With the strong Q3 gross margin expansion, our fiscal year-to-date gross margins grew by 20 basis points to 64.4%. And with further gross margin expansion expected in Q4, even if more moderate than in Q3, we continue to expect modest gross margin expansion in fiscal year ’24. We remain focused on executing on our multi-part, multi-year gross margin attack plan, as we drive our gross margins to the mid to high-60s in the next few years. Let me now walk you through our marketing investments. In Q3, A&CP investments represented approximately 28% of sales, increasing approximately 1 percentage point from the prior year. We are continuing to both support core icons and invest behind new launches like Infiniment Coty Paris, Marc Jacobs Daisy Wild and Cosmic Kylie Jenner for Prestige, and CoverGirl Simply Ageless Essence and Rimmel Wonder Bond Mascara for Consumer Beauty.
We continue to expect A&CP to be in the high-20s percentage level of sales in full-year fiscal ‘24 and beyond Moving tour profit delivery for the quarter. Our Q3 adjusted operating income grew a strong 17%, driving 90 basis points of margin expansion. Our Q3 adjusted EBITDA grew 10% year-over year to $200 million, with the Q3 adjusted EBITDA margin increasing 30 basis points to 14.4%. Our year-to-date adjusted operating income grew 19%, resulting in an 80 basis point increase in year-to-date adjusted operating margin. And adjusted EBITDA totaled $927 million, growing 15% from the prior year, with the adjusted EBITDA margin up 30 basis points, at the upper end of our full-year guidance. We continue to expect strong income growth and margin expansion going forward.
And, that brings me tour adjusted EPS Excluding the impact from the equity swap, our Q3 adjusted EPS totaled $0.06. Our headline diluted adjusted EPS of $0.05 included an EPS hurt of $0.01 from the mark-to-market on the equity swap due to the stock price decrease in Q3. Fiscal year-to-date, our adjusted EPS excluding the swap totaled $0.041 and grew by 8% year-over-year. Our headline fiscal year-to-date EPS included a $0.02 per share negative impact from the mark to market on the equity swap. Looking ahead to fiscal year ‘24, I would like to outline certain drivers of our adjusted EPS. First, we continue to expect depreciation to be in the $230 million to $240 million range. Second, we continue to anticipate net interest expense for the year to be in the mid $200 million.
Third, we anticipate the adjusted effective tax rate for fiscal 2024 to be in the high-20s, including some potential discreet tax benefits in Q4, which we expect to balance the discrete tax hurts we incurred in Q1. Finally on fiscal 2024 share count, we executed the first tranche of our equity swap agreement of 27 million shares on February 22 at the very attractive price of $7.40, which partially benefited Q3 and will fully benefit Q4 share count. We expect to exit Q4 with a diluted share count of 875 million. Moving tour free cash flow Q3 is our seasonally weaker cash flow period, with outflow of $234 million this year. This compared to outflow of approximately $180 million prior year. The year-on-year decline in free cash flow in Q3 and fiscal year-to-date reflected to two key drivers.
First, the payment of income taxes for prior years, which totaled over $50 million year-to-date; and second, the timing of working capital payments, pretax, which should reverse in Q4. Looking to the full-year, we expect our free cash flow to be solid and broadly consistent with fiscal ‘23 at approximately $400 million, as the strong profit expansion is balanced by a step up in cash tax payments related to prior year balances as well as higher working capital particularly as we’ve built up inventory to support our business in the current dynamic environment. In FY ‘25, free cash flow is expected to grow, on stronger profit and lower cash tax payments. Moving tour capital structure. We ended Q3 with net debt of approximately $3.7 billion.
As a result, our leverage at the end of the quarter was around 3.4 times, up from around 3.1 times at the end of Q2 due to the seasonally low Q3 cash flow coupled with the impact of the share buyback at a cash cost of $200 million. Factoring in our Wella stake, we ended the quarter with economic net debt of approximately $2.6 billion. We remain committed to reaching an investment grade profile, targeting leverage towards approximately 2.5 times exiting calendar ‘24 and towards approximately 2 times exiting calendar ‘25, which we believe we can reach through our organic free cash flow generation and EBITDA expansion. At the same time, we also continue to target divesting our Wella stake by end of calendar ‘25. Looking ahead, our strong continued progress on deleveraging and debt paydown support our expectation for our interest expense to steadily decline in the coming years I will now hand it back to Sue to review our strategic progress in the quarter
.: Regarding the conflict in the Red Sea and the Baltimore port closure, it is important to highlight that we currently see limited risk from these events as we have been using alternate routes and purchasing some safety stock. This inventory build does represent a moderate headwind to our free cash flow expectations for the year. Finally, with more elevated impact from excess & obsolescence in first-half ‘24, we see these headwinds moderating in H2 ‘24 and in to fiscal year ‘25 I will now provide an update on our All-in-to-Win program. In the third quarter, we delivered savings of approximately $25 million, bringing our fiscal year-to-date total savings to over $90 million. We are maintaining our savings target in fiscal ‘24 of $110 million to 120 million which reflects ongoing productivity projects whose savings are partially reinvested in our structural growth capabilities and teams, particularly in digital advocacy, skin care and retail.
Looking to next year, we reaffirm our fiscal ‘25 savings target of $75 million. In sum, having delivered approximately $700 million of savings life-to-date, we continue to optimize our processes and expenditures, positioning Coty to be flexible and fully equipped to invest in our strategic priorities. Moving tour gross margin performance. Q3 adjusted gross margin of 64.8% increased substantially by 190 basis points from last year, as we anticipated. Our Q3 adjusted gross margin improvement was driven by: Ongoing premiumization of the portfolio coupled with the benefit from carryover pricing. The positive impact of easing inflation and continuous supply chain productivity. While Q3 gross margin was negatively impacted by excess & obsolescence expenses, the trend has continued to improve over the course of the year.
With the strong Q3 gross margin expansion, our fiscal year-to-date gross margins grew by 20 basis points to 64.4%. And with further gross margin expansion expected in Q4, even if more moderate than in Q3, we continue to expect modest gross margin expansion in fiscal year ’24. We remain focused on executing on our multi-part, multi-year gross margin attack plan, as we drive our gross margins to the mid to high-60s in the next few years. Let me now walk you through our marketing investments. In Q3, A&CP investments represented approximately 28% of sales, increasing approximately 1 percentage point from the prior year. We are continuing to both support core icons and invest behind new launches like Infiniment Coty Paris, Marc Jacobs Daisy Wild and Cosmic Kylie Jenner for Prestige, and CoverGirl Simply Ageless Essence and Rimmel Wonder Bond Mascara for Consumer Beauty.
