Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jeff Blaeser with Morgan Joseph. Jeff, your line is live. You may ask your question. Thank you. Your next question is coming from Jody Kane with Sidoti & Company.
Jody Kane - Sidoti & Company
Thanks. Just the first question about the SG&A. It’s been very well-contained over the last three quarters. Is that something we should look for going forward?
Richard J. Cote
I think from the standpoint of our SG&A, clearly our biggest level of spend in support of our brand businesses is in the fourth quarter for the holiday season, so I think from that standpoint, you’ll probably see it going up a little bit on that and obviously also from a standpoint of last year, we had a $6 million charge that took place in the third quarter, so that charge is obviously not being repeated in this year. So that makes the numbers look a little bit better for the year-to-date.
Jody Kane - Sidoti & Company
Okay, I mean the -- in ’05 and ’06, it was growing -- SG&A was growing about 11% to 13%, 14%. This year it’s down to 4% growth. How should we look at that going forward?
Eugene J. Karpovich
Certainly we don’t expect our operating expenses to grow at the same rate as our sales growth. However, we expect expenses in the fourth quarter to be a bit higher than we’ve experienced in the first three.
Richard J. Cote
And as we go forward, one of the things we talked about is our five-year plan focuses on operating profit growth coming in the early years from gross margin improvement, which we’ve obviously been seeing and then the latter part of the five-year plan coming from further SG&A leveraging, which will primarily come post the implementation and stabilization of SAP, our new enterprise wide reporting system.
Jody Kane - Sidoti & Company
All right. One more question, if you don’t mind, and then I’ll jump back in the queue. Expansion of the -- this sort of global brand expansion, where would you say you are in that cycle? And how many new countries can you add? How many new brands can you move into new countries? If you can just talk a little bit about that, please.
Efraim Grinberg
Really I think that the expansion right now has come from the strength of our licensed brands internationally and that’s been very strong, as well as Ebel internationally and Ebel has been performing very well in Europe as well as in the Middle East.
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