Both revenue and adjusted operating income exceeded pre-pandemic levels increasing 14% and 346%, respectively, over fiscal year '20 two years ago and higher operating profit delivered a record Q2 earnings per share of $1.5, compared with a loss of $1.23 last year and positive $0.15 two years ago all on an adjusted basis.
Additional highlights include delivering another strong quarter of digital results with double-digit operating profit to achieve a 19% digital penetration.
This was driven by a 97% increase in digital revenue compared to fiscal year '20 as we retained almost 80% of last year's volume, which was elevated due to store closures.
Next, driving much higher conversion and transaction size to deliver store sales that were almost at pre-pandemic level, increasing gross margin by 640 basis points versus last year and 50 basis points compared to fiscal '20, driven primarily by higher full-price selling, leveraging adjusted SG&A by 230 basis points compared to pre-pandemic levels and further strengthening of our already strong balance sheet and cash position, enabling a balanced approach of investing in our business while also returning capital to shareholders going forward.
The current fashion cycle, which has been shifting more to casual products, plays into Journeys' wheelhouse with strengthened the assortment across the board highlighted by the balance in its top 10 brands evenly split in the quarter between casual and fashion athletic.
Resulting in online contributing almost 45% of total sales.
At the same time, e-commerce revenue grew strongly increasing over 50% compared to pre-pandemic levels, as customers chose the digital channel to engage with the brand.
These efforts have helped contribute to an increase of new online customers of more than 100% compared to pre-pandemic levels.
Journeys marketing efforts are gaining leverage by focusing on influencers who the team consumer viewed as more authentic creating a more organic experience that further builds upon the trust Journeys have established with this customer This content is being delivered through social media channel and SMS helping to drive a significant increase of 50 plus percent of new online customers.
In Q2 adjusted earnings per share of $1.5 compared to $0.15 in fiscal '20.
In terms of the specifics for the quarter, consolidated revenue was $555 million up 14% compared to fiscal '20 driven by continued strength in the e-commerce, which is up 97% versus fiscal '20 taking overall digital sales to 19% of our retail business compared to 10% in fiscal '20.
With stores open for 97% of the possible days in the quarter, overall store revenue was down only 1% versus fiscal '20.
Consolidated gross margin was 49.1% up 50 basis points from fiscal '20 driven by full-price selling partially offset by the mix shift toward licensed brands and higher shipping costs from higher penetration of e-commerce while e-commerce puts pressure on our gross margin rate.
Journeys' gross margin increased 220 basis points driven by lower markdowns in both stores and online.
Schuh's gross margin decreased 200 basis points due entirely to the higher shipping expense from the shift in the e-commerce channel mix.
J&M's gross margin increased 570 basis points, benefiting from fewer markdowns taken on pack and hold inventory and higher full-price selling.
Finally the revenue growth of licensed brands typically our lowest gross margin rate negatively impacted the overall mix by 90 basis points.
Adjusted SG&A expense was 45.3% a 230 basis point improvement compared to fiscal '20, as we leverage from higher revenue and ongoing actions around expense management.
Year to date through Q2, we have negotiated 75 renewals and achieved a 29% reduction in rent expense in North America.
This is on top of a 22% reduction for 123 renewals last year.
With over 40% of our fleet coming up for renewal in the next couple of years.
In summary, the second quarter's adjusted operating income was $21.1 million versus fiscal '20s $4.7 million.
All operating divisions achieved higher operating income compared to fiscal '20 led by Journeys nearly 170% increase.
Our adjusted non-GAAP tax rate for the second quarter was 25%.
Turning now to the balance sheet, Q2 total inventory was down 27% compared to fiscal '20 on sales that were up 14%.
Our ending net cash position was $284 million, $70 million higher than the first quarter's level driven by strong cash generation from operations.
As a reminder we currently have $90 million remaining on our board authorized share-repurchase plan and we have a solid track record of returning cash to our shareholders.
Capital expenditures were $8 million as our spend remains focused on digital and omnichannel and depreciation and amortization was 11 million.
For taxes we expect the Q3 tax rate to be around the 25% we saw in Q2.
The annual tax rate is expected to be approximately 30%.
As a reminder, our target for the year is to identify savings in operating expenses of $25 million to 30 million on an annualized basis or approximately 3% of total operating expenses.
The teams have identified over $20 million in savings with the largest amount coming from rent and the remainder in several areas, including increased, selling salary productivity, travel conventions, inner store freight, marketing compensation, and other overheads.

Summary:
This was driven by a 97% increase in digital revenue compared to fiscal year '20 as we retained almost 80% of last year's volume, which was elevated due to store closures.
In terms of the specifics for the quarter, consolidated revenue was $555 million up 14% compared to fiscal '20 driven by continued strength in the e-commerce, which is up 97% versus fiscal '20 taking overall digital sales to 19% of our retail business compared to 10% in fiscal '20.
With stores open for 97% of the possible days in the quarter, overall store revenue was down only 1% versus fiscal '20.