David A. Chaika
Vice President, Treasurer and Investor Relations at Masco
Thank you, Keith, and good morning, everyone. As Renee mentioned, my comments today will focus on adjusted performance excluding the impact of rationalization and other onetime items. Turning to slide seven. Sales in the quarter decreased 10% and, excluding currency, decreased 11%. North American and International sales both decreased 11% in local currency. Our continued focus on operational efficiency helped drive gross margin expansion of 430 basis points to 35.8%. Our SG&A as a percent of sales was 18.2%.
Despite our decline in sales, operating profit in the third quarter was $348 million, down only slightly year-over-year. Operating margin expanded 170 basis points to 17.6%. This strong operating profit and margin performance was due to pricing actions, lower freight and commodity costs and cost-saving initiatives, offset by lower volumes, resulting in EPS growth of 1% to $1 per share. Lastly, in the third quarter, we received an insurance settlement in our Decative Architectural Products segment related to the severe weather event that occurred in Texas in 2021.
This weather event significantly impacted our suppliers' ability to produce the raw materials necessary for us to manufacture certain paints and other coating products. This settlement has been excluded from our results as a non-GAAP adjustment. Turning to slide eight. Plumbing sales in the quarter decreased 10% and, excluding currency, decreased 11%. Lower volume decreased sales by 14%, partially offset by net selling prices which increased sales by 3%. North American plumbing sales decreased 11% in local currency. International plumbing sales decreased 11% in local currency as demand continued to soften in many European markets and China.
Segment operating profit in the third quarter was $225 million, up $5 million year-over-year, and operating margin expanded 230 basis points to 18.9%. Operating profit improvement was driven by pricing actions, lower freight and commodity costs and cost-saving initiatives, partially offset by lower volumes. The completion of our Sauna360 Group acquisition had minimal impact on our results due to closing late in the third quarter. Turning to slide nine. Decorative Architectural sales decreased 10% for the third quarter. Paint sales declined high single digits with PRO paint sales decreasing low single digits against the mid-teens comp in the third quarter of 2022.
With a two-year PRO sales comp in the mid-teens and a three-year PRO sales comp of over 65%, we are clearly demonstrating the significant share we have gained and retained over the past three years. Operating profit was $144 million and operating margin expanded 110 basis points to 18.3%. Operating profit was impacted by lower volumes, partially offset by cost saving initiatives. We are also starting to see relief in certain paint input costs with modest low single-digit deflation in the third quarter, and we expect modest low single-digit deflation in the fourth quarter on these raw materials.
For the full year, we continue to anticipate low single-digit inflation for our paint raw material basket with second half deflation not fully offsetting first half inflation. Turning to slide 10. Our balance sheet remains strong with net debt-to-EBITDA at 1.7 times at quarter end and approximately $1.6 billion of balance sheet liquidity. Working capital as a percent of sales improved 40 basis points to 18.1%, and net working capital days improved by 12 days, primarily due to lower inventories.
With this improvement in working capital, net cash from operating activities year-to-date was $928 million, an improvement of $408 million compared to prior year. We expect free cash flow conversion to be approximately 110% for the full year. During the third quarter, we repurchased approximately 800,000 shares for $45 million. Share repurchases were lower in the quarter as a result of us completing the acquisition of Sauna360. We continue to execute on our disciplined capital allocation strategy and anticipate deploying approximately $500 million to share repurchases and acquisitions for the full year.
With the acquisition of Sauna360 for approximately EUR124 million and year-to-date share repurchases of approximately $125 million, we expect to deploy up to $225 million for share repurchases in the fourth quarter, subject to market conditions. This will bring our full year share repurchases to approximately $350 million. Now let's turn to slide 11 for our updated outlook for the year. For Masco overall, our top line is developing largely as expected, and we continue to expect sales to decline in the range of 10%. However, with our strong execution year-to-date and margin performance, we now expect full year margins to be approximately 16.5%, increase from our previous guide of approximately 16%.
In our Plumbing segment, we expect 2023 sales to be down in the range of 9% to 10%, improved from our previous expectation of down 10% to 12%. We also anticipate the full year Plumbing margins to improve and be approximately 17.5%, increase from previous guide of approximately 17%. In our Decorative Architectural segment, we continue to expect sales to be down in the range of 8% to 10%. However, we do expect our decorative margins to improve and be approximately 17.5%, increase from our previous guidance of approximately 17% due to cost-saving initiatives.
Finally, as Keith mentioned earlier, thanks to our strong execution, our 2023 EPS estimate is now $3.65 to $3.75, up from our previous guide of $3.50 to $3.65. This assumes a 24% effective tax rate and a $227 million average diluted share count for the year, which is slightly higher than the $226 million share count we guided to last quarter. Additional modeling assumptions for 2023 can be found on slide 14 of our earnings deck.
With that, I'd like to open the call for questions. Operator?
