Finally, a copy of our earnings release and a recording of this call will be available on our website, www.joesjeans.com, and a telephone replay will be available for 1 week from today.

Now I'll turn the call over to Marc.

Marc B. Crossman

Thanks, Lori, and thanks, everyone, for joining us today. I'll speak about the second quarter results, and then I'll turn the call over to Hamish for a discussion of our financials. Finally, we will end with a Q&A session.

In the second quarter, we increased net sales 16% to a record $28.6 million. This increase built upon the trends we started to see in the fourth quarter of fiscal 2011. First, our domestic wholesale business continues to post healthy increases, growing 12% over the prior year. Second, retail sales grew 26% over the prior year, now representing 20% of our consolidated revenue. Due to the positive results from both wholesale and retail, our operating income increased 82% to $3.1 million for the quarter.

Our retail division sales growth of 26% was driven by a healthy 10% same-store sales increase and the addition of 3 more stores. For the second quarter, both our full price stores and our outlets had positive same-store sales gain. It's important to note that our full price same-store sales were up 38% for the quarter, with the first half of our third quarter under way, we are continuing to see a positive same-store sales growth.

Our retail gross margin increased by 6 percentage points to 71% from 65% primarily due to less commercial activity at the outlets and the addition of 2 full price stores. Our strong same-store sales gains, coupled with the increase in gross margins, led to store-level EBITDA margins of 22% compared to 16% a year ago. We continue to be pleased with the results of each and every store in our base.

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