Wow, how many eyeballs are on our brands right? Between that, between our influencers, between our store influencers, don’t forget about that, our stores represent our customer, right? So when we go to a store, we see our customers, they’re our employees. And by the way, they spread the good news of our brands, and they see all the work that we’re up to, right, delivering better product, delivering innovation, delivering new store concepts. We haven’t stopped. As a reminder, the gateway, I find this just as a testament to the team. In July, we came up with this idea to put all of our brands near in together in SoHo and see what it means to our company, AEO, Inc. And well, in July, we came up with a concept and low and behold, we have a whole new store design, brand new ideas, innovative innovation at its max.
So again, it’s not just one thing when it comes to delivering sustainable long-term growth and brand power. This is what we’re up to. We believe we were next in show to the #1 brand out there, I’m not going to say, but trust me, it’s a big brand. And top of mind is AEO Inc. And so when we think about our brands that way, we think about the long-term growth, long-term strategies and how we’re going to be one of the most powerful brands in retail. So again, it’s not about just one tactic in marketing, it’s about thinking about the future and how we’re going to be the best in the show.
Mike Mathias: Jen, the other thing I’d add that Jen is with the 25 or so we’re opening this year since ’21, we would have opened 100 very specifically, 150 locations. And that’s obviously part of the strategy too, customer file growth, customer acquisition, those stores are still earlier in the maturity curve we’ll be adding more stores again next year. So everything you’re talking about from a marketing perspective, combined with that brick-and-mortar expansion for the brand. We still have opportunity to expand the store base and it’s just adding to the customer file within, again, brands that play within a pretty sizable addressable market that we only have a small percentage of still.
Corey Tarlowe : Got it. And then just to follow up on that, Mike, on the topic of store openings. Could you provide any color as to how to think about the store fleet as we look ahead? And then just did you also talk about how AUR trended in the quarter? I know you talked about traffic, but we could to get color on AUR trends and then how you think about that throughout the remainder of the year.
Mike Mathias: We hit AUR first. AUR was up in the quarter. We talked about kind of holding on to that AUR position that we’ve been able to grow to over the course of the pandemic, the brand equity we’ve built, we’re not giving back up. It’s part of the gross margin expansion story for sure. Your question on AE store count, we’re still talking about a net 25 closures this year. But we’re coming to the point where that net number will be similar to maybe down. We’re actually continuing to explore repositions in market versus net closures, and we’re seeing healthy results from some of those strategic moves. So again, as part of an AE brand growth strategy, we’ll articulate where we think the fleet is going when we provide more color in spring, but square footage reduction won’t be as significant as it’s been in the last several years as we’ve reset the profitability of the brand.
Operator: Our next question comes from the line of Alex Straton with Morgan Stanley.
Alex Straton : Maybe taking a step back, what part of the profit improvement plan has been the most impactful in your eyes so far? And then how should we think about the next leg. And then secondly, I feel like we haven’t heard your latest thoughts on the Quiet Logistics business in some time. So perhaps if you could provide an update there, that would be great.
Mike Mathias: I think the dates — I mean we’ve been talking about this for about 9 months. We’ve talked about the focus being within the gross margin area. So something like flat margin and mark down the inventory management, but the expenses in gross margin, there were 60 basis points of leverage in the — from those expenses in the third quarter. We’ve leveraged the expenses in gross margin every quarter now this year. We expect to do that going forward. So that to this year’s results, that leverage is a proof point to the work we’re doing. And the fact that’s where the focus has been, we’re driving results there. Give me a high level of confidence in what we’re now landing in our ’24 plans around SG&A and depreciation to drive the same thing.
Jay Schottenstein: Yes. And Mike, on the Quiet part of the question, Quiet has provided us like enormous benefits to our brands and we’re starting to see a flow through like on the gross margins. We’re starting to use it more in our sister company, [indiscernible] will go onto the Quiet platform this year. And we’re also seeing an opportunity to still strengthen our third-party business too.
Alex Straton : Melissa, we have time for one more question.
Operator: Our final question today comes from the line of Janet Kloppenburg with JJK Research.
