In fact, 90% of the top brands at Nordstrom are also sold at the Rack.
Rack's top 50 brands represented approximately 50% of sales in 2019.
Year to date, these brands represented only 42% of sales, highlighting the outsized gap in merchandise availability.
Second, our mix has skewed too far to lower prices at the Rack, with AURs declining 4% versus 2019.
In response to macro-related supply chain challenges, we have identified various ways to improve our internal network and processes by diversifying our carrier capacity, gaining better end-to-end visibility of inventory as it moves through our supply chain, increasing velocity and throughput in our distribution and fulfillment centers, and better positioning our inventory to get it closer to the customer.
Nordstrom banner sales returned to 2019 levels in the third quarter.
In the southern portion of the U.S. where 44% of our stores are located, Nordstrom comparable store sales grew 8% over the third quarter of 2019.
As a result, our suburban Nordstrom locations outperformed our urban locations by 1,300 basis points in the third quarter.
In our top 20 markets where our market strategy continues to gain traction, order pickup accounted for 12% of digital demand, versus 4% in other markets.
Since we launched order pickup at the Rack last year, we have seen 70% growth in the program.
For example, the average customer that shops across both banners, in-store and online, spends over 12 times more than a customer utilizing a single channel.
This quarter, digital sales increased 20% over the third quarter of 2019.
Digital sales represented 40% of our business in Q3, and we continued to drive growth over 2019 while store traffic improved sequentially.
Notably, the gross margins of our private label brands are, on average, 500 basis points higher than our third-party brand product.
This quarter, we continued to see strength in pandemic-related categories, particularly home and active, where our sales increased 95% and 57% respectively compared to 2019 levels.
Q3 loyalty sales grew 5% versus 2019, and loyalty penetration increased 2 percentage points to 65% of sales.
As we evolve our merchandising approach, our alternative partnership models have gained approximately 3 percentage points of total sales share since 2019 to nearly 8% today.
With Fanatics, we'll scale to 90,000 new customer choices on nordstrom.com, an increase of over 20% in our total choice count without a corresponding increase in owned inventory or labor.
Overall, net sales decreased 1% in the quarter compared to the same period in fiscal 2019.
The timing shift of the anniversary sale, with roughly one week falling into the third quarter of 2021, positively impacted third quarter sales by approximately 200 basis points.
Nordstrom Rack sales declined 8% as inventory procurement and flow challenges negatively impacted performance.
For the third quarter, digital sales increased 20% over 2019 and 16% after adjusting for the timing of the anniversary sale, reaching $1.4 billion.
Gross profit as a percentage of net sales increased 80 basis points compared with the same period in fiscal 2019, primarily due to leverage in buying and occupancy costs and higher merchandise margins.
Ending inventory increased 13% compared with the same period in fiscal 2019.
Looking ahead, we anticipate elevated inventory levels through the end of the fiscal year as we position product to meet customer demand and invest in pack-and-hold inventory for the Rack.
Total SG&A as a percentage of net sales increased 260 basis points compared to the same period in fiscal 2019 as a result of continued macro-related fulfillment and labor cost pressures, partially offset by continued benefit from resetting the cost structure in 2020.
We expect revenue growth of more than 35% versus fiscal 2020, and we are still projecting slight sequential top-line improvement from Q3 to Q4.
We expect to deliver EBIT margin of approximately 3% to 3.5% for the full year.
We're planning capital expenditures at normalized levels of 3% to 4%, with an emphasis on supporting supply chain and technology capabilities.
We made progress toward our goals, with strong digital growth and improving trends in our Nordstrom banner stores, and remain on track to deliver our fiscal 2021 targets and the commitments we set forth at our investor event, delivering EBIT margins greater than 6% and annual operating cash flow greater than $1 billion.

Summary:
In response to macro-related supply chain challenges, we have identified various ways to improve our internal network and processes by diversifying our carrier capacity, gaining better end-to-end visibility of inventory as it moves through our supply chain, increasing velocity and throughput in our distribution and fulfillment centers, and better positioning our inventory to get it closer to the customer.
Nordstrom banner sales returned to 2019 levels in the third quarter.
In our top 20 markets where our market strategy continues to gain traction, order pickup accounted for 12% of digital demand, versus 4% in other markets.
For example, the average customer that shops across both banners, in-store and online, spends over 12 times more than a customer utilizing a single channel.
This quarter, we continued to see strength in pandemic-related categories, particularly home and active, where our sales increased 95% and 57% respectively compared to 2019 levels.
Looking ahead, we anticipate elevated inventory levels through the end of the fiscal year as we position product to meet customer demand and invest in pack-and-hold inventory for the Rack.
We expect revenue growth of more than 35% versus fiscal 2020, and we are still projecting slight sequential top-line improvement from Q3 to Q4.
We made progress toward our goals, with strong digital growth and improving trends in our Nordstrom banner stores, and remain on track to deliver our fiscal 2021 targets and the commitments we set forth at our investor event, delivering EBIT margins greater than 6% and annual operating cash flow greater than $1 billion.