In the Fossil brand, fourth quarter sales in traditional watches and jewelry were flat year-over-year and comparable retail sales in these categories were positive low single digits. Brand sales in leathers and smartwatches were down year-over-year. Underlying performance was supported by strong execution of our Made For You campaign, digital enablement tools, and a sharper product assortment, which drove better results in our direct-to-consumer channels. In Michele, our owned premium brand for women’s watches sales were up double digits as wholesale customers took advantage of better spending dynamics in this consumer segment. Turning to gross margins. Q4 gross margins were up 40 basis points versus last year. Most of the gross margin gains came from product margin improvement in our core categories, where initiatives from SKU rationalization, assortment architecture and reduced promotions in our direct-to-consumer channels drove better results.
Lower freight costs also contributed to the year-over-year gross margin improvement. Partially offsetting these gains were declines in gross margin in our smartwatch category and anniversarying gains from the settlements of forward currency contracts in the prior year period. SG&A expenses in the fourth quarter were down $25 million year-over-year or 11%. Reductions were primarily attributable to lower store operating costs on fewer stores as well as lower compensation and administrative costs resulting from our TAG initiative. Stepping back and looking more broadly at our TAG plan, with the organizational head count reduction in late 2023, we realized approximately $125 million in annualized benefits. Approximately $50 million was realized in year, which helps us drive an overall SG&A decline of 6%.
Restructuring costs incurred in fiscal year 2023 were $49 million. Now turning to our outlook for fiscal year 2024. In 2024, our outlook includes worldwide net sales of approximately $1.2 billion, with an adjusted operating margin of negative 3% to negative 5%. As Jeff shared, we are focused on executing our TAG plan and strengthening our balance sheet. Benefits from TAG are a critical component to driving improved financial performance in fiscal year 2024 and offset the underlying decline in revenue that we have forecast. Having captured approximately $125 million in annualized benefits in 2023, we are focused on capturing at least another $100 million in annualized benefits in fiscal year 2024, which would significantly accelerate our progress towards achieving our $300 million target.
Importantly, our guidance for fiscal year 2024 reflects our expectation that our TAG initiatives will help drive gross margin expansion and SG&A reduction versus the prior year. Gross margin improvement is primarily expected to be driven by sourcing benefits from our TAG initiatives, coupled with a continued focus on assortment architecture and SKU rationalization as well as product mix benefits resulting from minimal smartwatch sales in 2024. Lower SG&A in 2024 is expected to be driven by benefits from our TAG plan and lower store operating costs. Our net sales guidance of approximately $1.2 billion assumes approximately $100 million of negative impact from our store and concession closure plans and the lapping of last year’s smartwatch sales.
We anticipate that performance in our core traditional watch category will be down with comp growth in the Fossil brand, offset by declines in our largest license brands, in part due to brand repositioning, and also reflecting our expectation for softer consumer spending in our categories in Europe and in China. Additionally, we anticipate growth in traditional watches in India and other smaller but emerging markets. Looking at the cadence of the year, we expect Q1 sales to be the softest, partly due to timing of wholesale shipments between quarter one and quarter two with sequential improvement for the remainder of the year. We are also focused on strengthening our balance sheet to provide additional cushion to our liquidity. We are in the late stages of the process of receiving an approximate $56 million tax refund from the U.S. government associated with provisions in the CARES Act.
We are also actively pursuing financing options and monetization of our remaining two owned building assets in Europe. Free cash flow, which we defined as cash from operations less CapEx, is estimated to be positive in 2024, reflecting a modest reduction in working capital from lower inventory and the expected receipt of the tax refund I just described. 2024 will be a year of transition for Fossil Group as we are in the middle of our TAG program and continue to aggressively restructure our business model, lap the exit of less productive categories, rationalize our store portfolio and focus on stabilizing our core revenue trends in a challenging macroeconomic environment. With that, I’d like to turn the call back to Jeff for some closing remarks.
Jeff Boyer: Thanks, Sunil. As Sunil and I shared with you, we’re working diligently and taking prudent actions to stabilize the business and maximize shareholder value, all of which is underpinned by our commitment to returning Fossil Group to profitable growth as quickly as possible. Thank you to everyone for listening in today.
Operator:
