In the third quarter of 2021, sales grew 20% year-over-year, with strong performances across North America and the International segments and with growth across all brands, channels and price points.
Adjusted earnings per share for the third quarter was $0.88, an increase of 19% versus the same period last year.
I should also note that we've grown sales and adjusted earnings per share double digits for nine out of the last 10 quarters.
During the last 12 months, we've allocated over $1 billion in capital acquiring Dreams, repurchasing shares, paying dividends and investing in our ongoing operations.
In the third quarter, we opportunistically repurchased $190 million of our shares, bringing our total share repurchase over the last 12 months to approximately $700 million at an average price of $36 per share.
Regarding recent investments in the business, over the last 12 months, we've opened three new manufacturing facilities.
The next highlight is our worldwide wholesale business, which grew a robust 11% this quarter as compared to the same period last year.
Across both brands, our total backlog has increased from the end of the second quarter by about $100 million as of September 30, 2021.
Our direct-to-consumer business had another record quarter, growing 79% over the third quarter of 2020 and growing 17% excluding the Dreams acquisition.
With this quarter's strong performance, our third quarter direct-to-consumer sales has grown a compound annual growth rate of 45% over the last five years.
On an annual run rate basis, our direct channel is now on track to generate over $1 billion of sales.
We estimate that it was about $100 million.
Considering this and the unrealized sales from our increased backlog, our sales could have been higher by over $200 million this period.
I'm pleased to reaffirm our expectations that 2021 sales will grow approximately 60% over 2019, a period not impacted by COVID.
Another 35% of our growth is derived from our M&A activities and share gains from previously untapped addressable markets.
We estimate only about 15% of our expected two-year growth comes from the broader industry.
Sales increased 20% to over $1.3 billion.
Adjusted EBITDA increased seven percent to $298 million.
And adjusted earnings per share increased 19% to $0.88.
This accounts for 350 basis points of the year-on-year change in consolidated gross margins for the quarter.
Net sales increased 13% in the third quarter.
On a reported basis, the wholesale channel increased 12% and the direct channel increased 20%.
North American adjusted gross profit margin declined 490 basis points to 39.9%.
We have implemented several pricing actions over the last 12 months to offset rising input costs.
North America third quarter adjusted operating margin was 21.2%, a decline of 260 basis points as compared to the prior year.
Net sales increased 73% on a reported basis, inclusive of the acquisition of Dreams.
On a constant currency basis, International sales increased 72%.
As compared to the prior year, our International gross margin declined to 54.6%.
Our International operating margin declined to 22.1%.
We generated strong third quarter operating cash flows of $285 million.
At the end of the third quarter, consolidated debt less cash was $1.9 billion, and our leverage ratio under our credit facility was 1.7 times.
Second, we issued an $800 million three 7/8% 10-year bond, which was significantly oversubscribed by the market.
This bond secures our long-term flexibility at historically low rates and resulted in record liquidity of $1.2 billion at the end of the third quarter.
This transaction will have the near-term impact of an incremental $7 million of interest in Q4 2021.
We currently expect 2021 sales growth to exceed 35% and adjusted earnings per share to be between $3.20 and $3.30, for a growth rate of 70% at the midpoint.
I want to note that this expectation on adjusted earnings per share includes a headwind of $0.03 from the increase in interest expense I noted before.
At the midpoint of our guidance, this implies EBITDA to grow over 30% in the fourth quarter versus the prior year Lastly, I'd like to flag a few modeling items.
For the full year 2021, we currently expect total capex to be between $140 million and $150 million, D&A of about $180 million, interest expense of about $62 million, a tax rate of 25% and a diluted share count of 204 million shares.
In 2020, we recognized whitespace opportunity for Tempur Sealy in the OEM market and successfully generated $150 million in sales in our first year.
We believe that we can grow our sales by 400% to $600 million by 2025 due to continuing -- continuation of utilizing our best-in-class manufacturing and logistics capabilities to manufacture non-branded product.
This will allow us to earn our fair share of approximately 20% of the bedding market we believe is serviced by OEM.
We currently operate over 600 retail stores worldwide and see opportunities to further increase our store count organically, about double digits annually for the next several years.
We also expect our new U.S. foam-pouring facility to allow us to hire approximately 300 local employees.
Our average annual salary for our U.S. manufacturing employees is above the national average, and it's about $42,000 a year.

Summary:
Adjusted earnings per share for the third quarter was $0.88, an increase of 19% versus the same period last year.
Another 35% of our growth is derived from our M&A activities and share gains from previously untapped addressable markets.
Sales increased 20% to over $1.3 billion.
And adjusted earnings per share increased 19% to $0.88.
We currently expect 2021 sales growth to exceed 35% and adjusted earnings per share to be between $3.20 and $3.30, for a growth rate of 70% at the midpoint.