Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Jeff Klinefelter with Piper Jaffray
Jeff Klinefelter - Piper Jaffray
Yes. Thank you. Just a couple of questions for you guys. Maybe Larry, starting with you, on the trade payables. Could you get a little bit more specific on how this is actually hitting you from an accounting perspective, how this has changed or how going forward you might be able to hedge this differently?
Larry Rutkowski
Sure. Basically the $15 million unfavorable foreign exchange to SG&A in the quarter was driven primarily by mark-to-market of the balance sheet at the end of the periods, both the end of August and September. And as we mark-to-market those at the declining exchange rate, we had to take the charge, primarily to our trade liabilities in our Company notes. So that's -- that was the impact. Most of those, now, we have been monitoring closely we are making sure that we are using foreign -- local currency to pay down those as much as possible and mitigate the exchange-rate impact for the foreseeable future.
Jeff Klinefelter - Piper Jaffray
So you would anticipate with the new strategy, that the volatility of that line item would be more controlled in the future periods?
Larry Rutkowski
Yes, Jeff, that's correct.
Jeff Klinefelter - Piper Jaffray
Okay. Mix -- your tax rate, mix of profits geographically, could you just help just clarify that and remind us again kind of your major geographic -- global geographic regions, how your tax rates are different today and how these currency fluctuations are changing that?
Larry Rutkowski
Sure. Absolutely. In terms of what drove our tax rate up from 29% to 31.5% in the quarter, and therefore what we are using for this year in the balance, is the fact the mix of our profits by geography has changed. Much of this has been impacted by foreign currency impacting and reducing those reported profits back here, but also geographic mix.
Jeff, as you know, our effective tax rate in the US is approximately 40%, where internationally our blended rate is closer to 20%. The fact is that seeing more of our profit percentage in US dollars raises that tax rate, and similarly, in other countries and geographies like Italy we are showing some profits at effectively a 28% tax rate.
Jeff Klinefelter - Piper Jaffray
Okay. Two other queries just quickly. Your retail operations showing op margin declines year-over-year. Just remind me, is this part of the investment spending in that division or what else is impacting those op margins, retail op margins?
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