Since March of 2020, we have invested more than $200 million in our people through programs such as paid sick leave, COVID-19 emergency pay and covering insurance payments and benefit deductions for team members who were furloughed.
In addition, these investments include the one-time bonus we announced today, totaling approximately $17 million, which will impact nearly 90,000 hourly team members.
Beginning Monday, every hourly team member, tipped and non-tipped, will earn at least $10 per hour, inclusive of tip income.
Additionally, we are committed to raising that amount to $11 per hour in January 2022 and to $12 per hour in January 2023.
In fact, a year ago, the top 10 entrees at Olive Garden accounted for about 48% of guest preference, and today they account for approximately 55%.
For example, at LongHorn Steakhouse, the number of total items with less than 1% preference is down to eight from more than 25 pre-COVID.
Third, we continue to deploy technology to improve the guest experience and build on the progress we have made over the last 12 months.
In fact, during the quarter, nearly 19% of total sales were digital transactions.
Further, 50% of all guest checks were settled digitally, either online or on our tabletop tablets or via mobile pay.
For example, across Darden, our hourly labor productivity has improved by over 20%, with some brands improving by well over 30% such as Cheddar's.
Year-to-date through the third quarter, Cheddar's has grown the restaurant level margins by over 300 basis points on a year-to-date sales retention of 75%.
When Cheddar's reaches 100% of the pre-COVID sales, we expect their restaurant level margins to be well in the high teens.
As we have mentioned previously, the simplifications across all of our businesses are expected to result in a 150 basis points of margin improvement with 90% of pre-COVID sales.
For the third quarter, total sales were $1.73 billion, a decrease of 26.1%.
Same restaurant sales decreased 26.7%.
EBITDA was $236 million, and diluted net earnings per share from continuing operations were $0.98.
Food and beverage expenses were 80 basis points higher than last year, primarily driven by investments in food quality and mix.
Restaurant labor was 20 basis points higher.
As Gene mentioned, we invested approximately $17 million in team member bonuses this quarter.
Excluding the team member bonuses, restaurant labor would have been 80 basis points favorable to last year.
The favorability to last year was driven by hourly labor improvement of 280 basis points due to efficiencies gained from operational simplifications Rick discussed.
Restaurant expense per operating week was 16% lower than last year, driven by lower workers' compensation, utilities, repairs and maintenance expense.
Restaurant expense as a percent of sales was 250 basis points higher than last year due to sales deleverage.
Marketing spend was $52 million lower than last year, with total marketing 200 basis points favorable to last year.
This all resulted in restaurant level EBITDA margin of 18.4%, only 150 basis points below last year.
Excluding the one-time hourly team member bonus, restaurant level EBITDA margin would have been even stronger at 19.4%.
We impaired one Yard House restaurant this quarter, resulting in a non-cash impairment charge of $3 million.
We finalized the legal recovery during the quarter, resulting in favorability of $16 million.
This favorability was partially offset by $8.8 million of mark-to-market expense on our deferred compensation.
Excluding these two items, G&A would have been $86 million this quarter.
Our hedge reduced income tax expense by $7.2 million, resulting in a net reduction to earnings after-tax this quarter of $1.6 million.
Our effective tax rate of 2.3% this quarter was unusually low due to two factors.
First, the tax benefit from the deferred compensation hedge I just mentioned reduced the tax rate by 5 percentage points.
Second, the stock option exercises this quarter drove approximately $7 million of excess tax benefit, reducing the tax rate by 4.8 percentage points.
After adjusting for these factors, our normalized effective tax rate for the third quarter would have been 12.1%.
We generated over $240 million of free cash flow this quarter, ending the third quarter with over $990 million in cash.
Therefore, we will return to our 50% to 60% dividend payout target applied to future earnings to determine our dividend.
To that end, the Board declared a quarterly cash dividend of $0.88 per share, matching our pre-COVID dividend level.
The ability to resume pre-COVID dividend levels just 12 months after suspending it is a testament to the strength of our business model and the durability of our cash flows.
And finally, today we announced a new share repurchase authorization of $500 million which replaces all previous authorizations.
As of today we have 99% of our dining rooms open with some capacity.
Taking that all into consideration, we currently expect, for the fourth quarter, total sales of approximately $2.1 billion, EBITDA between $345 million and $360 million and diluted net earnings per share from continuing operations between $1.60 and $1.70 on a diluted share base of 132 million shares.
We've also updated our full year outlook for capital expenditures to be between $285 million and $295 million, and we anticipate opening 33 net new restaurants for the year.
We continue to believe we can achieve pre-COVID EBITDA dollars on 90% of pre-COVID sales, resulting in 150 basis points of EBITDA margin growth, and our Q4 outlook falls within this framework.
We expect total capital spending between $350 million and $400 million and open approximately 35 new restaurants in fiscal '22.
We also anticipate an effective tax rate in the range of 12% to 13% for fiscal '22.

Summary:
For the third quarter, total sales were $1.73 billion, a decrease of 26.1%.
EBITDA was $236 million, and diluted net earnings per share from continuing operations were $0.98.
And finally, today we announced a new share repurchase authorization of $500 million which replaces all previous authorizations.
Taking that all into consideration, we currently expect, for the fourth quarter, total sales of approximately $2.1 billion, EBITDA between $345 million and $360 million and diluted net earnings per share from continuing operations between $1.60 and $1.70 on a diluted share base of 132 million shares.
We've also updated our full year outlook for capital expenditures to be between $285 million and $295 million, and we anticipate opening 33 net new restaurants for the year.