Question-and-Answer Session
Operator
(Operator Instructions) Your first question is coming from Neely Tamminga from Piper Jaffray.
Neely Tamminga - Piper Jaffray
Good morning and congratulations to you guys on this guidance. I just want to get a sense here with respect to Q3 and Q4, as you are talking about more opportunity in gross margin for Q4, just wondering in the past, your balance of earnings has really come a little bit more in Q3 versus Q4. Just wondering how we should look at the two quarters as it relates to your opportunity from an earnings perspective. That would be helpful.
Edward L. Larsen
Well, I mentioned that we would have a strong improvement in gross margin for the fall season, around 700 basis points. We really see that improving even more than that in the fourth quarter. The breakout would be about 500 basis points in the third quarter and about 900 basis points in the fourth quarter. And by going to our monthly markdowns now, it spreads out those earnings. So the fourth quarter will be a stronger earnings performance than the third quarter.
Operator
Thank you. Your next question is coming from Adrienne Tennant with Friedman, Billings.
Adrienne Tennant - Friedman, Billings, Ramsey
So my question is on the line of credit, can you give us the same guidance that you had given at the end of the third quarter? I think you had thought that maybe it would be about $100 million, what that might be.
And then the next one is really just a clarifying question -- the $0.47 to $0.52, that is ongoing operations including restructuring, is that correct?
Edward L. Larsen
That’s correct. Could you repeat your first question? I wasn’t clear what that was.
Adrienne Tennant - Friedman, Billings, Ramsey
The line of credit at the end of the third quarter, but I just have a curious question on the Q2 -- should we be using for our models a loss of 39 rather than a loss of 34 to match the $0.47 to $0.52?
Edward L. Larsen
That’s correct, $0.39 would be consistent with the $0.47 to $0.52 guidance.
Adrienne Tennant - Friedman, Billings, Ramsey
And $0.14 in Q1?
Edward L. Larsen
That’s correct, yes.
Adrienne Tennant - Friedman, Billings, Ramsey
Okay, great. That’s perfect.
Edward L. Larsen
And our forecast for the third quarter outstanding debt would be around $75 million. That is lower than the prior guidance because we are not buying the J. Jill receivables, so we have plenty of room in our capacity, which is 215. And the third quarter should be our peak borrowing in the fall season.
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