Jen Foyle: Sorry, I got disconnected. Swim, interesting category for sure. Lots of learnings here. It’s still a great business for us, high margin business. I would like to say that the teams have taken away how to think about the business on a more profitable growth trajectory for the future. My teams are just in Brazil actually coming back with what I think are the best trends out there and we’re certainly putting them into play and near in. And we’re definitely doing a little bit more test and scale there. And for sure, we’re looking at — what’s interesting, we have American Eagle and Aerie and we have American Eagle women’s and Aerie, which is a women’s brand. And so as I think about our opportunities as a company, we take that into play, right?
We’re better together. And that’s what I was — as we talked about the gateway stores, you see all of our brands house together. And guess what, we’re seeing growth in both women’s business, Aerie, top line both Aerie OFFL/NE and then AE. So it’s amazing what we can do if you just think about the business that way. So as I think about Swim or as I think about trends, not only do I think about Aerie or OFFL/NE, I think about American Eagle 2 and what are the women wanting and how do we position our company for growth in all of the categories. And that’s, I think, a competitive edge. So going back to swim, as I think about that, that’s the way we’re thinking about the business. And certainly, we’re making sure that we don’t over pitch the plan, again, high-margin business and testing and scaling there.
And I think we have other businesses that we can leverage in all brands. So more to come there. Spring looks great. And I hope we can continue to deliver.
Jay Schottenstein: Okay. I’ll take the question like about the Middle East. Like we have a strong international business there. There — like the first couple of weeks, it did get a little whack, but the last couple of weeks, it is coming back pretty strong. So we’re very optimistic there. And we’re playing for PC as far as like down the road in that area — in that region.
Operator: Our next question comes from the line of Simeon Siegel with BMO Capital Markets.
Simeon Siegel: I just want to say a quick thank you for your show of support at your Times Square store means a lot. Can you — so any color you can add on to speak to the gross margin drivers into next year would be helpful. And then congrats on the nice growth in the brand level EBIT dollars. Any color on just to think about that growth in general corporate expense dollars that we should think about going forward?
Jen Foyle: On gross margin expansion, we’ve got line of sight into our first half buys. We see tailwinds fill in our initial markup, so benefiting margin on that front. There’s still annualization of a lot of the benefits that we were seeing through expenses and gross margin. So our shipments per order cost per shipment, we’ve got line of sight into the first half still as well see some of those benefits continuing through the expense buckets. We are to rent, delivery, distribution warehousing. We still see benefits that we’re capturing that will have an annualized effect of the next year on top of the expansion and markup that we have at least half the year embedded in our plans at this point.
Jay Schottenstein: Yes. And Mike like we also see like an opportunity like the international part of the business still growing. We see that as a great growth vehicle, too, international Part 2.
Simeon Siegel: Great. And then just the corporate expense dollars?
Jay Schottenstein: Yes. It’s again, just tied to everything else we talked about from a profit improvement perspective. There’s pieces being embedded into our plans as we speak for next year, really across all areas of P&L, just expanded on the gross margin opportunity that still exists, and then corporate expenses that really straddle both gross margin and SG&A., making changes to labor models in the next year, services line items, maintenance line items, the tender being embedded, all the benefits we’re seeing from the work happening as we speak or being embedded in the next year’s plan.
Jay Schottenstein: Yes. Also, Mike, I think — I also think Mike is also saying that he doesn’t see really the SG&A increasing for next year.
Jay Sole: Yes. Great. And then just a quick one. The 12 — how should we think about the right total sales to comp spread for Aerie at this point? It’s only a few points now. I think as we anniversary all that store growth in ’21 and ’22, that comp spread definitely lessons digitalist comp. We’re only opening 25 stores this year. So really, as we get past this year, you only have those 25 in a non-comp base. So it’s maybe a point or 2. It’s probably low single-digit spread.
Operator: Our next question comes from the line of Chris Nardone with Bank of America.
Chris Nardone : Two questions. First, could you clarify how comps are trending quarter-to-date for each brand, specifically. And then as we think about next year, how much do you think operating margins can expand? And is this low single-digit sales growth you mentioned, is that your base case for next year? Or is it more of a point that you can still leverage costs on that level of sales growth?
