Total sales rose 10% to last year and were up 5% to Q3 2019 and we achieved our highest Q3 sales since 2014 despite industry wide supply chain constraints and removal of 1.1 million gross square feet from our store base last year.
Our largest and most established market, the U.S. outperformed with sales up 17% on a one-year and 12% on a two-year basis.
In addition, we also acquired roughly 2 million new customers globally, all very positive signs regarding the health of our brands.
By channel, store sales rose 11% from last year and declined 20% from 2019.
Digital, which for us, carries a significantly higher four-wall margin than stores grew 8% on a one-year and 55% on a two-year basis, representing 46% of total sales.
In spite those pressures, we grew our operating margin rate by 80 basis points on a one-year basis and 640 basis points on a two-year basis.
Hollister sales, which includes Gilly Hicks and Social Tourist rose 10% to last year and 1% to 2019.
In the U.S., sales rose 17% on a one-year and 7% on a two-year basis.
The launch, which generated over 20 million PR impressions included the bilingual made for TikTok album produced by the collective music creators.
The announcement made waves across the gaming new cycles garnering over 125 million PR impressions.
At the same time, our existing customers continue to come to us for her must haves including Go Active, which grew to over 20% of sales.
Hollister also partnered with Hulu on an ad by which drove roughly 90 million ad impressions.
Turning to Abercrombie, which includes kids, Q3 sales rose 12% compared to last year and 10% to 2019, representing our highest sales volume since 2015 and best gross margin since 2013.
In the U.S., sales rose percent on a one-year and 18% on a two-year basis.
After receiving thousands of submissions, which was 10 customers and brand fans to help drive fit and design decision and to be predominantly featured in our denim your way marketing.
Throughout the quarter, we also continue to leverage our relationship with TikTok, a highlight was our women's fall outfitting campaign, flashes of fall, which generated over 140 million impressions.
We are ready to compete and win for holiday and I'm confident in our ability to deliver an operating margin between 9% and 10% this fiscal year, which will be our best annual operating margin since 2008.
For Q3, total net sales were $905 million, up 10% to last year and up 5% to pre-pandemic levels.
Store sales rose 11% on a one-year basis and were down 20% on a two-year basis.
At the same time, total digital sales increased 8% compared to last year and grew 55% from 2019, representing 46% of total sales this quarter, compared to 31% in 2019.
By brand, net sales increased 10% for Hollister, which includes Gilly Hicks and Social Tourist and 12% for Abercrombie, which includes Kids.
As compared to Q3 2019, net sales increased 1% for Hollister and 10% for Abercrombie.
By region, we continue to see strong results in the U.S. with net sales up 17% and 12% on a one and two-year basis respectively.
Despite having roughly 140 fewer stores and over 20% less square footage in our U.S. store base as compared to Q3 2019.
In the U.S., Hollister was up 17% to 2020 and up 7% to 2019, while Abercrombie was up 19% and 18% respectively.
Outside of the U.S., we continue to see a slower recovery with EMEA down 6% to last year and 7% to Q3 2019.
In APAC, sales were down 12% to last year and down 32% to 2019 as we face traffic headwinds due to ongoing COVID cases inside China and Hong Kong and slow vaccination progress in Japan.
Our rate of 63.7% was down 30 basis points to last year and up 360 basis points to 2019.
The result exceeded our expectations and included approximately 300 basis points of impacts from higher freight costs and air utilization, which was at the low end of our 300 to 400 basis point expectation.
Excluded from our non-GAAP results are approximately $6.7 million and $6.3 million of pre-tax asset impairment charges for this year and last year respectively.
Operating expense excluding other operating income was up 8% compared to last year and up 1% to 2019, coming in at the low end of our expectation of up low-single digits.
In Q3, we saw an increase in store and distribution expense of 2% compared to 2020 and a reduction of 7% compared to 2019.
Compared to 2019, store occupancy was down approximately $43 million related to square footage reductions and renegotiated leases.
Marketing, general and administrative expenses rose 21% from last year and 28% to Q3 2019, primarily driven by increased marketing investments.
We delivered operating income of $79 million compared to operating income of $65 million last year and $27 million in 2019.
The effective tax rate was approximately 25%.
Net income per diluted share on an adjusted non-GAAP basis was $0.86 compared to $0.76 last year.
We ended the quarter with cash and cash equivalents of $866 million and funded debt of $308 million.
During the quarter, we repurchased approximately 2.7 million shares for $100 million, bringing year-to-date total share repurchases to about 6.1 million shares and $235 million.
Recently, our Board of Directors approved a new share repurchase authorization of $500 million, replacing the February 2021 share repurchase program.
In the fourth quarter, we expect to repurchase at least $100 million worth of shares pending market conditions and share price.
We continue to expect fiscal 2021 capex to be approximately $100 million, with about half of that related to digital and technology and the other half related to real estate and maintenance items.
During the quarter, we opened five new stores, bringing the total to 23 for the year-to-date period and closed three stores for a total of 23 year-to-date.
I'll finish up with our thoughts on Q4, which we are planning as follows using 2019 as our comparison period: net sales to be up 3% to 5% from 2019 level of approximately $1.185 billion.
Gross profit rate to be around flat to the 2019 level of 58.2%, including an expected negative impact of approximately $75 million of freight cost pressure due to rising ocean and air rates as well as higher air deliveries necessary to catch up on the Vietnam factory closures.
Operating expense excluding other operating income to be up low to mid single digits to 2019 adjusted non-GAAP level of $565 million.
Assuming we deliver against these expectations, we expect the full-year operating margin to be in the 9% to 10% range, our highest since 2008.

Summary:
For Q3, total net sales were $905 million, up 10% to last year and up 5% to pre-pandemic levels.
At the same time, total digital sales increased 8% compared to last year and grew 55% from 2019, representing 46% of total sales this quarter, compared to 31% in 2019.
Net income per diluted share on an adjusted non-GAAP basis was $0.86 compared to $0.76 last year.
Recently, our Board of Directors approved a new share repurchase authorization of $500 million, replacing the February 2021 share repurchase program.