Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions). Our first question comes from John Shanley with Susquehanna Financial Group. Please go ahead.
John Shanley - Susquehanna Financial Group
Thank you and good afternoon guys.
Steven Nichols
Hi, there.
John Shanley - Susquehanna Financial Group
Steven, with the guidance that you're giving us implies a fairly negative year '08 with earnings down and -- sales rather down and expect to 17% to 24% in more troubling earnings guidance that you're giving us down somewhere between 64% and 90%. Are you still planning to maintain the level of spending that you had over the last year or so? I know it's important for marketing and so on, but it's certainly deleveraging your SG&A with the amount of spending versus the sales decline?
Steven Nichols
We're very fortunate in that we have an exceedingly strong balance sheet and we think we have some programs that will be received positively and rather than put them [triple] amount very, very slowly, we think we're going to be aggressive with it. So yes, we will think it through and overspend and hopefully by 2009, we'll have the brand looked at significantly better by the consumer and possibly at the same time the retail environment will be stronger. So yeah, we're planning on doing that job.
John Shanley - Susquehanna Financial Group
Okay. Can you still justify hanging on to small business like Royal Elastics that's also declining in this kind of a market environment where the core domestic business is really taking it right on the chin?
Steven Nichols
That's something that we're going to keep reviewing. Somewhere as along the way we think there is a light at the end of the tunnel and there will be a point where we'll give up on it but we have not done that yet, John.
John Shanley - Susquehanna Financial Group
Okay. Fair enough. Just turning international, you're doing a really a good job in spite of the tough market environment in Europe and the international business as a whole with sales now little over 50% of which you're generating looks like coming out of the international arena, and more importantly 65% of your forward orders coming from international.
Can you give us an update in terms of where you stand in terms of penetrating countries other than France, Italy -- I am sorry the U.K., Benelux, and Germany, are you starting to penetrate France, Spain and Italy to a better degree than you had in the past?
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