During the third quarter, we delivered 8.5% global retail sales growth, excluding foreign currency impact, driven by a combination of store growth and same store sales.
That 8.5% result was lapping a 14.8% from the third quarter of 2020.
The third quarter extended our unmatched streak of international same store sales growth to 111 consecutive quarters.
While our 41 quarter streak of positive same store sales in the U.S. ended during the quarter, I'm pleased that we still grew our U.S. retail sales during the quarter, while rolling over 21.3% retail sales growth in Q3 2020.
During the quarter, we also accelerated our pace of global store growth on a trailing four-quarter basis, we have opened 1124 net new stores, that's an increase of 500 relative to where we were in Q4 2020.
Overall, Domino's team members and franchisees around the world continue to generate healthy operating results, leading to a diluted earnings per share of $3.24 for Q3.
Global retail sales excluding the positive impact of foreign currency grew 8.5% in Q3 as compared to Q3 2020.
Breaking down total global retail sales growth, U.S. retail sales grew 1.1% rolling over a prior year increase of 21.3%.
International retail sales excluding the positive impact of foreign currency grew 16.5% rolling over a prior year increase of 8.5%.
During Q3, we continued our streak of 111 consecutive quarters of positive international comps.
Same store sales for our international business grew 8.8% rolling over a prior year increase of 6.2%.
The U.S. comp was negative in Q3 following 41 straight quarters of positive same store sales growth.
Same store sales in the U.S. declined 1.9% in the quarter rolling over a 17.5% increase in same store sales in Q3 of 2020, the highest quarterly U.S. comp we have ever achieved since becoming a publicly traded company in 2004.
Breaking down the U.S. comp, our franchise business was down 1.5% in the quarter, while our company-owned stores were down 8.9%.
Shifting to unit count, we and our franchisees added 45 net stores in the U.S. during the third quarter, consisting of 46 store openings and only one closure.
Our international business added 278 net stores comprised of 287 store openings and 9 closures.
Total revenues for the third quarter were up approximately $30.3 million or 3.1% over the prior year quarter.
Changes in foreign currency exchange rates positively impacted our international royalty revenues by $1.3 million in Q3.
Our consolidated operating margin as a percentage of revenues increased to 38.6% in Q3 2021 from 37.4% in the prior year, due primarily to higher revenues from our global franchise businesses.
Company-owned store margin as a percentage of revenues was flat year-over-year at 19.8%.
Supply chain operating margin as a percentage of revenues increased to 10.7% from 10.2% in the prior year quarter.
While the market basket increased 2.1% year-over-year, higher product and supplies expenses related to certain COVID related safety and sanitizing equipment negatively affected the supply chain operating margin in Q3 2020, which did not recur in the current quarter.
G&A expenses increased approximately $4.7 million in Q3 as compared to Q3 2020 resulting from higher travel and labor costs, including higher non-cash compensation expense, partially offset by lower professional fees.
Net interest expense increased approximately $7.1 million in the quarter, driven by a higher average debt balance due to our recent recapitalization transaction completed in Q2.
Our weighted average borrowing rate for Q3 decreased to 3.8% from 3.9% in Q3 2020 due to lower interest rates on our outstanding debt as a result of this recapitalization transaction.
Our effective tax rate was 10.7% for the quarter as compared to 19.9% in Q3 2020.
The effective tax rate in Q3 2021 included a 10.4 percentage point positive impact from tax benefits on equity-based compensation.
This compares to a 2.8 percentage point positive impact in Q3 2020.
Combining all of these elements, our third quarter net income was up $21.3 million or 21.5% versus Q3 2020.
Our diluted earnings per share in Q3 was $3.24 versus $2.49 in the prior year quarter.
Breaking down that $0.75 increase in our diluted EPS, most notably, our improved operating results benefited us by $0.36.
Our lower effective tax rate, primarily due to higher tax benefits on equity based compensation positively impacted us by $0.34.
A lower diluted share count driven by share repurchases over the trailing 12 months benefited us by $0.19 and higher net interest expense negatively impacted us by $0.14.
During Q3, we generated net cash provided by operating activities of approximately $189 million.
After deducting for capex, we generated free cash flow of approximately $172 million.
Regarding our capital expenditures, we spent approximately $17 million on capex in Q3, primarily on our technology initiatives, including our next-generation point-of-sale system and our new supply chain center.
As we discussed on the Q2 earnings call, we completed our $1 billion accelerated share repurchase transaction during Q3.
Subsequent to the settlement of the ASR, during Q3, we repurchased and retired approximately 153,000 shares for $80 million or an average price of $521 per share.
As of the end of Q3, we had approximately $920 million remaining under our current Board authorization for share repurchases.
We have continued to repurchase and retire shares subsequent to the end of the quarter and through October 12, we had repurchased and retired an additional 205,000 shares for approximately $100 million or an average price of $488 per share.
We also returned $35 million to our shareholders during Q3 in the form of a $0.94 per share quarterly dividend.
We previously provided guidance that our store food basket pricing in our U.S. system would increase approximately 2.5% to 3.5% over 2020 levels.
We previously provided guidance that foreign currency could have a $4 million to $8 million positive impact on royalty revenues as compared to 2020.
We previously provided guidance of $415 million to $425 million for G&A expense.
We continue to expect that our full year capex investments will be approximately $100 million.
Recall that the 53rd week last year contributed an incremental $0.39 to our earnings per share in Q4 2020 due to the additional week of revenues and the costs attributable to the 53rd week.
Retail sales grew 1.1% in the third quarter, lapping a 21.3% increase from Q3 2020.
Our 1.9% same store sales declined during the quarter, was offset by the positive impact of 232 net new stores that we have opened over the trailing four quarters.
Our 45 net new stores in Q3 was a sequential improvement over Q2, but still came in softer than we would like to see.
At 15.6% for Q3, we saw a sequential decline of the two-year stack when compared to the second quarter, bringing us back more in line with the two-year stack we saw in Q1 of this year.
In fact, we have many stores across the country that are consistently below 1 minute.
Just this past Monday, we went on air to launch three great new products to support our signature $7.99 carryout offer.
During this campaign, one out of every 14 digital delivery orders receives a free item.
Over the course of the campaign, Domino's and our franchisees will give away $50 million worth of surprise frees to delivery customers.
Our 16.5% international retail sales growth, excluding foreign currency impact, was supported by a very strong 8.8% comp.
When you look at it on a trailing four-quarter basis, excluding the impact of foreign currency and the 53rd week of 2020, Domino's International retail sales grew by 16.2%.
Q3 represented a 15% two-year stack, which was very consistent with the second quarter.
Our international master franchisees opened 278 net new stores during the quarter, which increased the trailing four-quarter pace to 892 stores for the international business.
This acceleration and international store growth combined with our U.S. store growth has driven the global pace of store growth back into our two to three-year outlook range of 6% to 8% global net unit growth.
I was also very pleased to see that we had only nine closures in international and only 10 closures on a global basis during the quarter.
At the end of the quarter, we estimate Domino's had fewer than 175 temporary store closures, with many of those located in India and New Zealand.
We successfully converted 52 stores in Poland as Dominion pizza rebranded to become part of the Domino's family.
This provides important scale for us in Poland, fast-forwarding us to 119 total stores in the market at the end of the third quarter.
We now have 24 international markets with 100 or more Domino's stores.
India resumed an impressive pace of store growth, while becoming the first Domino's market outside the U.S. to reach 1400 stores.

Summary:
Overall, Domino's team members and franchisees around the world continue to generate healthy operating results, leading to a diluted earnings per share of $3.24 for Q3.
Same store sales for our international business grew 8.8% rolling over a prior year increase of 6.2%.
Same store sales in the U.S. declined 1.9% in the quarter rolling over a 17.5% increase in same store sales in Q3 of 2020, the highest quarterly U.S. comp we have ever achieved since becoming a publicly traded company in 2004.
Our diluted earnings per share in Q3 was $3.24 versus $2.49 in the prior year quarter.
Our 1.9% same store sales declined during the quarter, was offset by the positive impact of 232 net new stores that we have opened over the trailing four quarters.
Our 16.5% international retail sales growth, excluding foreign currency impact, was supported by a very strong 8.8% comp.