Just 13 months ago, along with a new leadership team, we began the process of turning around this iconic company.
Tritan Renew uniquely offers Tupperware's ability to design clear or transparent products with 50% certified recycled content, without compromising on quality or clarity.
Historically, we have done 30 to 35 million per year in business-to-business partnerships.
This past weekend, Tupperware ran a future segment using limited products with a major home shopping channel, who has access to more than 92 million homes across the U.S. through various media channels.
In the U.S. and Canada market, sales increased 83%, and sales force activity was up 92%.
Tupperware Mexico had an 18% sales growth in the first quarter on a 6% growth in average active sales force.
The new leader of this market worked with me over the last 10 years, and I'm confident he will be able to work with the local sales force to increase sales and profitability.
In Brazil, sales increased 46% on an easy first-quarter comparison and was achieved through an increase in sales force activity of 40%.
And lastly, a key market in our loan-term growth plan in China, which declined 14% as active studios were down 7% versus last year.
Our first-quarter sales were 460 million, which was an increase of 20% compared with last year in local currency and up 22% on a reported basis.
and Canada, Mexico and Brazil contributed 74% of the dollar increase.
On a regional basis, North America increased 43%, South America increased 53%, Europe increased 12% and Asia was up 6%, excluding the negative impact from China's decline that you heard Miguel say.
These higher sales, coupled with our turnaround land cost savings led to a gross margin of 70.3%, 480 basis points higher than a year ago.
Of the improvement, 330 basis points was attributable to lower manufacturing costs.
Adjusted SG&A as a percentage of sales was 53.9% and reflected an 820 basis point improvement from last year.
Rightsizing efforts contributed 560 basis points and 310 basis points improvements are from lower promotional costs.
These improvements were partially offset by 50 basis points of higher distribution costs.
We estimate this incremental investment to be in the range of 30 to 35 million for the balance of 2021.
Additionally, through approximately 10 million of additional investments in our tax strategy, we believe we have the ability and opportunity to more quickly achieve a tax rate in the low 30 for the full year of 2021.
We expect these 2021 additional investments will result in SG&A in the mid-50% range in the near term.
Longer term, we will continue to pursue SG&A at sub-50% of sales through ongoing centralization efforts, creating centers of excellence to leverage our size, simplifying our compensation plans, and through sales growth in our omnichannel initiatives.
For the first quarter, the improvements in gross margin and SG&A that I just discussed, combined with our contribution margin on the 20% sales growth resulted in an adjusted operating income of 75.3 million or 16.4% of sales, which reflects a significant improvement of 1,290 basis points versus prior year.
In addition to the higher operating income I just mentioned, Q1 EBITDA was favorably impacted by a one-time gain on sale of assets of $9 million, a $3 million benefit related to a grant from the China government normally received in the fourth quarter and a bad debt reversal in Germany of 2 million.
The improvements in the operations, higher sales and higher margins led to a GAAP diluted earnings per share in the first quarter of $0.85.
This is a dramatic turnaround from the loss of $0.16 in the first quarter of 2020.
And adjusted earnings per share of $0.82 also improved significantly compared to just $0.09 last year.
The $0.73 of improvement in adjusted earnings per share includes $0.69 of turnaround plan savings profits associated with the growth in sales and less COVID-19 impact.
$0.07 related to the China grant and the reversal of the bad debt reserves.
Offset by $0.03 of acceleration of interest related to the debt repayment, which I'll discuss in a minute.
In the first quarter, our total balance of debt was 695 million, reflecting a reduction of nearly 300 million from the 991 million in the first quarter of last year.
In addition to the proactive actions we took in 2020 to reduce and restructure our debt, in the first quarter, we used the proceeds of approximately 34 million from the sale of noncore assets to pay down our term loan debt.
The debt reduction, together with strong improvement in EBITDA, resulted in a debt to adjusted EBITDA ratio for debt covenant purposes of 2.36 versus 5.36 last year and well below our required covenant of four.
The debt reduction also triggers a favorable 50 basis point reduction in our new term loan interest rate effective during the second quarter.
We expect the rate to decline from 9.75% to 9.25% on 240 million of term loan debt.
Achieving double-digit growth for the third consecutive quarter, delivering profits that continue to reflect our rightsizing efforts and lowering our debt through the proceeds of noncore asset sales, resulting in a leverage ratio of 2.36 are continued evidence that our turnaround plan is working.

Summary:
Our first-quarter sales were 460 million, which was an increase of 20% compared with last year in local currency and up 22% on a reported basis.
For the first quarter, the improvements in gross margin and SG&A that I just discussed, combined with our contribution margin on the 20% sales growth resulted in an adjusted operating income of 75.3 million or 16.4% of sales, which reflects a significant improvement of 1,290 basis points versus prior year.
The improvements in the operations, higher sales and higher margins led to a GAAP diluted earnings per share in the first quarter of $0.85.
And adjusted earnings per share of $0.82 also improved significantly compared to just $0.09 last year.