Our business has demonstrated resilience and we remain confident in our ability to deliver on Polaris strategy.
Our '21 results demonstrate the progress we've made with our Polaris strategy operating in a better economic environment as well as the strength of our digitally led omnichannel model.
Comparable, owned plus licensed sales increased 8.7%, an improvement in trend from the 5.9% increase we saw in Q2, even after adjusting for changes in our marketing calendar.
Adjusted diluted earnings per share was $1.23, up significantly from Q3 2019 and adjusted EBITDA was more than 2 times better than 2019.
Gross margin for the quarter improved by approximately 100 basis points driven by stronger regular price selling, fewer markdowns due to leaner inventories and a number of pricing and promotion initiatives and offset by increased delivery expenses.
Significantly, as a result, we don't expect to be materially impacted by supply chain issues during the critical holiday shopping season.
Total Company AUR was up more than 12% across our three nameplates.
Looking at each of our nameplates, comparable sales for Macy's brand were up 8.4% on an owned plus licensed basis which represents a nearly 1 point improvement versus last quarter, when you take into consideration, the friends and family marketing shift.
Macy's brand full price sell-through improved 610 basis points while full price AURs increased by 6.9% driven by high demand and our gross margin initiatives.
Our Bloomingdale's business performed well with comp sales on an owned plus licensed basis up 11.2%, which was in line with the second quarter.
Bluemercury continues to recover outperforming versus 2020, but was down 2.2% compared to the third quarter of 2019.
Turning to the health of our customer base, we brought in 4.4 million new customers into the Macy's brand, a 28% increase compared to 2019.
Approximately 30% of these new customers were dormant customers over the last 12 months who have now reengaged.
Star Rewards program numbers now make up nearly 70% of the total Macy's brand comparable owned plus-licensed sales, up approximately 10 percentage points compared to 2019.
During the quarter, we saw Platinum, Gold and Silver customers reengage with average customer spend in these tiers up 16% compared to the third quarter of 2019.
Bronze members who represent our youngest and most diverse loyalty tier continued to grow with the addition of 2.3 million members during the quarter and we're seeing average spend per customer increased 13%.
Bronze is one of our best customer acquisition vehicles with approximately 35% of members under the age of 40% and 57% ethnically diverse.
During the quarter, we had another important new brand partner, Fanatics which offers our customers, the largest selection of licensed sports products and increases our fan apparel offering 20 fold.
This expanded assortment drove a 22% AUR increase in sports apparel and head gear compared to 2019.
As a result of these and other investments digital conversion for the quarter was 4.25%, up 14% compared to the third quarter of 2020 and up 27% compared to the third quarter of 2019.
A good example of stores recovery is our backstage store within store format with sales up 24 percentage points compared to the full-line stores.
Backstage store customers are more diverse with 56% of customers ethnically diverse and have a higher spend.
We are also raising our minimum wage rate to $15 an hour which will be in effect nationally by May of 2022.
This will increase our average total pay for hourly colleagues to about $20 an hour.
In the quarter, net sales increased by $267 million or 5.2% to $5.4 billion while we posted comparable owned plus licensed sales of 8.7%.
The early start of our friends and family sale in late October contributed to this adding about 200 basis points to owned plus licensed sales comp.
Moreover, while digital sales continue to grow and store sales trends continue to improve, notably more than 70% of our omnichannel market saw overall sales growth over and above 2019 levels which represented approximately 85% of Macy's brand comparable owned-plus licensed sales.
In addition, an omnichannel view has also highlighted the need for us to take a second look at the timing of when we close approximately 60 remaining stores we previously planned to close this part of Polaris.
As a result, we expect to announce about 10 closures in January with more details on the remaining stores to come later in 2022.
We saw another quarter of rate expansion to 41%, an increase of 100 basis points compared to the third quarter of 2019.
We continue to generate very healthy merchandise margin which improved by 270 basis points to 45.3%.
Delivery expense was 4.2% of net sales, 170 basis points higher than the third quarter of 2019.
With regards to inventory productivity, inventory levels were down 15.4% compared to the third quarter of 2019, a product of ongoing market dynamics and our own Polaris initiatives.
Inventory churn for the trailing 12 months improved by nearly 18%, while for the trailing six month, inventory churn improved by approximately 22%.
SG&A expenses of $2 billion improved by about 10% or $229 million from the third quarter of 2019 levels.
As a percent of net sales, SG&A expenses were 36.3%, a significant improvement of 630 basis points compared to the third quarter of 2019 as we continue to benefit from permanent cost savings and reduced cost due to elevated job openings.
Improved bad debt levels driven by strong customer credit health continued to contribute to the growth of credit card revenues to $213 million, up $30 million from the third quarter 2019 and ahead of what we expected.
Credit card revenues were also ahead as a percent of net sales increasing by 40 basis points to 3.9% and trending ahead of our prior annual guidance.
That said, over the next few years, we expect credit card revenue levels will be slightly lower as a percent of sales in the 3% or so that we have historically experienced.
Given our strong performance across these areas as well as the $50 million of asset sale gains recognized during the third quarter, we generated positive adjusted EBITDA of $765 million.
Notably, adjusted EBITDA margin of 14.1% exceeded the margin in the third quarter of 2019 by 780 basis points on the strength of expense management discipline and gross margin expansion.
After accounting for interest and taxes, collectively, these results helped to generate quarterly adjusted net income of $386 million and adjusted diluted earnings per share of $1.23 versus $21 million and $0.07 respectively in 2019.
Our final value creator is capital allocation and our meaningful free cash flow generation of $574 million year-to-date has served us well in this regard.
In the third quarter, we repaid approximately $1.6 billion of debt early, which brings our leverage ratio well under our year end target.
We will continue to pay down debt as debt matures with an aim to achieve a leverage ratio below 2 times in the upcoming years.
Additionally, we paid $46 million in cash dividends and announced our fourth quarter dividend earlier this month.
And we repurchased 13 million shares for more than 4% of total shares outstanding for a total share buyback of $300 million.
With $200 million of authorization remaining, we're trying to look for further opportunities to repurchase shares.
These actions underscore our confidence in our business and our commitment to our capital allocation priorities that create shareholder value in the near term and the long-term.
For the full year, we now expect net sales to be between $24.1 billion and $24.3 billion, which at the midpoint of the range is an increase of over $400 million from our prior guidance.
We now increased our adjusted earnings per share range to $4.57 to $4.76 from $3.41 to $3.75, an increase of more than a $1 compared to our prior guidance.
Comparable sales on an owned plus licensed basis versus 2019 are expected to increase between 2% and 4%.
This includes an approximately 125 basis point adverse impact due to the shift of the friends and family promotional event from the fourth quarter into the third quarter as compared to 2019.
Gross margin rate expectations are between 100 basis points and 150 basis points lower than 2019.
SG&A expense as a percent of sales is expected to improve by approximately 75 basis points compared to 2019 and adjusted diluted earnings per share is expected to be between a $1.67 and $1.87 events excluding the impact of any additional share repurchases other than those already executed in the third quarter.

Summary:
Our business has demonstrated resilience and we remain confident in our ability to deliver on Polaris strategy.
Our '21 results demonstrate the progress we've made with our Polaris strategy operating in a better economic environment as well as the strength of our digitally led omnichannel model.
Significantly, as a result, we don't expect to be materially impacted by supply chain issues during the critical holiday shopping season.
Turning to the health of our customer base, we brought in 4.4 million new customers into the Macy's brand, a 28% increase compared to 2019.
A good example of stores recovery is our backstage store within store format with sales up 24 percentage points compared to the full-line stores.
With regards to inventory productivity, inventory levels were down 15.4% compared to the third quarter of 2019, a product of ongoing market dynamics and our own Polaris initiatives.
After accounting for interest and taxes, collectively, these results helped to generate quarterly adjusted net income of $386 million and adjusted diluted earnings per share of $1.23 versus $21 million and $0.07 respectively in 2019.
These actions underscore our confidence in our business and our commitment to our capital allocation priorities that create shareholder value in the near term and the long-term.
We now increased our adjusted earnings per share range to $4.57 to $4.76 from $3.41 to $3.75, an increase of more than a $1 compared to our prior guidance.