Retail gross margin increased to 33.7% in the current-year quarter, from 30.5% in the same quarter of the prior year. The increase in the retail gross margin was driven by a favorable shift in product mix. The majority of the margin expansion was reported in the furniture and mattress category, which contributed approximately 30% of our product gross profit in the first quarter of fiscal 2013.Credit Segment Results The credit segment’s results, compared to the same quarter in the prior year, were impacted by:
- Lower servicing costs and reduced provision for bad debts, with the continued improvement in overall credit quality of the portfolio;
- Lower borrowing cost, with a reduction in the effective interest rate on outstanding borrowings and a decline in outstanding debt;
- Reduction in average portfolio balance from the prior-year period; and
- A decline in portfolio interest and fee yield to 18.0%, due to a higher relative amount of short-term promotional receivables and increased net charge-off levels.