Question-and-Answer Session
Operator
(Operator Instructions). And your first question comes from the line of Tom Hayes from Piper Jaffray.
Tom Hayes - Piper Jaffray
Good morning, gentlemen. You had mentioned that the margins were flat when you take into your account that the 20 basis points on the delivery charge. So, I was just wondering if you could give some clarity or thoughts on what the gross margin might look like in the upcoming quarters as you've shown some nice progression over the last couple of quarters?
Manny Perez De La Mesa
Well, Tom, as we indicated last quarter our expectations were that, for this third quarter that just ended our margins would be very close to the same and they were in fact the same.
And for the fourth quarter, we're running up against the tough comps. In the fourth quarter of last year, we had a 270 bps year-on-year improvement. That's a very steep uphill climb. So therefore, my expectations are that our fourth quarter margins would be a little worse than last year's fourth quarter.
But having said that, for the year will still be improvement over 2008. And as you recall 2008, we had a great year in terms of margin improvement. And I also want to color that with the competitive environment. We are obviously and arguably the fourth year of a contraction in the marketplace, especially when you look at new construction. And that's put increasing pressure on our competitors.
So therefore, there are a number of one-off instances that we are confronting on a daily basis and are addressing it as appropriate. So, in this competitive environment to have modest improvement over last year, on top of the significant improvement that we made with the increase in gross margins last year, I think is really very good management on our part.
Tom Hayes - Piper Jaffray
Great. And you had mentioned that you expected $0.01 or so of earnings drag from your recent acquisition. Is it too early to comment on your expectations? What it can contribute next year?
Manny Perez De La Mesa
Sure again as you can well appreciate our business is seasonal, and that $0.01 to $0.02 hit in the fourth quarter is strictly a seasonal hit, as the fourth quarter is the worst quarter on a seasonal basis for our business. But, turning over to next year, as we operate that business, we expect that it will be $0.02 to $0.03 accretive benefit for the year.
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