American Eagle Outfitters, Inc. (NYSE:AEO) Q3 2019 Earnings Conference Call - Final Transcript
Dec 11, 2019 • 09:00 am ET
Robert L. Madore
balance of the year, we continue to expect roughly 60 Aerie store openings this year. On the overall fleet, we have significant lease flexibility that enables us to exit less desirable locations over time. We've closed approximately 130 underperforming stores since 2015, as we continue to strengthen our fleet. Looking ahead, over half of our leases are up for decision by the end of 2021. Additional store information can be found on Pages 13 through 17 in the investor presentation.
Now looking ahead, the beginning of the holiday season has been softer than expected as challenges in AE apparel business have carried into the fourth quarter. As a result, we expect fourth quarter EPS in the range of $0.34 to $0.36 and comparable sales to be approximately flat to last year. This outlook assumes greater gross margin pressure than in the third quarter, reflecting an increase in promotional activity as we clear through inventory to enter spring with fresh collections. We expect SG&A dollars to be roughly flat to last year and our guidance also reflects an effective tax rate of 20% to 22% for the quarter. Our fourth quarter guidance compares to EPS of $0.43 last year and excludes potential impairment or restructuring charges.
In closing, we have a strong organization with meaningful opportunity ahead. We are extremely encouraged by Aerie's momentum and we are committed to fueling growth for this exciting emerging brand. Despite some near-term challenges, the American Eagle brand is strong, supported by our leading jeans and bottoms businesses. We are taking quick action to strengthen product assortments and improve inventory management, which will position the business for increased success in 2020. We remain focused on improving profit flow-through and delivering return to shareholders.
Thanks. We will now take your questions.