Please note, this event is being recorded. I would now like to turn the conference over to Alexis Tragos, Vice President of Corporate Communications. Please go ahead. Good afternoon, everyone. Joining me today for our prepared remarks are Jay Schottenstein, Executive Chairman and Chief Executive Officer, Jen Foyle, President, Executive Creative Director for American Eagle and Aerie, Ravi Thanawala, Chief Financial Officer, and Mike Mathias, Strategic Advisor. Before we begin today's call, I need to remind you that we will make certain forward-looking statements. These statements are based upon information that represents the company's current expectations or beliefs. The results actually realized may differ materially based on risk factors included in our SEC filings. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. You can find our second quarter investor presentation on our corporate website at www.aeo-inc.com in the investor relations section. Now, I'll turn the call over to Jay. Thanks, Alexis, and good afternoon, everyone. The second quarter represented another important step forward for AEO. We built on the strength of our portfolio, making progress at American Eagle, while Aerie continued to deliver outstanding performance. The second quarter came in at the high end of our expectations, with revenue of $1.4 billion and comparable sale growth of 6%. Operating income of $211 million included a net tariff refund benefit of approximately $161 million. We remain focused on driving stronger profitability across the business, and these results underscore the strength and relevance of our brands and the progress against our priorities. At Aerie, which includes OFFLINE, momentum continued. Aerie delivered revenue of 25% total growth and comparable sales grew 19%, reflecting the broad-based demand across categories and channels. We remain confident in the long-term opportunity for Aerie and our ability to reach new customers. Turning to American Eagle, total revenue grew 1% with comps declining 1%, an improvement from the first quarter. AE Men's posted its fourth consecutive quarter positive comps, seeing continued traction and relevance. We are moving in the right direction, yet there remains work to do. Our progress is fueled by our people. I'd like to extend my gratitude to our associates for their relentless dedication and commitment to our brands and customers. Before I turn it over to Ravi, I want to take a moment to thank Mike for his many years of service to AEO. Mike has been, and will continue to be, a trusted partner to me, and I'm grateful for his leadership, his commitment, and the many contributions he has made to our business over the years. I'm also very pleased to welcome Ravi to the team. He brings comprehensive financial and operating expertise, a fresh perspective, and a deep understanding of what drives long-term shareholder value. As we look at the opportunities ahead, I am excited about the breadth of our experience and judgment he brings to the team as we work together to make AEO a stronger, more productive business over time. Now, I will turn the call over to Ravi. Thank you, Jay. I am excited to step into the CFO role. I have been at AEO for just a few weeks, so I am spending a great deal of time listening, learning, and getting to know the business and our teams. What attracted me to AEO was the strength of its brands, the connection to its customers, and the opportunity I see to create meaningful long-term value for shareholders. I will be focused on driving durable value creation by connecting brand growth with disciplined execution, stronger profitability, and the thoughtful allocation of resources. Those are the areas where I am spending time on with Jay and the leadership team as I get deeper into the business. It is still early, and I want to be thoughtful about drawing conclusions. However, I am excited by the opportunity I see at AEO and look forward to sharing more about my perspective and priorities over time. I also wanted to thank Mike and the entire finance team for the support they have given me through this transition. Mike has been extremely generous with his time and his knowledge of AEO, and I am grateful to have the benefit of his experience and perspective. Given how recently I joined the company, Mike will be taking you through the details of the second quarter results and the outlook. I have spent considerable time with Mike and the team reviewing the outlook and the assumptions supporting it. I am comfortable with the company's expectations for the balance of the year. Now, I would like to turn the call over to Jen. Thank you, Ravi, and good afternoon, everyone. Before I get into the brand details, I wanted to share my appreciation to our entire organization. Their passion for our brands, our products, and our customers shows up every day, and I am proud of the work they are doing. Aerie and OFFLINE delivered another outstanding quarter, with broad strength across the business and tremendous response from our customers. At American Eagle, we made progress from the first quarter with continued strength in men's. There is still work to do, yet I am encouraged by the opportunity ahead. Turning first to Aerie and OFFLINE, we delivered another exceptional quarter. Comparable sales increased 19% and total revenue grew 25% to $536 million. What I am most excited about is the breadth and quality of that growth. We saw strength across channels and categories with growth in core apparel, intimates, and activewear. There was a consistent demand in Aerie apparel and tees, tanks, fleece, and bottoms. Head-to-toe outfitting, curated monthly drops, sleep-to-street, and wear-now fabrications resonated with our customers. Mix and match, summer brights, stripes, and a little leopard all worked. We are also pleased with continued growth in OFFLINE's Cloud Fleece franchise, sports bras, and incredibly strong results across bottoms. I love seeing this breadth because it tells us the customer is responding to the complete lifestyle offering, not just one category or one trend. Our core intimates business also remained strong throughout the quarter. We continue to win with what Aerie has stood for from the beginning, real comfort. Customers responded to our focus on fabrication and the 20 years of Happy Booties anniversary campaign. In July, we also introduced our new Float bra collection. Designed for a weightless feel, Float complements our structured bra franchise and gives customers a new way to experience Aerie's signature comfort. Our customer base continues to grow. We are expanding the Aerie community and deepening their engagement with us. Our Aerie Realmakers continue to be an important part of that connection. Across the quarter, we nearly doubled the size of the Advocate program and found fresh new ways to bring new customers to the brand and engage them. As we move into the third quarter, we are doing something I love to see. We are comping the comp. We are sustaining growth against increasingly strong comparisons and seeing strength across categories while continuing to expand our customer base. Now turning to American Eagle. We are seeing steady traction as we actively work to refine our strategies. We delivered sequential improvement from the first quarter, yet there is opportunity to build on our progress and further accelerate our performance. Men's continues to deliver as we posted our fourth consecutive quarter of positive comps. Growth was driven by strength across all bottoms categories, with tops continuing to meet our expectations. This demonstrates that our focus and strategies to restore top-line growth in the AE men's business is paying off. In women's, customers responded well to our focus on outfitting, particularly pairing tiny tops with oversized bottoms. We leaned into the cargo trend, and fashion bottoms performed positively. In women's denim, new fashion fits, including wide leg, straight, and low rise, gained strong acceptance. Moving forward, we recognize where there is still opportunity to restore consistent growth across categories. AE's brand awareness and cultural significance remains strong, and the active customer file continues to grow. Our marketing strategies are built on multiple touchpoints, tapping into differing interests, rituals, and experiences. We have strategically invested in our presence at the mall as a place to shop, gather, and connect, on campus with our sorority partners to own a stake in rush talk, and in sports on the biggest stage of the year with global brand ambassador, Lamine Yamal. We spent the last four quarters investing in brand awareness to drive purchase consideration, and now we are shifting our marketing dollars into conversion-driving tactics. Ultimately, this is about showing up for our customers during their biggest moments, building their wardrobes while building our community. In looking ahead to the second half of this year, our strategic priorities across AEO are clear: deliver best-in-class products, maintain our investment in marketing tactics that drive conversion, remain focused on our inventory management, and improve margin health. We are also making strategic investments in product and marketing as we build towards AEO's 50th anniversary in 2027. We enter the third quarter with momentum in Aerie and OFFLINE, a game plan to make clear improvements in American Eagle, and a highly engaged customer community across all brands. I am excited about what the brands can accomplish together. Aerie's consistent growth, the opportunity we see in OFFLINE, and American Eagle's deep customer relationships give us multiple ways to serve our customers across more categories, occasions, and moments in their lives. Each brand has its own identity and distinct opportunities. Together, they give AEO a springboard to grow. We have talented teams across our stores, distribution centers, and corporate offices bringing these brands to life every day, and I have tremendous confidence in what we can achieve together. Thank you, all of our associates, for all of your hard work. With that, I will turn the call over to Mike. Thanks, Jen, and good afternoon, everyone. Driven by strong momentum across Aerie, our second quarter revenue and operating income hit the top end of our guidance. As you heard from Jay and Jen, we are zeroed in on opportunities for the AE brand and are continuing to fuel Aerie's exceptional growth. I am going to take you through the financial results, including the impact of the tariff refunds recognized in the quarter, and then discuss our outlook for the balance of the year. All reported results include the impact of tariff refunds. Second quarter consolidated revenue of $1.4 billion increased 8% to last year, with comparable sales growing 6%. Aerie's strong business continued with total sales growing by 25% and comparable sales up 19%, with growth across channels. AE total sales increased 1%, with comparable sales declining 1%. Gross profit dollars of $672 million rose 34% from last year, and gross margin of 48.7% increased 980 basis points. Included in gross profit this year is a net benefit of $179 million related to tariff refunds, which drove 1,300 basis points of the gross margin expansion. Merchandise margins deleveraged 330 basis points with improvement in Aerie, offset by markdowns in AE, as we previously guided to for the second quarter. SG&A dollars increased 19% and 290 basis points to a rate of 29.6%, inclusive of $18 million of incentive expense attributable to tariff refunds. The remaining increase is primarily a result of planned investments in advertising. Depreciation decreased slightly year-over-year at $52 million, compared to $55 million last year. We recorded a second quarter operating profit of $211 million, compared to $103 million last year. Included in operating profit this year is a net benefit of $161 million related to tariff refunds. Interest expense increased primarily due to the sale of tariff claims as discussed last quarter. Other income increased due to unrealized gain on equity method investments. The second quarter tax rate was approximately 25%, and EPS was $0.79. Consolidated inventory cost was up 14%, with units up 9%. The increase in cost includes the impact of incremental tariffs this year. Unit inventory plans will continue to be rebalanced between brands and categories for the remainder of the year. in the second quarter, as Jay noted, we continue to make long-term investments in our business while returning cash to shareholders. Second quarter CapEx totaled $66 million, and the company returned $21 million to shareholders during the quarter via the quarterly dividend. We ended the quarter with approximately $148 million in cash and investments and $783 million of total liquidity, including our revolver. Before turning to our outlook, I want to note that Ravi has been engaged with the team in reviewing our plans and expectations for the balance of the year. The outlook I will discuss today reflects the company's current expectations. For the third quarter, we expect comparable sales growth in the mid to high single digits, with Aerie and OFFLINE continuing in the high teens to 20% range and American Eagle approximately flat. Gross margin is expected to be similar to last year, with full year gross margin up year-over-year. Operating income for the third quarter is expected to be in the range of $110 million- $115 million, with SG&A expense up in the high single digits. The tariff rate assumption for the rest of the year reflects the Section 301 tariff implemented in late June. For the full year, we expect operating income in the range of $540 million- $550 million based on consolidated comparable sales growth in the mid single digits. In closing, we are committed to building on the momentum in Aerie and OFFLINE, accelerating improvement at American Eagle, and unlocking greater profitability across the business. With that, we will open it up for questions. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Please limit yourselves to one question. At this time, we will pause momentarily to assemble our roster. The first question is from Jay Sole with UBS. Please go ahead. Great. Thank you so much. Jen, I want to ask you about the women's denim business at American Eagle. Can you just maybe dive into that a little bit more? Tell us about how that business developed over the quarter, what you see happening in Q3, just from a sales standpoint into what's driving that and the opportunity for continued progress from here. Also maybe, the second part to that question is you talked a little bit about third quarter. I think you said you've seen trends continue. If you can sort of clarify that a little bit. Where do you see Aerie so far in Q3, and how is that factoring into your guidance? Same question for both brands. Thank you. Thanks. Look, we're seeing sequential improvement in denim. Sorry, I have a little bit of a cold. We are seeing sequential improvement. As I mentioned in my last earnings call, we definitely need to pivot. We needed to pivot, and we pivoted quite nicely into the fits that were working 100%. Really, it was low rise that we really wanted to get into that business. As you saw, that was our marketing launch for back to school. Really excited about how we repositioned denim. What we are needing to work through right now is just some of the older fits and really just rebalancing our inventory. It's as simple as that. Our numbers reflect the guide in AE. As we look to Aerie, we continue to launch new ideas in Aerie. All categories are working. All categories are firing. We can't ask for more. I love what I said. We're proving we can comp the comp, and I think the team's really geared up for holiday. We're seeing nice continuation of the sales comp, again, reflected in the guide. With all our new launches, we relaunched our booty campaign, our undies campaign. Intimates is gaining share. Our Float bra launch, we're going to really work on bra innovation. That's a new playbook for us. We're going to reinvigorate it because we're excited about some new ideas in bras. I think we're really going to compete on that end with really launching ideas that I think our customers are going to really embrace. Some new ideas that are coming your way, and that will build into next year. Then, of course, apparel. Apparel has been Really on fire. The numbers are incredible, and they like completing the outfit. We're building them from inside out, and that's what we do in Aerie, and OFFLINE certainly has seen incredible growth as well. Got it. Okay. Thank you so much. The next question is from Matthew Boss with JP Morgan. Please go ahead. Thanks. It is Amanda Douglas on for Matt. Jen, could you speak to the difference in merchandise margin performance within the quarter with improvement at Aerie offset by the American Eagle brand? What are you specifically seeing on markdowns by brand entering back to school? Sure. We have seen a little pressure, as Mike mentioned, on seasonal ideas in AE, so we continue to see a little of that pressure as we go into Q3. We are working through that, again, right-sizing our inventory. Aerie has been doing an outstanding job leveraging this customer base that is growing our brand awareness. That is another thing that I did not mention in my last answer, the brand awareness in Aerie, we are still only at 59%, albeit it is growing. There is still a lot of opportunity for runway in Aerie. Pivoting back, as we think about the promotional cadence, Aerie has done a really nice job balancing out their promotions. Leveraging the newness. They have been doing new drops, and we have been easily able to reconstruct the promotion activity between brands so that we are balancing this out. Yeah. The next question is from Kelly Crago with BMO Capital Markets. Please go ahead. Hi, guys. Thanks for taking our question here. Just wanted to dig in a little bit further on the third quarter comp guide of mid to high. If you could just break out expectations by brand, and any color, again, more explicitly about what you are seeing quarter to date, at the two banners. I think you are speaking to some maybe higher promos at American Eagle than you were anticipating, and how that might impact the margins in the third quarter. Thanks. Hey, Kelly, I can take that. I think Jen mentioned in her prior answer that comp guidance by brand is in line with where we are quarter to date, so American Eagle relatively flat. So some sequential improvement from what we just reported for Q2. Aerie in the high teens to 20%, again, similar to what we just reported in Q2. So the trend continues there, and also, as Jen said, that means comping the comp and actually maintaining comp trend against tougher compares, which is what the team has been going after. So we have a good proof point here quarter to date in Aerie on that front. Yes, the merch margin performance in Q2 and some of the markdowns in American Eagle that we guided to back in May, alongside our $45 million-$50 million guidance, those did come through in line with expectations, and then resulting in us hitting that high end of our op income guide. For Q3, we do have, as Jen said, as we are definitely still looking to rebalance some inventory. We have some markdowns in the Q3 merch margin guide for American Eagle, some potential markdowns as we go through that work. That is covered in our gross margin guide of relatively flat for the third quarter, and Aerie is continuing its nice performance there on the merch margin line. So again, a little bit of a mixed brand output where Aerie is maintaining strength in margin. AE's definitely getting back to some strength, but we do have a little bit of markdown coverage for some of this inventory work that still needed to be done. Got it. Just so I'm understanding, with the tariff refund, I noticed you said something about like you're accruing some higher incentive comps here. Can you just walk through how that plays out in the high single digit, as she may guide, I think is for 3Q. Apologies if I'm missing some of the details here. Is that related to the higher incentive comp, marketing, anything else there? How does this sort of play on the fourth quarter as well? Thanks. That's all I got. Sure. Yes, we did book in the second quarter against tariff refunds, some incentive comp commensurate with the refund in line with our full year income targets tied to those incentive plans. The accrual for the back half, third and fourth quarter, I think I've guided to it now back in March and then again in May, that elevated accrual is up against more because it's up against a lower than historical result last year. This path we're on in terms of that accrual is kind of more average or more historical. There's no impact in the third and fourth quarter to anything tied to refunds. That was just isolated against the refund benefit that we saw in the second quarter, any kind of incremental number. The back half, SG&A, we guided third quarter up high single. That includes, again, the impact of that more historical or average incentive accrual versus a lower accrual than history last year. With the rest of the line, our advertising, relatively in line to the rate of sale in the third quarter, some leverage in the fourth quarter. As we pass through, look at SG&A on a go-forward on 12-month basis. Advertising, we're lapping this elevated spend. As of this quarter, as we look forward on a go-forward basis, advertising will be a leverage line item into 2027. As we normally get past these next couple of quarters of a bit of an apples and oranges incentive accrual impact, that will also be a leverage line item as we go into 2027. As we look at a 12-month basis and for the full fiscal 2027 period, we're looking to be back to a position where we're leveraging SG&A. At a minimum, at a mid-single-digit comp, but targeting a low to mid-single in total. The team and Ravi will provide more color on that go forward, and specifically when we give guidance for 2027 in March as usual. Got it. Thanks. Best of luck. The next question is from John Keefer with Goldman Sachs. Please go ahead. Hey, good afternoon. Thank you, guys. You guys gave color about American Eagle and mentioned that men sounded good across the board. Women's bottoms sounded good from what I heard. I'm just wondering what drove the negative comp, and then I have a follow-up. Women's bottoms has made improvements. Why we still mix the business, actually other bottoms, that means pants, cargos, for instance, have done exceptionally well. There is still some balance to do in denim. We are excited about the momentum in denim and what we have seen headed into Q3. We are excited about that. Got it. You guys mentioned in your inventory comments, some rebalancing going to take place and some continued promo activity extending into 3Q a little bit. I am wondering, is that entirely overhang from the 1Q inventory in women's bottoms, or was there also a little bit of overhang from 2Q that is moving now through 3Q? It is primarily concentrated on some seasonal businesses, shorts being the number one. There is some fashion that we need to ensure that we are clearing. All right. Great. Thank you, guys. The next question is from Dana Telsey with Telsey Advisory Group. Please go ahead. Hi, good afternoon, everyone. As you think about the later back-to-school time period, any assessment of if that had any impact on sales in either of the businesses? As you think about stores versus online, how is the performance for each business, and then the metrics, traffic, conversion in stores versus online, and how the remodels are performing. Thank you. Thanks, Dana. I think with us reporting today, we are through the full Labor Day period and Labor Day shift. So it is a good sense of where we are quarter to date accounting for those shifts. We are past really all the peak back-to-school periods, too, even though there were shifts within August and shifts here in early September. For the most part, we have got line of sight to those. Again, the guidance by brand and in total, mid to high single-digit comp for the quarter, and the guidance by brand is commensurate with that quarter-date trend. At this point, we have seen, for the most part, any kind of impact from shifts. Stores versus online business, I will start with Aerie. Aerie is positive across the board. I think I used the description last quarter that all the conditional formatting is green. That is still the case that we are seeing here quarter to date, stores, digital, traffic in both channels, AUR, UPT, AOV, customer talents, you name it, all going in the right direction with strength across channels, strength across categories, strength across metrics. AE at a flattish result with guidance. Stores are definitely on the lower side of that, and digital is stronger. So that is what we have seen for a few quarters now. Seeing that quarter to date here still in Q3. Stores have gotten better. So, against the negative one comp in Q2, what we see in quarter to date here in Q3 is stores coming back stronger. We tend to see that during these peak periods. We are a destination in the mall during back-to-school and holiday. We will see how that plays out the rest of this quarter. A little more rebalancing between channels versus what we saw in the second quarter, but stores still on the lower side of the average. The next question is from Jonna Kim with TD Cowen. Please go ahead. Thank you for taking our question. Jen, just on the Aerie side for the holidays, I know you had very strong holiday last year with pajamas and other key items. How are you just thinking about the product assortment this year? Then especially on the American Eagle side, is there anything that you're doing differently also around the holiday season? Thank you. Yeah. In both brands, we're very excited about. Honestly, the brand health for both brands has been extremely positive. Let's start with that. What we're working on the American Eagle side is really converting those customers and entertaining them, and we're very focused on getting them to stores. This is when we really gear up. I do think long legs are going to build into Q3 and into Q4. With American Eagle, that should be hopefully positive and some optimism there. Again, still eight weeks to go in this quarter, but we're not into full long legs yet either. I think we have some opportunity there. The key items that the teams have worked through, the new ideas, all of our fun ideas that we do during the holiday season in both brands, I think we're really going to excite the customer there. Color, optimism, fun. Aerie is going to continue to do its drops as well as American Eagle. All the newness drops have been working. It is new ways to reengage our customers and get them into the stores, and I think we have a lot brewing for the holiday season. Just one more follow-up, Jen, on the Aerie side. Any color on how intimates perform and how you feel about the assortment there? Very nicely. We are excited what we are seeing in intimates. There was some market share gain, and we are really focused on newness in bras as we move forward. Sports bras have been working well, other bras. We really want to gain credit for all the innovation we do in our core bras, and I think there will be a lot of work and some new innovation that you will see on the go forward. Keeping in mind as we head into Q4, we definitely dive into other categories as well. It is a gift-giving season, and I think Aerie does it best. All right. Thank you. The next question is from Adrienne Yih with Barclays. Please go ahead. Hi, this is Angus Kelleher-Ferguson on for Adrienne Yih. Jen, you mentioned Aerie brand awareness is still around 59%, despite the strong growth. What's the marketing plan to close that awareness gap, and how much of the incremental ad spend in the back half is targeted at that versus performance/conversion marketing? Thank you. We're not going to really disclose our ad spend contribution. However, if I looked at AE's brand awareness, which is roughly 76%, look at that gap right there and think about the concept Aerie is able to drive. I'm pretty excited about the opportunity there. Our goal is to get it at least equal, if not exceed, the brand awareness that we see in our portfolio. What I will say, the teams are up to everything. From in-store events to our double down on digital spend, which I think has been really optimized. Connecting with our customers, building on our Aerie Realmakers, building on our advocacy program. We're firing on all cylinders, and the customer and the community is really responding. This is where the magic happens in Aerie. This community that we're able to build and retain and add the spend. Our spend is up per customer, double digits in line with these numbers that you're seeing. It's our secret sauce, so we don't share that. But, I think the team knows how to deliver on this. Great. Thank you. Just a quick clarifier for Mike and Ravi. Buying and occupancy or B&O. They leveraged about 150 basis points last quarter, but were roughly flat this quarter. I am curious if there is anything to call out there regarding distribution costs, occupancy or anything else like that. Is that leverage plan to come back in the back half? Thank you. I think for the second, what you would expect in the third and fourth quarter would be similar to second quarter. First quarter, there was a little bit of shift between things with the disposition or the wind down of our Quiet Logistics third-party logistics business. So the B&O line, I would expect from here to have a similar result from a leverage perspective that we saw here in the second quarter. With more work to come. Great. Thanks. Teams are constantly, there is rent delivery, distribution costs that are in that bucket of expenses. There are cross-functional teams still in place working on all those line items that we have, since our expense initiative a few years ago, and that is still in place. That helps a lot. Best of luck. Thank you. The next question is from Rick Patel with Raymond James. Please go ahead. Thank you. Good afternoon. Can you unpack your expectations for gross margins a little further? How do we think about the puts and takes in Q3 and if that differs from your Q4 plans? I know that inventory cleanup is ongoing, so curious if that's done with in Q3, or if that's something that spills over into Q4. Yeah, I'll provide some additional detail there. I think in general, we're looking for Aerie's continued strong performance on the merch margin line to continue. AE, again, definite improvement from the first half of the year. Some placeholder markdowns, to cover us as we work through some of this inventory balancing. I just hit the B&O line item. Similar expectations in the third and fourth quarter as the second quarter, kind of been relatively in line to last year as a rate. I think the other moving parts, we do have some hedge in there, I'll call it, or the potential for some freight fuel surcharge impact, so we believe we're covered there. We don't know for sure exactly where things are going. Oil's over $100 a barrel again. We want to make sure we're covered there. Not surprised by anything, nothing significant to date. The potential for that to happen is covered. From a tariff impact perspective, Q3 will be kind of a negligible difference to last year. Again, with these, the rates in place just announced in June, versus kind of a partial quarter impact last year. The dollar difference is pretty negligible in the third quarter. At that 12.5 rate for fourth quarter up against kind of full IEEPA tariffs, could be a little upside, but we know that there's still kind of analysis and studies being done, potential for some increase to those tariffs in the fourth quarter. Some impact to the fourth quarter. If it doesn't happen, could be some upside there. Gross margin in general, all those ins and outs, relatively flat for the third quarter. Modest improvement in the fourth quarter in the guide. Thanks very much. The next question is from Alex Straton with Morgan Stanley. Please go ahead. Perfect. Thanks so much. Maybe for Ravi and Mike, if our math is right, at refunds, it just looks like you are trimming the full year EBIT guidance just slightly compared to last quarter. Similar to the follow-up to the last question, I am just trying to understand, is that just higher incentive accrual, or has your view on other pieces of SG&A or gross margin changed at all? No, you are right, Alex. The math would say we are trimming the back half guide a bit from where we were back in May. I would say the number one driver of that, if you remember the color, our expectation was American Eagle to be up low single-digit positive. We are giving flat guidance for the balance of the year, so that is a piece of it. A little bit of markdown placeholder, as we have described, alongside that reduction to revenue expectations. Flip side of that, at least for the third quarter, Aerie at a high 18%-20% is ahead of where we thought, but the mix of that is still taking a little bit off the income line based on the mix of that comp performance between brands. The SG&A line is not much different. We talked kind of in line with sales, mid to high single. A few million dollars there that we are still working on, but not a big driver of the guidance trim. In fourth quarter, it is similar. Essentially, we are guiding American Eagle to flat. Actually, fourth quarter, our prior guidance was American Eagle still low single positive for the back half in total, which meant fourth quarter as well. American Eagle is flat, and we are looking at Aerie more in the high single to low double range, which is the same place we thought. So the trim in both quarters is really this American Eagle brand flat expectation versus up low single, and a little bit of markdown placeholder against that. In total, the third quarter guide implies similar income result to last year, so much improved from the first half of the year with work to do. Fourth quarter implies some operating rate improvement and mid to high single digit income increase. Again, 12-month basis go forward, making progress here in the back half, even with a little bit of a reduction to guide, but positioned and positioning things in general across gross margin and SG&A plans to be back to revenue outpacing expense, op inc growth outpacing revenue growth, and operating leverage again now that as we get into the back half into holiday and into next year, we are past tariff impact for the most part, even though there will be some in and out there, but mostly absorbed at this point. SG&A structured to leverage, like I said, at a low to mid single digit level in the next year. So we are confident that as we get into the holiday period and then into next year, that we will be back to income outpacing revenue growth and some operating rate improvement on a 12-month forward basis. That's super helpful. Maybe just on AE as a quick follow-up, after it gets to that maybe flat level in the back half, how do you think about the return to positive, and what KPIs do you care most about as you're monitoring that trajectory? I think traffic's a big one. I think Jen can weigh in here, too, but I think, look, you start with the mix of product strategies first. I think the team feels good about where things are going forward. We want to build on the sequential improvement we've seen quarter-over-quarter here. We're giving a flat guide based on quarter date performance in Q3. We're playing that forward into holiday. I think the team hopes to exceed that expectation through the balance of this year. Plans in place next year to comp negative results. But being prudent about how we plan that, and this inventory work is making sure we're not getting out over our skis in terms of inventory against a comp expectation for the first half next year, even though we're up against negative. We want to make sure we're positioned to chase trend and not get too ahead of things there. I think the intention go forward is for American Eagle on the metrics side, be driven by product strategies first. I think the marketing rebalancing we've been talking about, the third quarter here is our first pass at rebalancing that spend toward what was kind of top-of-funnel consideration, brand awareness to definite conversion driving, purchase behavior type spend on the digital marketing, performance marketing, away from bigger campaigns and top of funnel, and we're seeing some traction there with the sequential improvement we've seen so far quarter to date. Teams are building upon that into holiday and into next year as well. I think traffic in stores and conversion against that traffic are definite focuses alongside product strategies go forward. Thanks so much. Good luck. The final question today will come from Marni Shapiro with The Retail Tracker. Please go ahead. Hey, guys. Thanks, and congrats on Aerie. It was really stunning to see it in every single haul for back to school. I wanted to actually talk a little bit about Aerie. You are focusing on the bras, and I love that, and I thought the Float was a great launch. I am curious about also the Show Off and that collection, which feels a little sexier than what I am used to seeing from Aerie. I like it, and you also had a couple of sheer bras that were always towards the front of the store and seemed to always be selling out. I am curious if this is a shift for Aerie, and you think that there is room for you guys to compete there. I think there is. I am also curious if you are seeing that your customer is buying the match back set. The matching stripe bralette with the matching boy short, and the matching stripe sweatshirt to go with it, and is that helping to drive up basket? You are fully outfitting her now. Marni, I think you could have taken this call for me. All of the above. That was perfectly said. Really, all bras are working. We are going to really look to build out each franchise and find new ways to navigate bras. That is what we are up to right now. We do see these sets selling. We love how they go back to the apparel. You will see more of each category and probably some naming and claiming down the road. We have some excitement as we head into the back half, and we go into really spring and really into back to school with some even We have plans, let me just say, all the way through. We are already planning how we are going to try to comp next back to school, and we are going to do that with some of these ideas. Excited what the teams are delivering as far as innovation, novelty, laces, new laces. They are doing an excellent job. Yes, this match back is definitely an opportunity. Is the sexier look an intentional look, is it something that you can carry over to American Eagle without getting away from the core DNA of the brand? Absolutely, but we have to do sexy in our way. Yeah. I think we do it in a different way, I think it is relevant, but I think there are ways to do it that can be cool and understandable for our customer base. Fantastic. Thank you, guys. Thank you, Marni. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.