Our advanced planning for the key shopping moments of 11.11 and holidays allowed us to overcome supply chain obstacles.
For our second quarter, reported net sales grew 14%.
Organic net sales rose 11%.
Adjusted operating margin expanded, and adjusted diluted earnings per share increased 15%.
Reported sales are 20% higher, driven by organic sales growth, and with every region now larger, and we are much more profitable.
In the second quarter, 11 brands achieved double-digit organic sales growth versus the prior-year period.
Product innovation also served as a powerful catalyst for growth across our brand portfolio, contributing nearly 25% of sales.
For 11.11 on Tmall, the Estee Lauder brand ranked No.
1 flagship store in beauty for the second consecutive year as La Mer's flagship store topped luxury beauty once more and Jo Malone London again led in prestige fragrance.
1 flagship store in beauty in its first year.
Its first phase is complete, and we are on track to start limited production by the first quarter of fiscal year 2023.
Our global online channel delivered excellent performance, with organic sales rising high single digit after having surged over 50% in the year-ago period.
La Mer newly advanced The Treatment Lotion, which will be on country in March as a powerful upgrade inside and out, crafted using our unique Green Score methodology and housed in a new recyclable glass bottle made with 20% post-consumer recycled glass.
Lastly, DECIEM vegan brands, The Ordinary, is welcoming back Salicylic Acid 2% Solution, boosting a win list of over 400,000 for the new formula.
As you just heard, our momentum continued in our second quarter, with net sales growing 11% organically and 14% in total, led by a continued overall progression and recovery despite the volatility inherent across markets with a prolonged pandemic.
The inclusion of sales from the May 2021 DECIEM investment added approximately 3 points to reported net sales growth, and the currency impact was neutral.
From a geographic standpoint, organic net sales in the Americas rose 19% as holiday shoppers return to brick-and-mortar retail where we had an exciting array of gifting products and holiday activations in-store.
Every market in the region contributed to sales growth this quarter, and the inclusion of sales from DECIEM added approximately 5 points to the total reported sales growth in the region.
In our Europe, the Middle East, and Africa region, organic net sales rose 13%.
The inclusion of sales from DECIEM added about 3 points to total reported sales growth in the region.
In our Asia-Pacific region, organic net sales rose 5%.
The inclusion of sales from DECIEM added approximately 1 point to total reported sales growth in the region.
From a category standpoint, organic net sales of fragrances grew 30% with double-digit increases across all regions.
Organic net sales in makeup rose 12% as consumers in the Americas and Europe responded to social media activations, holiday assortments, and trends.
Organic net sales in skincare grew 7%, reflecting double-digit increases from La Mer, Clinique, and Bobbi Brown.
The inclusion of sales from DECIEM added 4 percentage points to reported growth.
Our organic net sales in hair care rose 18% as traffic in salons and stores improved, primarily in the Americas.
Our gross margin improved 20 basis points compared to last year.
Inflationary pressures in our supply chain are expected to begin to more prominently impact cost of goods in our fiscal third quarter.
Operating expenses decreased 140 basis points as a percent of sales.
Operating income rose 22% to $1.44 billion, and our operating margin expanded 160 basis points to 25.9% in the quarter.
Our tax rate at 21.4% continued at a more normal level this year versus the prior year, which was impacted by a one-time benefit associated with GILTI.
Diluted earnings per share of $3.01 increased 15% compared to the prior year.
For the six months, we generated $1.85 billion in net cash flows from operating activities, compared to $1.98 billion last year, which reflects both a return to more normalized working capital needs, as well as increased inventory, to mitigate some of the risk of supply chain disruption, given the ongoing global macro challenges.
We significantly increased our capital investment to $459 million to support the construction of our new production facility near Tokyo, as well as investments in our online business and other technology enhancements.
And we returned $1.84 billion in cash to stockholders through a combination of share repurchases and dividends, with an increase in our dividend rate occurring in the second quarter.
At this time, we expect pricing to add approximately 3.5 points of growth with the inclusion of the additional pricing actions we are taking during our second half.
For the full fiscal year, organic net sales are forecasted to grow 10% to 13%.
Based on rates of 1.146 for the euro, 1.357 for the pound, and 6.399 for the Chinese yuan, we expect currency translation to be negligible for the full year.
This range excludes approximately 3 points from acquisitions, divestitures, and brand closures, primarily the inclusion of DECIEM.
Diluted earnings per share is expected to range between $7.43 and $7.58 before restructuring and other charges.
This includes approximately $0.07 of accretion from currency translation and $0.03 of accretion from DECIEM.
In constant currency, we expect earnings per share to rise by 14% to 17%.
We expect organic sales for our third quarter to rise 8% to 10%.
The net incremental sales from acquisitions, divestitures, and brand closures are expected to add about 3 points to reported growth, and currency is forecasted to be negative by about 1 point.
We expect third quarter earnings per share of $1.55 to $1.65.
Currency is expected to be $0.01 accretive to EPS, and the inclusion of DECIEM is not expected to be material.

Summary:
For our second quarter, reported net sales grew 14%.
Its first phase is complete, and we are on track to start limited production by the first quarter of fiscal year 2023.
Inflationary pressures in our supply chain are expected to begin to more prominently impact cost of goods in our fiscal third quarter.
Diluted earnings per share of $3.01 increased 15% compared to the prior year.
For the full fiscal year, organic net sales are forecasted to grow 10% to 13%.
Diluted earnings per share is expected to range between $7.43 and $7.58 before restructuring and other charges.
We expect third quarter earnings per share of $1.55 to $1.65.