There is a link between these problems and inflation, which has curbed consumer spending and pushed up freight costs for the company, as well as supply chain challenges. However, that pressure seems to have eased a little in the fourth quarter as its inventories rose at a slower pace and its gross margin expanded 150 basis points year-over-year (y-o-y). It was encouraging to see AEO’s gross margin hold steady in Q4 since it is still heavily reliant on markdowns to boost sales and reduce inventories.