Demand, while down from unprecedented levels in the second quarter of last year was up over prepandemic levels of Q2 2019 by 14%.
PG&A sales were up 35% during the quarter.
We grew sales 64% as the economies outside North America continued to improve in Q2.
On a two-year basis, our retail is up 14%, reflecting continued growth in powersports, driven by strong underlying consumer demand.
As expected, our second quarter North American retail sales were down 28% from the 57% increase reported in the second quarter of 2020.
Our ORV business gained over 1 percentage point of market share in both ATVs and side-by-sides.
Motorcycle retail sales also continued to grow, increasing 22% during the quarter.
Dealer inventory levels ended the quarter down 57% on a year-over-year basis and were also down sequentially.
Pre-pandemic presold orders accounted for roughly 3% of our retail.
Exiting Q2, ORV presold orders were approximately 80% of retail.
These audits have found less than 1% where the names changed at registration and where there were changes, the majority had valid reasons for the change.
Lastly, we have analyzed shipping patterns to our dealers by tiers, volumes and regions and were all within 1% of pre-pandemic levels.
As indicated in our last call, we are also adding capacity later this year and into 2022 that will bring on 30% more production capability between ORV boats and motorcycles.
New customer growth in the first half of 2021, while down slightly from the robust rates in the first half of 2020 remains comfortably ahead on a comparable two-year pre-COVID basis with approximately 300,000 new customers coming into the Polaris family over the first half of 2021.
The mix of new to existing customers has remained high at over 70% of the total customers for ORV, motorcycles, snowmobiles and boats.
Second-quarter sales were up 40% on a GAAP and adjusted basis versus the prior year.
Second-quarter earnings per share on a GAAP basis was $2.52.
Adjusted earnings per share was $2.70, which was up 108% for the quarter, exceeding our expectations.
Adjusted gross margins were up approximately 310 basis points year over year, primarily due to lower promotional and floor plan financing costs driven by low dealer inventory and strong demand, which requires minimal promotional dollars to drive retail.
Adjusted operating expenses were up 33% in the quarter relative to Q2 2020, which was heavily impacted by short-term cost actions taken to offset COVID-19 shutdowns.
ORV/Snowmobile segment sales were up 38%.
Motorcycles were up 50%, Adjacent markets increased 98%, Aftermarket was up 15% and Boats increased 49% during the second quarter relative to Q2 2020, which was adversely impacted by COVID-19 closures.
Average selling prices for all segments were up, ORV increased about 13%, Motorcycles were up approximately 8%, Adjacent markets increased 10% and Boats were up 14% for the quarter.
Our International sales increased 64% during the quarter, with all regions and segments growing sales as the heavily pandemic impacted countries began to open their economies again.
Currency added 15 percentage points to the International growth for the quarter.
And lastly, our parts, garments and accessories sales increased 35% during the quarter, driven by increased demand across all segments and categories of that business.
Moving on to our guidance for 2021.
Given the stronger-than-anticipated performance in the second quarter, we are increasing our full-year adjusted earnings per share guidance for 2021 and now expect earnings to be in the range of $9.35 to $9.60 per diluted share.
We are narrowing our total company sales growth guidance by holding the upper end of our sales guidance range at 21% and raising the lower end of the range to 19% given our sales growth performance to date.
Adjusted gross profit margins are now expected to be down in the range of 40 to 70 basis points.
Adjusted operating expenses are now expected to improve 90 to 120 basis points as a percentage of sales versus last year given the higher sales growth expectations.
Our first half 2021 earnings per share finished at $4.99, a 228% increase over the first half of 2020.
Given our full-year revised guidance, the second half earnings per share equates to a range of $4.36 to $4.61 per diluted share, a decrease of 26 to 30% on a year-over-year basis and an 8 to 13% decline on a sequential basis from the first half of 2021.
On a two-year basis, our second half earnings per share results at the high end of the range are expected to be up over 30% compared to the second half of 2019.
I would also add that the quarterly cadence for earnings per share in the second half of 2021 is more heavily weighted toward the fourth quarter with approximately 60% of our second half earnings per share occurring in Q4.
Motorcycle sales are anticipated to be up low 30%, down slightly from prior guidance.
Year-to-date second quarter operating cash flow finished at 196 million, down 37% compared to the same period last year, driven by an increase in factory inventory due to the supply chain inefficiencies.
Our expected full-year cash flow performance remains unchanged at down mid-30% compared to last year.
During the second quarter, we spent $111 million on share repurchases.

Summary:
Second-quarter sales were up 40% on a GAAP and adjusted basis versus the prior year.
Second-quarter earnings per share on a GAAP basis was $2.52.
Adjusted earnings per share was $2.70, which was up 108% for the quarter, exceeding our expectations.
Moving on to our guidance for 2021.
Given the stronger-than-anticipated performance in the second quarter, we are increasing our full-year adjusted earnings per share guidance for 2021 and now expect earnings to be in the range of $9.35 to $9.60 per diluted share.
We are narrowing our total company sales growth guidance by holding the upper end of our sales guidance range at 21% and raising the lower end of the range to 19% given our sales growth performance to date.
On a two-year basis, our second half earnings per share results at the high end of the range are expected to be up over 30% compared to the second half of 2019.