Short-term financial performance continues to improve and even as we make increased investments for long time organic growth. As we'd anticipated consolidated sales were lower due to factors affecting our Marine segments and to a lesser extent our Recreational segment.
Preliminary U.S. retail boat industry demand was up in the quarter with improvements continuing in aluminum and fiberglass outboard product categories, although at a lesser rate increase in the first quarter. This is being partially offset by continuing weak demand in fiberglass sterndrive inboard categories, especially in boats larger than 30 feet for demand continues to decline. We experienced lower sales in Europe in all four of our segments.
For the total company, excluding Sealine, revenues declined about $41 million or 23% in this region. Revenues generated from our U.S. and the rest of world customers increased about 3%. Ending boat pipeline inventories remained at healthy levels and our weeks on hand as measured on a trailing 12-month retail basis declined.
Our gross margin of 26% represents an increase of 90 basis points from the prior year. Lower warranty, depreciation and pension expenses combined with successful cost reduction activities contributed to the higher gross margin.Contrary to the first quarter, SG&A and R&D expenses in the aggregate increased by 3% as lower variable compensation expense was only partially offset by company-wide investments in growth initiatives. Finally, our lower income tax provision contributed the higher net earnings during the quarter.For those of you, who may have printed out the slides and are flipping through those, I'll call out page numbers. We're now on Slide 5. Sales decreased by 3% in the second quarter. Sales generated by our ongoing European businesses declined by approximately $41 million.Additionally, revenues from our Sealine boat brand, which we divested in Q3 of 2011, were approximately $20 million in the second quarter of 2011. I will comment in a few moments about some of the other major factors that affected our topline during the quarter.
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