our businesses have benefited from having these platforms that are leverageable for international expansion. D2C, I think this is an example where VF benefited a lot more from Vans than vice versa. This is one of the, if not the best B2C group in our space, right? They're excellent at what they do. And taking those learnings, both from brick and mortar and from the digital world has really helped VF get better as a retail operator. And as you know, this is one of our key strategic pillars. And finally, supply chain excellence. I think most people would give us credit for being good supply chain operators. That had a little bit to do probably with that profitability increase because of the sourcing capabilities, the deep know how and the relationships that we have. Also the social compliance, it's really hard to scale and maintain that social compliance. Those are all really important. But just think about this, remember those charts, the rapid growth and how much that growth has exceeded our expectations of even 18 months ago. And you know what you never heard is the supply chain didn't deliver. And I would tell you that the women and men in this supply chain that are enabling this brand are a competitive weapon. And the fact that they have scaled, kept pace with what this brand is doing is an amazing thing. It's behind the scenes. You only see it when it fails. But when it works well, it's really impressive to see what they've done. So hopefully that has connected a little bit of context on how this Vans story ladders up into VF. And you heard a lot today about a really diversified and deep growth plan from the Vans brand, right? Geography, category, gender, it's a very wide set of growth initiatives. And then you look back in over history, right, and you see that VF during this period of 2.5 times growth has had multiple periods of significant growth from a lot of different factors. So all of you in this room will either answer for yourself or have to or be asked the question, do you have confidence in this $5,000,000,000 growth plan? And do you have confidence in investing in VF to deliver that top quartile TSR that we've committed to? And I think you'll agree with me, the answer is both complex and simple. As you think about, do I have confidence? And what gives you confidence to invest in BF? Well, it's not just one thing, right? Whether it's Vans or whether it's VF. What gives you confidence in this future plan is not just one thing. And so with that, we are concluding the formal part of this presentation. And in just a minute, we're going to take your questions and we're going to have Kevin Bailey, Doug Paladini and Steve Rendell join me up here to take your questions. But before I do that, I would just like to ask everyone to give a round of applause to all the presenters today. So I think it's been an excellent day. And I don't know about you, but it's fun for me. It just makes me proud to see this team when it works together because it really is a powerful, powerful machine. Couple of reminders, as you guys come up here on stage, this is a webcast. So for those, anybody asking a question, I think we've got mics that are going to be handed around. Please wait till you have a mic to ask the question, because if you don't, they won't be able to hear it on the webcast. And if you give us just a second to accumulate, then I think we can start taking your questions. The hands are already up. All right. So we'll go 1 by 1. But again, we're hope you guys gained a lot of insight into what is a very powerful story. And now you've got 4 of us to fire questions at. And if anything we can't answer, we'll look to the Vans team to go as well. Mitch? Good afternoon. Over here. Paul Trussell, Deutsche Bank. Kudos to the Vans team for a great presentation. Just to start off, you spoke about the consumer, wants you to have a strong point of view. Scott, you mentioned purpose. How do you grade yourself on that? Do you feel like you've been bold enough and loud enough from a messaging standpoint? And you talk about inclusiveness and empowerment and authenticity. Just curious, you believe that the marketing is where it needs to be on that front, especially in the face of us seeing some other brands take some very unique and controversial steps. And then second, while on the footwear side, I think certainly speaking for myself and maybe others have a good understanding of the strategy and the focus and the momentum there, just really curious about having more details on the apparel side. Maybe we can have some color on men versus women's versus kids or domestic and international DTC versus wholesale. Just help us understand how you're going to really move the needle on the apparel side in a very crowded universe? Thank you. Okay. I'll start with the first part. So in the spirit of being hungry and humble, I will say no, we're not going to fly any mission accomplished flags anytime soon around here. We still feel like we have a lot of work to do, but I will tell you that we also believe that much of our current growth is predicated upon the concept of delivering a clear differentiated point of view about who we are and what we stand for. I do believe that being clear about who we are and who we are not that open to anyone not for everyone kind of thinking is pervasive across all the functions, all the regions and in all the channels in which we do business today. So are we focused in the right place? Yes, we absolutely are. Have we achieved everything that we want to about delivering that message? No, not even close. I would just add on that from a broader VF standpoint. What sits in our integrated set of choices is a focus around a deeper understanding of our consumer, data and analytics platform, but more importantly investments behind demand creation. And you saw us last year begin to spend more strongly against certain brands and their connectivity to that consumer. And we see this as an important part of when we have the means to increase that volume, we'll do it carefully, thoughtfully within the context of our financial commitments. And what you see here in Vans is a great example of how we're able to use that targeted messaging through some of the new demand creation platforms to create that loyal consumer following. And then on the apparel piece. Yes, on the apparel piece, thanks for your interest there. It's a very important part as Vicki stated. We really no longer it's been a cultural shift for us. We really no longer view ourselves as a footwear brand that makes apparel. The cultural shift is now that we are a footwear and apparel brand. And that shows up in the way that we have focused on those 5 key must win categories and the geographic relevance that comes from each region that the general managers talked about. I think that what you see from us is you see a fairly tight and focused approach. So we do believe that there's a tremendous amount of runway ahead. Vicki put up that was the first person to talk about it's becoming a $1,000,000,000 apparel brand. We see tremendous growth ahead of us in all the categories in which we play across men's, women's and children going forward. Great. I think I would just build on it with one comment regarding geographic relevance. And that's the reality is as Vans has grown from a California brand to now a national brand of the U. S. And then a global brand, apparel is much easier for a consumer to enter into and is a bigger part of the whole outside of the U. S. I think what we saw in Europe and Asia as the brand expanded was it was easier for a consumer to adopt a T shirt than it was to necessarily put on a pair of checkerboard shoes. So I think we saw a deeper penetration in apparel outside the U. S. I would tell you that over time though that starts to normalize as the consumer gets a deeper understanding of the brand. Good afternoon, Lamont Vasilescu from Macquarie. Thank you for taking my question for the presentation. I wanted to follow-up on the Slide 6, which breaks out the EBIT margin. I think that's fully loaded 23%. How do we think about that margin structure with the context of the $5,000,000,000 target? And then any lessons learned with regards to gross margins efficiencies, SG and A efficiencies that you can take from Vans and translate it to the other big brands on the platform? So I think I like it. What do you think of what do I think about it? We that's just to clarify, Laurent, that said more than, by the way, that had the little greater than side. So obviously, as a D2C, a business that over indexes on D2C, over indexes on digital, and just in general has high gross margins, the growth of Vans is good for both gross margins and operating margins for VF. So as you think about going forward, we've talked about that mix that we see because our highest margin businesses are fastest growing. This is an example of that, right, international, B2C, etcetera. And we would expect that to continue structurally. What have we learned? I don't know that we've learned that much uniquely about Vans. I think the formula here is consistent and applies to our other brands as well, right? I mean, I'd go back to this powerful platforms. As we've grown and scaled the leverage through Viaphasia, thinking about how we leverage our investments in the strategic side of the business that's driving that growth, while at the same time in the back end getting leverage on those things that are more pedestrian and not differentiated. I mean that model, which is true for Vans, is really the model for VF in total. Not sure did I answer your question? Or yes, I think it when Vans grows faster than VF, it's a virtuous thing. It's a good thing. Hey, guys. Thanks for everything. It's Michael Binetti with Credit Suisse. I guess just for I'm thinking about the sales and everything you guys laid out on the 5 year. You gave a chart that looked like it was a fairly simple chart that showed a smooth growth rate over the next 5 years. But obviously, you're in a very nice fashion moment right now with this brand. Can you help us think about the cadence of sales growth next year versus this year? I know you talked about a couple of the platforms and some of the like the ultra range that had some pretty good order book rates. Can you just help us think about as you look past the growth rates we're looking at today into next year? Yes, we're not going to go to that level of granularity. We're not giving next year guidance. I think what you should think about it, Michael, is just we gave you the 2023, you know where we are in the base and you can assume a linear kind of rate. I mean that's we didn't really break it down more than that, but that's what I would assume from a modeling standpoint. And if we think about the 23% margins that Laurent mentioned, maybe I know we have some information going back really far to the acquisition of the brand, but maybe you can help us orient ourselves on how the margin of this brand has changed over the last few years. And that's obviously a very good margin level. I'm sure a lot of it has come from the direct to consumer. How do you think about the natural margins of this business going forward within the growth plan? Is there do you think there's a natural limit that we should think about? Or should it just continue to trend along with the channel mix? Or any other margin buildup that we need to speak about? Looking at my friends here. Speak about it. No, of course, this will be a funny kind of internal thing. But no, there's no limit to how high those margins can go. No, but seriously, most of that, you answered your own question in a sense, Michael. It is mix, right, that's driving it. I'd say a couple of things. Remember, this one of the really unique things about Vans is it's an aspirational brand at a very affordable price point. And if you look at the competitive sets that they're that they just gave you a lot of references to, you're talking 2x, maybe more than 2x in some cases in terms of price. But just because they can doesn't mean they would or should, right? But there is pricing power in this brand. So natural market over time, we've seen we can maintain things like in the progression, the ultra range, there is ASPs are elevated from some of the more traditional categories. And we certainly have a lot of levers to pull or I should say these guys have a lot of levers to pull on the margin side. All that being said, the biggest factor for the margin increase, both in the past and in the future, will be mix for all the reasons that we talked about. We're not expecting a big natural margin change, but those levers are there and there is a lot of pricing power. Hi, there. This is Alex Walvis with Goldman Sachs. I had a question about the product mix. When you last showed us the slides of heritage footwear versus progression footwear and apparel, Heritage footwear was around 55% of the business and you argued that it was expected to become a smaller part of the business. Now we're sitting here and it's 65% of the business and once again you're expecting it to fall as a proportion of the business. Why is that expected to change and why is that the right strategy? Yes. Good eye. I think the first thing to say is that our progression footwear expectation remains on track. So it's not that we have failed to meet our expectations there. What we did not see was the velocity of growth in our heritage footwear business. So the other parts of newness that are in the progression footwear that are in apparel and accessories, those are right in line with where we expect them to be. But the heritage piece of the footwear business has vastly exceeded what we originally planned 18 months ago. And I would just add that I think a very important part of that has been our ability to proactively seed scale and maximize those iconic silhouettes in cycle. As Dave talked about earlier, as the authentic was leveling out, we had already begun to spin up the old school and now we are doing the same with other silhouettes as well. And that not just one thing across those multiple silhouettes of the in our classics range. The fact that we're adding so much newness to that base of heritage looks that people expect from us that has driven a predominant amount of the upside in that heritage footwear bucket. I'd just add on to that because I think that's a really important point. Any two points that you choose are going to give you very if you looked over history, we'll give you very different perspectives on what's driving this business because of how good this team is at managing the up and the down, right? And during any two periods like from 'fifteen to 'seventeen, Slip On and Skate High, for example, was growing at 20% or more during that same period of time, right? And you could legitimately say that was driving that business during that period of time. As that came down and old school increased, then during that period of time, you would say, well, that's driving the business. If you zoom out a click and look over time what it is, is it's very consistent that this brand is growing and the overall water level is raising. But as they are moving through the product lifecycle management and these icons are coming and going, it's not a trend that's happening, they're actually managing that trend. And I think that's the more important point to take out of that. But in any two points you choose, you're going to see a slightly different picture because of that fact. I would add real quick to Laurent's earlier question, what do we take from this to our other brands is it's really this understanding of product lifecycle management and a clear understanding of the integrated marketplace and where to place these products and how to really lever your icons and newness help to stretch this brand. This is I think this is and we've talked about this over the years is Vans is really the benchmark for our portfolio of how the brand thinks about an integrated marketplace, proper segmentation of product and then that product lifecycle management. It's really been critical. Mitch Kummets with Pivotal Research. So if you drill down a little bit more on the next $1,000,000,000 that you expect out of the Americas, which is the target today, specifically by channel and category, because when I look at how you view the brand as a whole, obviously outpaced growth in direct versus wholesale and apparel and progression versus heritage. When I think about the Vans brand in the Americas, you've got a pretty big retail footprint here. It seems like you're doing a lot on the wholesale side, doing more with like Foot Locker. Is there a bigger sort of wholesale opportunity here where maybe the delta between kind of direct and wholesale isn't quite as wide as you're viewing as a brand as a whole? And then even just on a category standpoint, it seems like you've got a more developed heritage business here probably than you do internationally. Is there more growth in apparel here than maybe you know? Yes, I'll just I'm going to reiterate some of the white space opportunities that Mitch Whitaker spoke to. I think he did a good job laying out that we are still have a tremendous amount of runway in this region despite the fact that we are in our 6th decade of doing business here. D2C expansion, right. Our digital opportunity remains substantial in this space. And what Katie talked about in terms of it serving the purpose of building brand affinity and loyalty, not just being viewed as a transactional channel, I think is a critical differentiator for us there. I would also talk about Mitch's example of white space when it comes to the different channels that we plan. As you know, one of the most important channels in footwear, we are a tiny fraction of what our competitive set, the traditional leaders in the space are. And so we are just starting to understand what our brand can mean there. I would say in general, our physical and mental availability as a brand in this region still has a tremendous way to go. And some of the examples he gave you in terms of channel, I think indicate where we see a tremendous amount of white space going forward. And Mitch, you're probably looking at store count and we all know there's kind of some natural limits for our mall based retailers when they get in a certain number, you'd say, okay, is there more there? But remember in David Theiss' presentation, they were talking about the different formats too. So whereas maybe if you guys help me out, but if you went 3 or 5 years ago, it was a fairly consistent mall based format that Vans was rolling out and that's still a really successful format. But today, there are new formats as well that are showing that are doing well in our growth opportunities, the street level stores, the boutiques and showcases, yes, which have a lot of room to run as well. So the diversification also of the D2C model is another growth factor that probably you wouldn't have said was as obvious if you went back 3 to 5 years. Yes, Mitch, I just wanted to tag on and point to something in Dave's presentation. He talked about progression and he talked about the MTE product as well. So when you start realizing there is also new wear occasions. So as Vans is able to expand itself into additional wear occasions for the consumers, that is another piece of where this big opportunity comes from. Great. Thanks. Erinn Murphy at Piper Jaffray. I guess I have a couple part question on the loyalty program. You talked about 3,000,000 consumers in the U. S. Captured last 6 months. I guess I'm curious, who do you benchmark yourself here? What's the TAM for the U. S? And then secondly, are you thinking of rolling out loyalty globally? What's the international kind of scale opportunity? And then finally, you had that really interesting cohort chart on ages that you have in the Vans consumer today. Where are you seeing the biggest incremental, I guess, age category from a new consumer? Thanks. Okay. Yes. We're very happy with the launch of our Vans family loyalty program. As Nick talked about, we just passed 3,600,000 sign ups. And I think happy with the launch is an important thing to say because this is so just the beginning of what we think the loyalty program can do for us. It's still very, very much nascent in our brand. We believe that the loyalty program has merit in a lot of places around the world. And we're going to we've asked our GMs and the platforms in APAC and EMEA to take a strong look at where they think it can mean the most there as well. Now it's not going to be a ubiquitous platform that's everywhere Vans is. We're going to put it everywhere it makes sense for it to be. But we are going to leverage that as much as possible. The end goal is about creating that deeper connectivity. So I would say that there's a continuum in what the points oriented free stuff side to a very experiential side. And I would say that we're on the experiential end. It's more about accessibility and getting inside the ropes of our family and getting to see what's happening before everybody else getting that access. That's really, really important to us that could be access to product, to content, to events that we have, just welcoming you into being more engaged. And we're seeing that. I think Nick gave some metrics already in the presentation about the level of engagement ticking up in that population of 3,600,000 people. So we look forward to learning as much as we can from this. Remember our North Star is one to one engagement with our consumers. And the loyalty program is a major funnel to helping us reach that North Star. What part of your question was the new customer acquisition, is it SKU demographically younger, the same? What do we know about? Okay. The most interesting demo part on new customer acquisition is the power of the female consumer coming into the Vans universe. We're seeing that very clearly. Now again, as we move as we try to move all of our mindsets, including yours from being this male oriented skater boy brand to being more of an expressive creator brand that reaches more of a global lifestyle consumer, we're seeing the points of accessibility for the female consumer expand and a lot of the newcomers. I think the chart that Nick showed that more than half of the newcomers are coming are female and that's really very welcomed for the Vans brand all over the world. And I think you had one other question, which was international. So yes, the international platforms are expanding into the CLM program as well. The loyalty piece, as we dovetail on to what North America learns from the launch. As Doug said, it's still very early. And I think as Doug said, loyalty is a phrase maybe that speaks to this free stuff thing and it's really about data and analytics and the stronger data and analytics capability we're building across BF. Yes. Hi. John Komp from Baird. I wanted to follow-up on the heritage business. And I know it was mentioned before that the dollar difference looking out 4 to 5 years is pretty substantial. I'm wondering if you could just talk about the incremental velocity you've seen there. How much of that has come from outside of the core expressive creator customer? So how much has been entirely a new customer? And how do you think about keeping that customer engaged longer term? And then separately, just a follow-up for Scott, I wanted to ask, just as we think about kind of the near term guidance for the brand this year, you talked about kind of a straight line projection, but so to speak to get down to the guidance for this year, I think we have to assume something quite a bit lower in the second half of growth for the brand. So how do we kind of reconcile that dynamic? Let me start with the first one. So how do we kind of reconcile that dynamic? Let me start with the first one. The graphic that showed the concentric circles from the expressive crater at the center to the halo consumers on the outside, I would suggest that much of the new consumers coming in at the top of the Vans funnel right now are coming from that halo outside of the expressive creator. Okay. So that next concentric circle out from our target, the expressive creator is such an influential consumer that it halos out to a much broader market. And I think we're now getting the resonance where it is beginning to bring in that pull in that magnet feel from that broader consumer that is inspired and looks to the expressive creator, but may not be that earliest adopter that I think that's a lot of where that new consumer is coming from and I'll defer to you on the second part. Yes. So I guess the first comment I'd make is we're not giving new guidance, right? And we said greater than 15% is what we're looking and you're right. I mean if you do the math based on what you what we've already printed, that would assume a pretty significant slowdown in the second half. I guess my earlier comment on doing a straight line is we really didn't shape it, right. So what I'm telling you is we're going to come back later. We'll give you an update at the end of the quarter on our guidance for this year. When it's appropriate, we'll start shaping next year. We really didn't get into that granular of a curve. So we really are silent on that point. So if I were you, I would model it on a straight line. That's all I'm going to say about that. Hi, guys. It's Camilo Lyon from Canigord Genuity. So, Vans is a distinctly summer brand. I'm curious As distinctly what brand? Summer. Summer, warm climate brand for California. I'm curious as to the importance of the winter season for you and more specifically where you're positioning your innovation and investment dollars behind any seasonal categories? And then just lastly, how to think about the units versus price composition within the fiber outlook and if these innovations actually give you an incremental step up on the price component as we think about that plan? Okay. Yes. So I would suggest that we have worked diligently again with all humility. I certainly don't believe we achieved everything we want to. But I would tell you that if you look at our quarter by quarter business, it is more we've reached more of an equilibrium than we ever have before, continues to be more even quarter by quarter. And I think we truly have become a 4 season brand. I would put our MTE product and I would say head to toe as well because I think apparel and accessories is an important piece here. I think our MTE product offering has enabled that. Now I think there's a couple of specific things. We talked quite a bit today about our global innovation center and the way that we can leverage a VF platform more powerfully inside of our brand. I think when you look at some of the heat retention properties in the MTE product that's featured in the mock store right now as an example and the 3 60 degree warmth. We've learned a lot from that platform and by the way from our sister brands as well. I think The North Face is clearly a leader in that space. And so is Timberlands also done an incredible job with their boot business in this space and we've learned from both of those brands. So I think that just speaks to the power of the leverage that we get out of being in this group of VF brands as well. But we believe that being seasoned brand and I know our sister brands feel the same way is critical to our future growth. We operate in dual hemispheres. We know what the weather we know what the when it's 70 degrees and sunny here in January, we know what it's like in Beijing because we go there. So being part of being a global brand is understanding how you be that global consistency, but local relevancy for them at that time, it's staying warm for Scott Basham's business and we have to be able to respond to that and we try to do that in a very head to toe way. On the ASP or units versus dollars, Kim, keep me honest here. I think there's modest increase in ASP as things like progression, which have a little bit higher ASP grow and become a larger percentage, but that's not material as you look over the period of the plan, right? So modest increase, not necessarily in margin, right? I think the margins are going to be somewhat consistent, but you will see as innovation comes in that in general that's going to drive slightly higher ASP. Also apparel as it indexes a little higher will also change that profile a little bit. Scott, one thing you mentioned earlier, I'd just like to reiterate for that point. While we certainly are playing with price elasticity in a lot of new ways, you saw a lot of footwear news examples today that are priced up quite a bit from what our traditional basis. A big powerful base of bands is that price value equation and the amount of value, the amount of coolness that you get for the money. And we believe that's an important distinct something that sets us apart from our competitive set and also a primary value that our consumers continue to appreciate. So we don't want to move away from that. We want to build an end on top of that to offer products at a lot of different price points. Hi, Sam Poser with Susquehanna. I want to follow-up on the purpose here and how you talk we're talking a lot about product because it's sort of more obvious. But you talk about the brand purpose. I mean, sort of what comes first here, the chicken or the egg with the purpose versus the product? And then how are you going to apply sort of the manners by which you made these great strides with Vans into North Face and Timberland? Thanks. This serves the brand level? I'll grab it. Okay. I described and all of our leaders would describe Vans as a culture led brand. It's driven by the purpose. I don't think we could realize the full value of our strategic framework that David illustrated for us today without that powerful base. A wise man once told me that culture eats strategy for breakfast. I think you borrowed that from Peter concurrently. Yes. But so I would say that we are a culture led Vans is a culture led brand. Our purpose is to enable creative expression in youth culture by being that icon, that global icon. And then once we have that powerful base and we're doing everything we can to live up to that purpose, then the strategies can reach their full potential. That's how I would frame it up. And then Sam, how do we take that beyond just Vans? I mean, we as a company, we as an enterprise this year really embraced what our corporate purpose is and it was a very thoughtful creation of a purpose that all of our brands can click up into. And it's about creating movements of sustainable and active lifestyles for the betterment of people and our planet. And you heard today this group talk about creative self expression and how that really enables people to be free for who they are and really accepting that. That is important one of the three territories that we as an organization are focused on. We have free to be, really manifested itself here today. We have outside matters, which is everything around what the North Face Timberland and our outdoor brand stand for and that's about access to the outdoors, bringing people into the passion of those activities to extend and have an impact on the environment. And the third is about worthy work and it's really about raising the dignity related to the trades and really helping grow and educate people to really look to and want to participate in many of those work activities. And certainly, we will benefit from these as an organization. That's where the value creation comes from. But this is about how we create loyal relationships with consumers. This is how we attract and retain top talent as people look for organizations, companies that they can align their own personal values to and bring those to life in their best self to work every day. We'll do 2 more. This one here and then we'll end with Omar for question. I've done digital analytics competencies across two dimensions. Dave spoke about the test and learn competency to identify new product opportunities. How do you lean into that to kind of grow that progressive category, diversify some of the risk away from the heritage? And then the second dimension, what are the digital inputs that you're looking to avoid a situation which seems to be the demise of any footwear brand that goes on a great run such that retailers get on the wrong side of inventory. How do you what are the things you're watching to make sure that the channel is in a good place and we don't end up in a situation like we had in EMEA a couple of years ago? Data insight and analytics is one of the core VF platforms and Vance has really benefited from that. A couple of very good examples based on what Dave was talking about earlier, our SKU analysis, our real time sell through analytics that we have at our and our inventory analytics. Those are all insights. Those are all pass to visibility that we didn't have during the time that you're talking about that we do have now. And we're trying to leverage those as much as possible to stay a step ahead. It's almost impossible to perfectly do that. I think we're going to continually get better. But there is an inherent friction in the wholesale relationship, which is there's always a lag and you're always going to see some imbalance. I mean, that's just the nature. We're working really hard to narrow it, but I think it's naive to think that we won't ever have inventory imbalances because we probably will, right. We just are focusing on making them smaller and smaller. Thanks. It's Omar Saad from Evercore ISI. Thanks for taking my question. Obviously, the team has done an incredible job, culture, strategy, execution, product innovation the last couple of years, but still the growth has been almost inexplicably explosive. It sounds like a lot of the upside relative to your plan has come from the female side, has come from the classics business, maybe a little bit outside that core creative expressive creator. I would be remiss if I didn't ask, we've seen and I hate to bring up another company, but we've seen the Adidas retro franchise, they've really wound that down. It was a multi tens and tens of millions of units the last few years. And maybe to some extent, they're left a little bit of vacuum there. I'm not saying that's not necessarily a bad thing, but maybe it helped accelerate the growth and maybe you guys are doing it better than they did. But I just wonder if you thought about that and if that's been a bit of a driver there because that was a huge phenomenon with a similar silhouette over the last few years. Thanks. Yes. Thank you for your question. I'll start. Please jump in. I'm just going to go back to Icon Management. We are being very, very thoughtful about managing the supply of any one style to elongate the demand curve. We are not interested in feeding the beast. And I think our accounts, our general managers, our accounts will all tell you the same thing. We're abiding by a very disciplined approach to making sure that no one product takes us as a brand out of balance in any region around the world. And I'm not going to speak to what happened with another brand. But for us, we are constantly pushing against that to ensure that we remain in balance. All right. So let's bring our Q and A to an end. And just a couple of thoughts. I hope what you're taking away from today is VF's commitment to be purpose led and how we are extremely focused on creating value through our intense focus on execution against a clear set of strategies. We're 18 months into our transformation journey and it's a transformation to become much more consumer minded and much greater in our focus on being retail driven. And I think what you see here today with our Vans business really being able to walk you through each one of those elements that allow our enterprise to be successful in the coming years. This is really one of the best examples that we have of an extremely talented leadership team focused on a very clear set of choices and capabilities and then the discipline to work together across the globe to drive a very succinct set of execution strategies. And it's that focus that we laid out to you last year in Boston. It's that focus that we continue to drive across our portfolio and it's that remember back to the stair step growth that we showed you that we would achieve over the 5 year period. We're continuing to accelerate into that long term aspiration really driven through the expertise of our teams. The singular focus against these strategies that allow us to become more consumer centric and more retail minded in our execution that puts us in the front of many of our competitors, but most importantly puts us in a very strong point of loyalty to the consumers that connect with our brands. So with that, we will bring our presentations to the end. Here, I'd like to thank everybody who joined us in the webcast. At this point, we will be signing off. And for those of you that are here with us in the Vans headquarters, we would love to introduce invite you to come upstairs in the outside patio. Steve Van Doren and his team are prepared to share with you the Van Doren spirit and share a few well barbecued items for you guys to understand what really is at the core of what we love most about this brand. So thank you. And most importantly, thank you to our Vans team. I know how much time and energy you put in to being prepared today. We appreciate that. I think everybody in this room here appreciates that. And with that, let's go upstairs and enjoy some time together.

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