FUTURE
OUTLOOK
Our 2008 forecasted consolidated results are generally based on
our long-term annual growth targets as discussed on
page 12, although we currently expect our internal net
sales could increase at a mid-single digit rate, slightly
exceeding our low single-digit growth target. We expect this
higher-than-targeted growth to come principally from previously
announced pricing initiatives, improved product mix and
continued innovation. Despite a projected decline in gross
margin of approximately 100 basis points, which is being
negatively impacted by 40 basis points due to acquisitions
and 30 basis points due to up-front costs recorded in cost
of goods sold, we believe the higher-than-targeted sales growth
will support mid single-digit consolidated operating profit
growth. As discussed on page 17, net interest expense for
2008 is expected to be comparable to 2007 expense, and our
consolidated effective income tax rate is expected to be
approximately 31%. Finally, as discussed in more detail on
page 34, our fiscal year 2008 will benefit from a
53rd week. The benefit associated with this extra week will
be largely invested in emerging markets and various acquisitions
in the United States. These factors are expected to provide the
growth necessary to achieve our target of high single-digit
growth in 2008 net earnings per share. In addition, we
remain committed to reinvesting in brand building,
cost-reduction initiatives, and other growth opportunities.
Lastly, we expect our cash flow performance to remain strong and
are currently expecting 2008 cash flow to be approximately even
with our 2007 results.
