Murray S. Kessler
President and Chief Executive Officer at Perrigo
Thank you, Brad, and good morning, everyone. I want to recognize the entire Perrigo team for a truly remarkable quarter. We are executing well against our self-care strategy, which is clearly the right direction for our business. And even though we continue to operate in an extremely difficult macroeconomic environment, the team once again achieved a number of major accomplishments during the second quarter.
Let me be specific. First, we closed on the HRA transaction, which had an immediate impact on the quarter and is setting us up for outsized growth. Two, we closed on $2.6 billion in senior secured credit facilities, locking in favorable rates and further certainty. Three, we received FDA approval of and launched Perrigo's first-ever branded Rx-to-OTC switch, Nasonex 24-hour. Four, we filed with the FDA for the first-ever Rx-to-OTC switch for a daily birth control pill, the Opill. And five, we worked around the clock at our infant formula facilities to deliver 72 million more infant feedings year-to-date than the same period last year as we continue to do everything we can to help build a severe shortage in the U.S. created by a competitor's recall. And we did all of this while delivering year-over-year constant currency top line growth of 20%, gross profit growth of 17% and operating income growth of 8%. We also achieved a 310 basis point sequential improvement in Perrigo's gross margin as promised.
Net-net, I'm pleased to see strong fundamentals on our business and a full pipeline of significant innovation. Looking at the quarter in a bit more detail. We delivered strong top line growth with reported net sales growth of 14% or as I just said, plus 20% growth on a constant currency basis. This was driven by robust organic growth of plus 17%, stemming from continued strength in our product categories, including cough, cold and infant formula and channel expansion, including e-commerce. Worth pointing out, the bulk of our 17% organic growth was volume mix with only four points of that growth coming from price. Sizable volume/mix growth, price increases and the incremental contribution of HRA revenues for two months overcame significant inflationary pressures on cost, the Latin America and ScarAway divestitures and the higher operating expenses in the quarter versus last year, which included $8 million of costs not expected to repeat.
Higher year-over-year interest expense and a slightly higher share count led to constant currency diluted EPS for the quarter of $0.49 or $0.43, including adverse currency translation. Importantly, top line growth year-over-year accelerated for the fifth quarter in a row as consumer demand for the categories we compete in is very strong, and our inflation justified price increases taken to offset severe inflation-related cost increases are taking effect. As I said, HRA, which is included in our results, made an immediately positive impact to the quarter, contributing $65 million in constant currency net sales with only two months of accretion following the April 29, 2022 close. HRA's high gross margin had a 220 basis point positive impact on Perrigo's consolidated results. We expect the long-term benefits from the acquisition of the fast-growing HRA portfolio to be significant, including our estimate of over $40 million in cost synergies.
As we align our strategic growth pillars to incorporate the HRA portfolio, we've created two new product categories we are reporting in our disclosures: women's health and skincare. Both will be important to the future Perrigo growth story. Skincare is now our second largest global category, 15% of global sales. The segment is growing strong and includes major brands like Compeed, ACO, Maderma and Amalia. We view women's health as potentially our largest and most relevant global growth opportunity. And we look forward to sharing more about our plans in this area in the near future. With those new product category definitions as part of our disclosure framework, let's take a closer look at revenue growth for the quarter. As you can see, strong double-digit growth was experienced across both Consumer Self-Care Americas and Consumer Self-Care International. It was also strong across our major product categories.
Let me give you a few notable highlights. One, our upper respiratory revenues grew 44% versus a year ago globally, and our related pain and sleep aid revenues grew 14%. We attribute this to a rebound in cough/cold sales as compared to last year's sales, which were still depressed as a result of COVID-19-related lockdowns. That, in combination with an extended cough/cold season this year and a good start to the global allergy and hay fever seasons, accounts for the strong growth in this product category. Two, a 31% increase in our nutrition business was driven by infant formula, which primarily benefited from the surge in demand in response to the competitor brand recall I just mentioned. Three, a 30% increase in our skin care business relates to the addition of Compeed and Mederma, and continued strong growth on ACO. And four, our women's health business grew 77% due mainly to the addition of the HRA businesses, which also benefited from the increased demand spurred by the public concern before and after the recent judicial decision in the U.S. related to Roe V. Wade.
It's worth noting that our shipment growth rates were somewhat higher in the quarter than the consumer offtake growth rate. I note that this is not due to increased inventory as customers. Rather, if you remember last year's second quarter was slightly depressed due to inventory reductions by our customers. The absence of that reduction this year gave an extra benefit to Q2 sales. In fact, our inventory levels are where they should be with the obvious exception of infant formula. Another positive trend in the second quarter was the share trend between total store brands and national brands. Year-to-date, total store brands have gained more than three share points on a dollar basis. While early, consumers are clearly shifting to store brand as a result of inflation. As we discussed last quarter, our infant formula business continued to gain volume share in the non-WIC category, up more than 10 share points versus prior year.
These gains are due to the launch of our store brand hypoallergenic formula and, of course, the shortage created by the competitor recall. We continue to run our factories around the clock and have optimized our product offering so that we can produce 117% of our normal full capacity. We're doing everything we possibly can to help feed America's babies during this crisis. Importantly, this unusual circumstance has given many families the opportunity to try a private label infant formula for the first time, a good portion of which we believe will be sticky. Latest survey results show that more than one in three pediatricians are recommending Store Brand formula to parents, up from one in five in October of a year ago.
These results illustrate that our physician-directed marketing efforts are making significant progress. And this is an important trend as the parent or caregiver who purchases infant formula typically turns over every 12 months. Our investments over the last few years in our e-commerce business continued to deliver significant growth for Perrigo. E-commerce sales in the first half of the year grew more than 25% versus the strong prior year period, driven both by the Americas retail customers and international direct-to-consumer initiatives. E-commerce sales are now over 12% of Perrigo's global sales. During the quarter, the team launched our first-ever branded Rx-to-OTC switch, Nasonex, now available on retail shelves.
And as a reminder, this was a first cycle approval and illustrates the robust regulatory capabilities at Perrigo. Congratulations to the entire team on this important launch. Another example of our regulatory and Rx-to-OTC switch capabilities at Perrigo is the recent filing of our application to the FDA for the potential first-ever over-the-counter oral contraceptive, the Opill. This filing represents a tremendous amount of work done by our HRA colleagues and our commitment and their commitment to women's health. It's a meaningful step forward to expanding affordable access of daily birth control products for women in the U.S. at a time when it is most needed.
The outcry of support for this filing was overwhelmingly positive, and we hope to launch this product in the U.S. late next year pending FDA approval, of course. Another bright spot in the quarter was gross margin. Perrigo's second quarter gross margin expanded sequentially from the first quarter by 310 basis points, well on the way to our goal of recapturing 400 to 500 gross margin points versus the first quarter by year-end. I don't want to sugarcoat this in any way. Rising input costs and severe labor shortages are still part of this dynamic macro environment. These headwinds have yet to ease, but despite that, the price increases we've been able to implement along with a number of procurement actions gives us confidence that we will still reach our gross margin goal. As I discussed earlier this year, our self-care transformation is complete.
Now is the time to optimize and accelerate the new Perrigo. An important part of that next phase is our global supply chain initiative, designed to maximize productivity and efficiency in order to deliver world-class service levels and enhance gross margins for years to come. The design phase is basically complete and we've begun what will be a five-year phased optimization, which ultimately should deliver between $100 million and $300 million in net cost savings. Let me give you a few examples. First, we'll be upgrading our demand planning systems utilizing the business intelligence and global data warehouse we put into place over the past few years. This is expected to result in reduced product obsolescence, reduced inventory and increased productivity in our facilities.
Also increasing productivity will be the implementation of a Perrigo work system that will provide visible and meaningful metrics at the shop floor level to enhance agility, which will again enhance productivity and free up capacity. We will be optimizing and streamlining the portfolio by SKU to reduce complexity. 80% of the complexity in our system is not consumer-facing. This is a big opportunity for both us and our customers. In a number of facilities, we will be modernizing manufacturing equipment to increase automation, increase capacity and reduce business interruption risk. And a final example is we will be creating centers of excellence for our different product streams at key locations around the world.
Hopefully, this gives you a flavor that our commitment to profitable growth, growing margins and superior service is not a short-term exercise. It's part of the fabric of Perrigo Company and our culture. As always, there'll be a cost required to achieve these savings. And I look forward to sharing the entire plan and the cost required to achieve them in more detail at the appropriate time. So in closing, it was a solid quarter. I'd even say, it was an extremely strong quarter in the context of the headwinds we continue to face. We are benefiting from strengthening fundamentals, margins that have begun to grow again and a strong flow of innovation.
We know our new self-care strategy is correct and our emphasis going forward is to optimize the newly configured company against this strategy and to accelerate profitable growth. Our priorities are to continue to drive growth in our six strategic product category pillars, successfully integrate HRA and achieve the related cost synergies, begin implementing the supply chain reinvention program with an eye to enhanced gross margins and to continually improve our organization and our culture. And of course, we will remain mindful of the difficult headwinds we and everyone else face in the short term. We will continue to adjust to handle those headwinds. But my big message is the tremendous future that has been set up for Perrigo and how it is all coming together as originally planned.
With that, I'll turn the call over to our CFO, Eduardo to discuss the financials in more detail. Eduardo?
