Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Adam Uhlman - Cleveland Research Company.
Adam Uhlman - Cleveland Research Company
I guess, Chuck, the first question for you on the guidance for the next quarter, sales up slightly but margins guided down quite a bit, with gross margin expansion. It sounds like there's going to be quite a bit of SG&A deleveraging, SG&A growing perhaps 7% year-over-year. Could you talk about what's behind that SG&A growth?
Charles Boehlke
Well, the first thing I would say, you saw that we significantly exceeded our expectations for sales headcount in Q4, so the sales hires that were on board for a partial, if you will, Q4 OPEX experience are all embedded and in for an entire quarter in Q1.
We also have an uneven distribution, if you will, of our annual merit review pull. A significant portion of our organization has their merit reviews done in the first quarter of every year, so there's embedded spending in salaries and fringe benefits probably of $2 million, if you will, Q1 versus where we were in Q4.
You also have things like advertising in Q4 are at their low levels during the year as plant shutdowns and so forth means we generally reduce circulation and advertising spending. Just getting that back to levels of last year or even slightly higher than that is about an additional $1 million in advertising expense above the Q4 levels here.
So there's some embedded spending that's in place. Yes, there's a net increase in overall spending because of some of those embedded things, but anything that's discretionary, it should be very clear that Q1's spending number is not a function of adding stuff during Q1. It's a carry in of what happened last year, with a return to more normal levels at Q1 traditionally that we spend in advertising that's caused that number to be higher on the OPEX line.
The other piece, Adam, I need to point out is freight expense, both versus Q4 and versus last year. Yes, over time this year, with the reduction in oil, we'd expect some of the surcharges to hopefully abate a little bit. But where we were in Q4 and frankly where we were in Q1 a year ago, the freight expense is much higher than it had been this time a year ago.
So those factors all net to an increase in OPEX over where we were in Q4.
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