Question-and-Answer Session
Operator
Thank you. Today's question-and-answer session will be conducted electronically. (Operator instructions). We will take our first question from Rick Nelson with Stephen's.
Rick Nelson – Stephen's
Thank you. Good morning. Congratulations.
Tom Millner
Hi, Rick.
Rick Nelson – Stephen's
Can you tell me where the $8.5 million gain landed in the segmented results for operating income?
Ralph Castner
Well, yes, initially it is in the financial services revenue, but as you know, we allocate profits to the other two segments to the extent that the profitability exceeds the 2% return on assets. So ultimately, those would – the profit aspect of that, a portion of that would have shown up in the other two segments, although I will tell you and I can get the numbers for you, Rick, but the profitability increases we saw in the other two segments were not driven by the impact of the bank. The marketing piece of the retail segment were up 1.7 million and the direct business were up 1. 3 million relative to the year ago period.
Rick Nelson – Stephen's
Okay. Thank you for the clarification. Also interested in taking a look at comps, you pulled out the gun and ammo business how the comps would have looked in the quarter?
Ralph Castner
Rick, as you know, several of our categories had been impacted by external macro economic factors, namely gun, ammo and power sports. I think what was encouraging during Q2 was that if you exclude all of those categories the comps for the quarter would have been up almost 1%.
Rick Nelson – Stephen's
And how of those categories produce the slowdown that you're indicating, what sort of comp do you think we should look for over the remainder of the year?
Ralph Castner
Well, I think what we said was guns are decelerating to no one's surprise. Ammo remains very strong and I think as we provided our outlook for the future we baked all that in knowing that we were going to have big comps in guns in Q4 and our outlook reflects at this point in time how we view the rest of the year.
Rick Nelson – Stephen's
Thanks. And I know that guns are low-margin category, how about the ammunition business?
Ralph Castner
It is also a low-margin category.
Rick Nelson – Stephen's
Okay. And so the margin improvement that we saw in the quarter, merchandise margins, I would suppose would be sustainable in your mind given the mix shifts there in particular?
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