Question-and-Answer Session
Operator
[Inaudible]
Unidentified Analyst
Just on the Orajel side, if I'm doing the math correctly, this 40 basis points that’s the gross margin now, has been able to keeping moving from 30–40 basis points in there and in fact that and then 70, all I need is another 60 basis points for proposed to do it?
James R. Craigie
Yeah, the way to think about 100 basis points, because what we say, we are expecting to meet or exceed 100 basis points. Netted in that 100 basis points, as we are actually overcoming a big drag from Fx transaction. So what that means is that in Canada, Mexico and some European countries to the extent we source in U.S. dollars, cost of goods sold for those countries it is going to be significantly higher to see about 10 to $12 million. It’s actually totaling about $.0.11 in EPS. But that is a drag that we are overcoming as well in our 100 basis points. So that alone will be about 50 basis points that were covering. So but you are right. The impact from Orajel next year would probably about 50 basis points.
Unidentified Analyst
Jim, can you maybe help us understand your, I mean the prudent caution. Are you seeing in January first part of February de-stock retailers focusing on private label versus your brand, slow down in sales or something or is that just caution on what could happen remainder of the year?
James R. Craigie
I expect the year to get worse, we are seeing a little bit of it right now, we expect the situation deteriorate over the course of the year, based on what we are hearing from retailers and based on the consumer trends we are seeing. So it is a projection, the year is actually also a pretty decent start, but we are seeing signs of what’s going on out there that make us nervous, make us very nervous. And if I had said at this point in time, we can’t get the 12 to 14% earnings growth with only calling 2% organic growth and I think in the end, I wont call it a worse case, but I think at the end we are prudent realistic case in the year. And again I mean the other guys are – other major companies were only calling from the most part 2 to 5. We are not like minus 5, we are in the plus 5, and they are doing what the hell are you doing. We are very much closed to arrange – into the range we’re just calling in our eyes are low end of the range based on what we see out there. But again early, it’s largely our forecast what's happening.
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