As mentioned earlier, SG&A expenses were down 3% versus last year. The reductions in SG&A can be traced to our TAG initiatives implemented during 2023, which has enabled us to reduce SG&A, offset underlying inflation, and partially reinvest in our FOSSIL relaunch. Taken together, adjusted operating loss was $31 million and adjusted operating margin was negative 9%. Turning to the balance sheet, we continue to make progress bringing down inventory levels and lowering working capital. Q3 inventory ended at $327 million, down 28% from last year’s levels, while working capital, excluding cash balances was down approximately 24% versus the prior-year quarter. The improvement in working capital has enabled us to cut operating cash use by just over $100 million year-to-date versus the prior year.
Ending cash was $116 million, and we had $23 million of availability under our revolving credit facility. Turning now to our outlook, we are revising our full year outlook for sales and adjusted operating margin to incorporate our third-quarter results and reflect a softening outlook for the fourth quarter. For the full year, we expect net sales to decline in the range of 14% to 17%, and we expect adjusted operating margin to be in the range of negative 6% to negative 8%. Let me outline some specific assumptions that are embedded in our outlook. We anticipate that net sales declines in Q4 will be negative 8% to negative 19%. This includes expectations for wholesale declines in the Americas and Europe, similar year-over-year impacts from our store closures and smart watch sales, partially offset by growth in global e-commerce sales.
Our guidance reflects prevailing currency rates, which includes a stronger dollar relative to our prior guidance. We estimate that prevailing rates would positively impact Q4’s net sales by 70 basis points compared to our prior estimate of a positive 350 basis point impact that was estimated based on prevailing rates at the time of our prior guidance. Our fourth-quarter guidance also includes the $10 million benefit from the timing shift of wholesale shipments that I previously mentioned. From an adjusted operating income margin perspective, our outlook reflects a range of flat to negative 5% for Q4, with SG&A dollars down versus prior year, driven by our TAG initiatives. Now turning to some additional commentary on our Transform and Grow Plan in 2024.
As a reminder, on our last call, we shared our expanded Transform and Grow Plan, which was the result of a comprehensive review of our operating model. The expanded program identified $300 million in overall annualized operating income benefits to be achieved by fiscal year 2025. First, we remain on track to achieve the original $100 million in annualized expense savings by the end of 2024 as outlined on our March earnings call. We expect to capture approximately half of that or $50 million of expense savings this year. These expense savings are primarily reflected in lower SG&A, which is enabling us to offset underlying inflation that was in our expense base and to a lesser degree, reinvest into our growth pillars. Second, since announcing the expanded plan on our last call, we have made significant progress on the newer initiatives we outlined, which ranged from simplification of our Oregon operating model, savings and product costing and indirect procurement, and better realized AURs through pricing and markdown management.
These efforts and the carryover impact from our original set of initiatives are laying the groundwork to realize operating income benefits of approximately $135 million to $150 million in 2024. Achieving this level of benefit will position us to deliver year-over-year operating margin improvement while allocating capital toward our strongest growth opportunities. The remaining $100 million to $115 million of expected benefits from tax are estimated to be realized primarily in 2025 with some carryover to 2026 providing further runway to improve our operating margins. With a clear multi-year roadmap in front of us, our near-term focus is on executing this holiday season and delivering on our Transform and Grow initiatives to drive operating margin benefits into 2024 and 2025.
With that, I’d like to turn the call back over to Christine to take us through some Q&A.
A – Christine Greany: Terrific. Thank you, Sunil. I’ll begin with a question for Kosta. What are the key strategies to stabilize sales and when do you expect to see an inflection point?
Kosta Kartsotis: Overall, we’re moving as quickly as we can to improve the business all across the enterprise. There are a number of TAG initiatives that we have in place that will drive higher sell-throughs and profitability, including SKU reductions, improved market pricing, lower product costs, better promotional management, higher gross-to-net profit capture. In addition, we will operate with lower expense structure. So, we are moving in the right direction. Also, we are going to lean more into our strengths. Our Fossil Brand, especially in traditional watches, the brand is showing strength, and we think that will continue. Also in our increasing digital capabilities, the investments we have made the past few years in people and technology have become a strategic advantage for the company that will have increasingly significant benefits.
We also have a significant opportunity overall in emerging markets as well as in our jewelry business, which presents a large opportunity for the company long-term. So overall, there is a lot of activity going on in the company, and we are making progress on many fronts, and our teams are focusing on strong execution and on improving the business.
