The company's gross margin declined to 43.2 per cent for the fourth quarter of 2017, as benefits from changes in foreign currency rates and product costs were more than offset by pricing and other inventory management initiatives, and channel mix. Adjusted gross margin, which excludes a $1 million impact from restructuring efforts, was 43.3 per cent.
For fiscal 2017, gross margin declined to 45.0 per cent as inventory management initiatives more than offset favourable channel mix. Adjusted gross margin, which excludes a $5 million impact from restructuring efforts, was 45.1 per cent.
Selling, General and administrative expenses increased 40.7 per cent to $591 million, or 43.3 per cent of revenue, primarily due to third to fourth quarter timing shifts in marketing execution and lower incentive compensation in the prior period, as well as continued investments in the direct-to-consumer, footwear and international businesses. For 2017, selling, general, and administrative expenses was up 14 per cent to $2.1 billion, representing 41.9 per cent of revenue.
"After years of rapid growth and building a globally recognised brand, the dynamic landscape of 2017 was a catalyst for us to begin strategically transforming
For 2018, the company's net revenue is expected to be up at a low single-digit percentage rate reflecting a mid-single-digit decline in North America and international growth of greater than 25 per cent. Gross margin is expected to increase to 45.5 per cent due to benefits from lower planned promotional activity, product costs, channel mix and changes in foreign currency. (RR)
Fibre2Fashion News Desk – India