A certain amount of markdowns are expected in the life of a product, and companies manage accordingly. The problems arise when inventory doesn't sell as quickly as planned, meaning that prices need to be cut sharply to move merchandise. When people talk about a brand's mindshare, they are talking about how well-known and accepted the brand is. Both of these companies enjoy a very high mindshare as a result of their brand-building efforts. Pretty much whatever expenses are left after manufacturing appear on this line.
Major components are marketing costs, overhead, corporate salaries, and research and development.
Beyond this, strong management should be able to rein in other overhead and corporate costs to prevent them from becoming a drag on profits. This term only applies to consumer brands that own their own stores. For instance, if you are looking at comps for August 2000, that figure represents sales growth for stores that were open for all of August 1999. When looking at quarterly figures, stores need to have been open for the entire quarter the year before. Seasonality Most consumer brands are cyclical.