Now, I would like to turn to our outlook. After incorporating third quarter actual results and considering the recent strengthening of the U.S. dollar, we expect consolidated net sales for the year to be $785 million to $795 million, comparable store sales to be at flat to down slightly, and diluted net income per share to be in the $0.52 to $0.55 range based on a weighted average of 49 million diluted shares outstanding. We expect our tax rate for the full fiscal year 2014 on a GAAP basis to be 31% or 41% on an adjusted basis after excluding one-time gains on the sale of an elfa subsidiary and building as well as the nonrecurring tax benefit this year. We continue to expect our annual interest expense at today’s LIBOR rates to be approximately $17.5 million.
Now, I would like to provide some more color on our implied fourth quarter guidance. One, first on sales, given our reported quarter to date sales performance and the recent strengthening of the U.S. dollar which hurts the conversion of elfa’s revenues, our full year sales outlook now assumes fourth quarter comp to be up in the low single digit range driven by the expected impact of our planned initiatives as well as cycling the difficult fourth quarter weather from the prior year, and implied fourth quarter sales of $227 million to $237 million.
Second, on gross margin, we expect slight gross margin improvement at The Container Store due to the strengthening dollar with a portion of this improvement to be offset by expected decline at elfa due to sales mix. Third, we continue to expect SG&A to improve significantly at the percentage of sales year-over-year in the fourth quarter. Fourth, we are therefore narrowing our previously issued EPS range for fiscal 2014 to $0.41 to $0.44, which implies fourth quarter adjusted EPS of $0.31 to $0.34.
With that, I would like to turn the call back over to the operator so that we can take your questions.
Question and Answer Session:
Operator
(Operator Instructions). Our first question comes from the line of Chris Horvers with JP Morgan. Please go ahead with your question.
Chris Horvers, JP Morgan
Thanks, good afternoon. How are you doing? First of question on 3Q sales and then I’ll follow-up with a question on 4Q sales. You reported third quarter pretty solidly through it. You reported second quarter pretty solidly through the third quarter and gave guidance. I was curious, what deviated from your expectations in sales? What happened in the last month of the quarter? Was it something that happened in the mix? Then I’m focusing on the TCS segment, of course? Thank you.
Jodi Taylor, CFO, The Container Store
Chris, this is Jodi. We do not disclose the specifics of our comps by month throughout the quarter. However, we did as you know report that our fourth quarter to date comp store sales are up 2.7%, and our elfa sale has started out well. We certainly reflected that in our guidance that we provided to you today.
Chris Horvers, JP Morgan
Yes, I was asking more about the third quarter coming at the low end of the range that you provided. What deviated from your expectations in the third quarter?
Jodi Taylor, CFO, The Container Store
Really the quarter certainly did not progress as we hoped. We did hope that it would be not at the lowest end of our range but certainly it was a little more challenging on the traffic side than we had originally envisioned.
Chris Horvers, JP Morgan
Okay. Then a little bit on what you just touched on with the fourth quarter to date. Can you reflect on the last year? Obviously, elfa starts December 26 and you extended it towards the end of February last year. Was the impact of the weather on the elfa sale more acute in the January-February timeframe in any sense and perhaps, how much you made up at the end when you extended the sale?
Jodi Taylor, CFO, The Container Store
Chris, I know you will remember this. Last year, we extended the sale really because of the historic weather trends and really did that just to give our customers an opportunity to get into the store and be able to make those purchases that they had not been able to make during the sale.