In addition to this, in the second quarter, we optimized our clearance strategy, which we expect to drive approximately $50 million in benefits to gross margin on an annualized basis. Another area of near-term focus is a structural change to optimize our loyalty program with a focus on driving more profitable sales. We’re also working on longer-term benefits in SG&A across all areas. We will keep you updated on what this could contribute to long-term profitability as we solidify those work streams. Moving on to our outlook. Quarter-to-date, product acceptance and overall demand has been very encouraging. Trends through the back-to-school shopping period have been strong with AE positive and Aerie delivering a double-digit comp quarter-to-date.
Yet with significant business still ahead, we’re maintaining a cautious view. For the year, we’re raising our outlook to reflect better-than-expected business performance in the second quarter in addition to improved demand and continued profit recovery in the back half of the year. We expect total revenue to be up low single digits and operating income in the range of $325 million to $350 million. We expect gross margin expansion, reflecting improved freight and product costs, lower markdowns and approximately $25 million in savings tied to early profit improvement initiatives. Based on improvements in trend and profitability, we are accruing a baseline of incentives this year. As a result, we expect full year SG&A to be up in the low double digits with the second half up in the mid-teens.
We expect the 53rd week to contribute 1 point to full year top line growth. We expect third quarter total revenue to be up in the low single digits and operating income in the range of $115 million to $125 million. With that, I’ll open it up for questions.
Q – Jay Sole: Great. Thank you so much .My question is about the intimates business. Jay mentioned that there’s some new momentum in intimates. Jen, I think you mentioned that intimates turned positive with the updated collections. And you said, I think, like you said, Aerie is up double digits third quarter so far. Can you just maybe help us understand like how much momentum you’re seeing in intimates? Maybe elaborate on those comments, give us an idea of where you see that business going. Can you sustain that momentum? And is that – how big of a contributor is that to the improvement in the Aerie comp that you’ve seen so far in Q3 versus Q2?
Jen Foyle: Sure. What I like about the intimates business is, I mean, when we just think about our brand awareness, Jay, Aerie still – the intimates business is roughly an $80 billion industry out there. And Aerie still has only like 50% brand awareness. So we’re still getting this brand out there and becoming famous for intimates. So there’s a lot of runway here, Jay. Look, it was down – there was a down-trending cycle in intimates. And I think the teams did an incredible job mitigating any risk there. But as we look ahead and I mentioned on prior calls, Jay, that we were really up to really innovating in that category and showing up with what she wants now. And I think the teams did an excellent job relaunching SMOOTHEZ and tying it in with an amazing campaign.
We just – it was incredible, Jay. We were down in the meatpacking district. We took over the district. We had girls bringing in their bras and trying on our bras, and it was just the momentum I saw there. So what I can tell you is our head designer, that’s her expertise. We’re double downing there. And Aerie maintained market share, in fact, gained some share in some specific categories tucked in the intimates business. So we’re going to keep at this, Jay. And as I mentioned, we saw excitement in other categories too, apparel, fleece. OFFLINE is not slowing down, Jay. The new store design for OFFLINE and the new stores, we’re seeing nice momentum in malls where we coexist, Aerie and OFFLINE. That’s really exciting. And as we anniversary these new store openings in both brands, we’re starting to see that halo effect happen and that momentum coming to fruition.
