As a result of the acquisition on March 7, 2011, by TPG Capital and Leonard Green & Partners, the company prepared financial statements last year for the predecessor period from January 30, 2011 through March 7, 2011, and the successor period from March 8, 2011 through July 30, 2011.Additionally, we have prepared a pro forma statement of operations for the first half of 2011, giving effect to the acquisition as if it occurred on the first day of the fiscal year and eliminating all transaction-related nonrecurring expense, which can be found in Exhibit 3 of our press release. The results of the second quarter of fiscal 2011 have not been prepared on a pro forma basis as the transaction was effective prior to the first day of the quarter. We refer you to supplemental MD&A and other disclosures in our Form 10-Q for the second quarter of fiscal 2012. During this call, we will refer to adjusted EBITDA, which adjusts for items such as noncash share-based compensation, as well as the impact of purchase accounting resulting from the acquisition. You can find a reconciliation of adjusted EBITDA in Exhibit 5 of our press release. With that, I would now like to turn the call over to Jim Scully. James S. Scully Thanks, Allison, and good morning. I'd like to provide a brief overview of our company's progress as we reached the halfway point of 2012. Stuart will then walk you through our financials in more detail. After which, we will open the call up to your questions. We are pleased with the momentum in our business and the strategic initiatives we have underway, and this is reflected in our financial results. The second quarter included a double-digit increase in comparable company sales and significant expansion in merchandise margin, which fueled a 38% increase in adjusted EBITDA as compared to last year.
Specifically, for the second quarter, total revenues increased 21% with comparable company sales increasing 14% and direct sales increasing 16%. Our gross margin increased 860 basis points to 45.1%. If we exclude amortization of inventory step-up as a result of purchase accounting from last year, gross margin increased 360 basis points driven by merchandise margin expansion and buying and occupancy leverage. Our adjusted EBITDA totaled $89 million or 16.9% of revenues in the second quarter of this year, which is a 38% increase versus the same period as last year.Our second quarter results reflect a strong response to our spring and summer offerings. Our Women's business has benefited from our strategy to narrow our assortments and invest in big ideas, as I'm sure you all have seen firsthand in our stores and online. In addition, we remain focused on building our marketing capabilities, as well as the infrastructure required to deliver long-term high-quality earnings growth. I would now like to turn the call over to Stuart to review our financial results in more detail and provide the outlook for CapEx for the year. Stuart C. Haselden Thanks, Jim. Turning to the details for the second quarter. Total revenues increased 21% to $526 million. Total comparable company sales, which include comp store sales, direct sales and shipping and handling revenues, increased 14%. Our store sales increased 24% to $384 million with net square footage growing 8% in the second quarter, driven by 33 net new store openings in the last 12 months. We opened 6 new stores in the second quarter of this year. Direct sales increased 16%, which includes our J. Crew factory and Madewell direct businesses. Gross profit for the second quarter was $237 million. Gross profit margin increased 860 basis points to 45.1%. Last year included $22 million in amortization of inventory step-up as a result of purchase accounting.
Excluding this item, gross margin increased 360 basis points driven by 240 basis points of merchandise margin expansion, coupled with 120 basis points of buying and occupancy leverage. Our merchandise margin improvement resulted from higher full-price sell-throughs, driving lower markdowns versus last year.Read the rest of this transcript for free on seekingalpha.com