Operator
Our next question comes from the line of Denise Chai from Bank of America Merrill Lynch. Please go ahead with your question.
Denise Chai, Bank of America Merrill Lynch
Thank you for taking my question. We talked about this negative sales mix shift at elfa. Do you see this as one-off or continuing or is there actually any way to predict this?
Jodi Taylor, CFO, The Container Store
I did say it is a little tough to predict but it is not that significant to the results normally. Remember that third quarter for them, Denise, is their largest quarter because they are manufacturer. That is when their sales are generated as they are shipping to their retail accounts, their wholesale accounts in advance of their holidays, and in our case the elfa sale. Normally it’s really not much of a discussion and certainly something that has not been anything we tried to talk about much.
Denise Chai, Bank of America Merrill Lynch
Okay. You also mentioned in terms of the outlook that in the fourth quarter SG&A would improve a lot year-on-year. Just wondering besides comp leverage, the release mentions disciplined expense management. Are there any particular initiatives in place?
Jodi Taylor, CFO, The Container Store
On the expenses, we always are very, very active and on top of managing our variable costs to whatever the current sales trends are. We have proven through our history we were adept at doing that and we’ll continue to do that through fourth quarter. We certainly always look in any quarter at opportunities for any sort of evaluation of discretionary spending trends depending again upon the trend. In fourth quarter, we no longer have the public company costs during both periods, so that is no longer the discussion like it was this quarter and last quarters where it is been about a 30 basis point drag. Yes, I think that overall it is a combination of improved trends in sales and tight management of our costs.
Denise Chai, Bank of America Merrill Lynch
Okay, thanks. Just one more. As Contained Home and TCS Closets grow and become more material, should we expect the gross margin to be impacted either positively or negatively?
Jodi Taylor, CFO, The Container Store
Contained Home and TCS Closets, we are not suggesting that those will have an impact to our margin one direction or another at this juncture.
Denise Chai, Bank of America Merrill Lynch
If they grow, though — just how do their margins fit relative to the house?
Jodi Taylor, CFO, The Container Store
Relatively similar.
Denise Chai, Bank of America Merrill Lynch
Okay, great. Thank you.
Operator
Thank you. Ladies and gentlemen, that is all the time we have for questions for today. I would like to turn the floor back over to management for closing remarks.
Kip Tindell, CEO and Chairman, The Container Store
We want to thank you again for joining us today and look forward to updating you in April on our fourth quarter results. Thank you very much.
Melissa Reiff, President, COO and Director, The Container Store
Thank you. Bye.
Operator
Thank you, ladies and gentlemen. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.