Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Steve Denault – Northland Securities, Inc.
Steve Denault – Northland Securities, Inc.
You made reference to a I think it was four categories that seemed to be strong and one of which appeared to be firearms and I’m not certain whether you suggested it was used firearms or new firearms, I guess the question is what are you seeing within both new and used firearms and ammunition lately?
Mark Baker
Clearly there’s been an explosive increase in costs as it relates to ammunition and yet in some cases availability has been a problem, but we’ve had great supply from our suppliers. Our new higher costs obviously that have been passed on to the consumers and yet our ammunition business in dollars and in most cases units, continue to be strong. There has been somewhat of a shift to used firearms from new, but our firearm business has picked up substantially from the third quarter.
Rick Vazques
Yes, that’s pretty much it. We see a growing stronger trend in the used firearms business both from a lot of people coming in to trade in as well as our ability to sell them. But by no means is new firearms too far behind. It’s doing very well as well.
Mark Baker
Be also mindful that we are a unique opportunity because of our gunsmith to buy a used firearm and have them reconditioned for that consumer; unique to anybody else.
Steve Denault – Northland Securities, Inc.
Are there any particular changes in the trends amongst handguns versus long guns?
Mark Baker
Clearly we’ve seen some handgun business increase and continue to increase, that’s actually up year-over-year. But it’s pretty good across the board.
Operator
Your next question comes from the line of Robert Simonson – William Blair & Company
Robert Simonson – William Blair & Company
With your comps going down I assume that you had some deleveraging on your occupancy costs that hit the gross margin, you talked about some of the things that were favorable to your gross margin and the improvement that you posted, can you quantify what the impact on the gross was of negative comps?
Mark Baker
As a result of including direct for the first time, the reality is the store occupancy really only had about a four basis point negative hit to the expense ratio. Again on a retail basis it would have been closer to 100 basis points by itself but again because we’re including direct for the first time there’s minimal impact in quarter one.
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