Operator
Good day, ladies and gentlemen, and welcome to Reynolds American Second Quarter Earnings Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to introduce Mr. Morris Moore, Vice President of Investor Relations. You may begin.
Morris Moore
Good morning, and thank you for joining us. Today, we'll discuss Reynolds American's results for the second quarter and first half, as well as our revised outlook for the full year. We'll focus our discussion on adjusted results as management believes this better reflects the underlying business performance. A reconciliation of reported to adjusted earnings is in our press release, which is on our website at reynoldsamerican.com.
With me this morning are RAI's President and CEO, Dan Delen; and Tom Adams, our CFO.
The information we're about to discuss includes forward-looking statements. When we talk about future results or events, a number of factors could generate results materially different from our projections today.
These factors include, but are not limited to, items detailed in our press release and SEC filings. Except as provided by Federal Securities laws, we are not required to publicly update or revise any forward-looking statement. and now I'll turn the call over to Dan.
Daniel Delen
Good morning, everyone. Reynolds American delivered higher earnings in the second quarter as its operating companies key brands made additional gains despite the challenging economic and competitive environments.
Both of our reportable business segments continue to execute their business strategies effectively. With R.J. Reynolds growth brands increasing their combined market share and American Snuff reporting excellent growth in volume, share and operating margin.
At Santa Fe, I'm pleased to say second quarter results were strong. Once again, the company generated growth in volume, share and earnings. As we reported today, RAI's first half results allowed us to tighten our earnings projections for the full year.
RAI and its operating companies continue to demonstrate strength and resilience despite significant competitive activity in the second quarter and the ongoing weak economy.
As a result, we remain on track to deliver 2011 adjusted EPS growth in the mid- to high-single digits. This range excludes the charge for the Scott smoking cessation lawsuit in Louisiana, as well as implementation costs related to plant closings and tax items recognized in the first half of the year.
Over the long term, our strategy is straightforward and bold. RAI and its operating companies are focused on leading transformation of the tobacco industry, while continuing to deliver outstanding results for our shareholders. We continue to drive innovation across our businesses, with a commitment to redefining enjoyment for adult tobacco consumer.
Now I'll provide additional details on our operating companies. R.J. Reynolds' second quarter adjusted operating income was down slightly in both the second quarter and for the first half. Gains in the company's growth brands were offset by cigarette volume declines in its support and non-support brands. The cigarette category continues to demonstrate good pricing power as evidenced by the price increase that R.J. Reynolds took early this month.
I would also note that R.J. Reynolds remained focused on achieving the right balance between profitability and market share growth. Competitive promotional activity increased significantly with the timing of promotional cycles in April and May, while R.J. Reynolds had relatively normal promotional levels in the quarter.
The company's total second quarter cigarette market share was down half a percentage point at 27.4%. However, if we exclude the private label brands that have been delisted as part of the company's portfolio simplification efforts, it's total cigarette market share was in line with the prior year quarter at 27.3%.
R.J. Reynolds' growth brands, Camel and Pall Mall, continued to perform well in the second quarter. Their combined market share increased 1.5 percentage points from the prior year quarter to 16.3%. And these 2 brands accounted for almost 60% of the company's total cigarette volume in the quarter.
Camel's second quarter cigarette market share was steady at 7.8%, which is good performance, especially for premium priced brand in this challenging environment. R.J. Reynolds continue to focus on building brand equity for Camel. The brand's most recent promotion, the Hump Day Sweepstakes campaign started in March. And the response from adult tobacco consumers to this web-based initiative have been nothing short of fantastic.
Indeed, this is the company's most successful promotion in recent years, with more than 1 million visits to the brand's websites. A key driver behind Camel's performance is its menthol styles, which use R.J. Reynolds' innovative capsule technology. Camel share of the growing menthol market increased by 0.3 of a percentage point in the second quarter and now stands at 2.1%.
R.J. Reynolds will continue to build momentum with next week's national expansion, Camel Crush Bold. This one additional SKU also uses the capsule technology and offers a richer, more full-bodied tobacco taste. I would also point out that this is R.J. Reynolds' first new national cigarette line extension since Camel Crush went national 3 years ago.
The company expects this new style to drive additional growth and further broaden the appeal of the Camel brand.
Now moving to Camel's modern smoke-free tobacco products. Camel SNUS again performed well in the second quarter. Its interest continues to grow in this convenient smoke-free option for adult tobacco consumers. As we mentioned last quarter, R.J. Reynolds introduced 2 new Camel SNUS styles in lead market, SNUS mint and Frost Large. Although they've been in the markets for only one quarter, they're showing encouraging results. These 2 styles offer adult tobacco consumers more options to try and ultimately switch to this innovative product.
In addition, the company launched the Camel SNUS Pleasure Switch Challenge promotion, which is also increasing the brand's awareness and trial.
On Camel's line of dissolvable tobacco products, these products, Orbs, Sticks and Strips, were refined and improved and introduced in 2 new lead markets in March. The products are attracting good consumer interest and the company continues to gain valuable insights about this new category.
Now turning to R.J. Reynolds second growth brand. Pall Mall reported another excellent quarter, delivering double-digit volume growth and increasing its market share by 1.5 percentage points. The brand achieved an 8.5% share of market for the quarter. This high-quality, longer-lasting cigarette has proven to be a very popular choice for adult smokers taking value, especially in this weak economy.
This distinctive blend of quality and value offers a strong foundation for Pall Mall's long-term success. So in summary, R.J. Reynolds demonstrated strength and resilience in the face of some strong headwinds in the quarter and is well positioned for growth in the remainder of the year. Now turning to American Snuff.
I'm pleased with the company's solid underlying performance in the quarter despite low price line extensions of premium brands and significant promotional activities on deep discount brands. I would note that the sale of Lane in February negatively impacted the earnings comparison for the quarter, and Tom will give you more details on that in just a moment.
American Snuff's second quarter moist-snuff consumer offtake share performed extremely well, increasing 1.5 percentage points from the prior year quarter to 31.3%. This performance was driven by the company's flagship brand, Grizzly, which reported strong gains in both volume and share. Grizzly's momentum continued in the second quarter, with consumer offtake share increasing by 1.9 percentage points from the prior year. Grizzly now holds a 27.4% share of market. The brand continues to benefit from the strength and scale of R.J. Reynolds field trade-marketing organization that now also serves American Snuff.
Addition, the new retail moist snuff contracts that were introduced in the second quarter are giving Grizzly more retail space, as well as improved brand and pricing communication. This investment has better positioned the brand for continued long-term growth. And American Snuff continues to invest in the equity of Grizzly with promotions like its current "giving it to you straight" sweepstakes, which engages adult tobacco consumers in an exciting web-based campaign.
And the brand is planning activities to celebrate its 10th anniversary by September. Grizzly's post sales continued to be a key factor in the brand's strong performance. The growing pouch segment accounts for more than 9% of the moist-snuff category. Grizzly has also seen rapid growth in its pouch styles since their introduction just 3 years ago. I'm proud to say that Grizzly Wintergreen Pouches are the best-selling pouch styles in the market.
In summary, both American Snuff and R.J. Reynolds continued to successfully leverage their sound business strategies and grow their key brands while navigating through a challenging environment. Now Tom will provide some additional financial details. Tom?
Thomas Adams
Thank you, Dan. Good morning, everyone. During my discussion, I'll focus primarily on adjusted results to provide perspective on our underlying business performance. Reconciliations of adjusted-to-reported results are in our press release, which is on our website. RAI have a solid quarter posting adjusted earnings per share of $0.67, up 1.5%. Higher pricing and moist-snuff volume gains more than offset cigarette volume declines. These adjusted results reflect the impact of the Lane sale and exclude a charge of $0.15 per share related to the Scott lawsuit.
On a reported basis, RAI second quarter earnings per share was $0.52, down 10.3% from the prior year quarter. For the first half of 2011, adjusted earnings per share was $1.26, up 4.1% from the prior year period. This adjusted results exclude the second quarter charges I just mentioned, as well as first quarter tax items.
In addition, there were prior year charges for plant closings and the single sales force implementation. RAI's second quarter adjusted operating margin was 30.1%, in line with the prior year quarter. First half adjusted operating margin was 29.9%, up 0.5% from the prior year period.
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