Question-and-Answer Session
[Operator Instructions]. Your first question comes from the line of David Lowman from Morgan Stanley. Please proceed. David your line is open, you may proceed with your question please.
David Lowman - Morgan Stanley
Thank you. Good evening everyone. Couple of just quick questions, first on the hip side. Can you give us an update on the Cormet launch, where are we with training courses and when we can expect a full rollout?
Stephen P. MacMillan - President and Chief Executive Officer
Sure. The training course has been happening through the second quarter, David. I would tell you to be quite candid. Our organization shifted from playing offence to defense in the first half of the year, as we reeled from the hip recall. And I think we'll expect a steady uptick here in the third quarter and beyond. But again this one continues to go certainly slower than we would have planned at the start of the year
David Lowman - Morgan Stanley
Okay. And then on the gross margin, Dean, can you quantify maybe the components of that 20 to 40 basis point year-over-year decline. What the positives and negatives are in there?
Dean H. Bergy - Vice President and Chief Financial Officer
Well, it primarily David is the quality initiatives kicking in. I also mentioned the fact that as you know when we've talked about it before, we have a few components of higher raw material costs. Some of that relates to the price of some of the commodities that we are purchasing, the models that go into some of the products, as well as to some degree, a little bit of the dent from the impact foreign currency in that category. And then also we have some higher shifting costs that are going into that. But from a magnitude standpoint it's primarily the quality initiatives that are going to impact that year-over-year change.
And again, if you think about where we would have mainly anticipated this to be in a normal year, we would have expected our margins maybe up 30 to 50 basis points. So all in, we are taking a pretty good whack as we roll into cost of this quality which will have some ongoing impact but should lead us on to better prices in the company as we go forward.
Operator
Your next question comes from the line of Mike Weinstein from JP Morgan, please proceed.
- To read the full transcript on Seeking Alpha, click here »




