In the third quarter of 2023, Mettler-Toledo faced macroeconomic headwinds with total third-quarter sales of $942.5 million, a decline of 5% in local currency terms, and 4% on a U.S. dollar basis. This sales figure is inclusive of a 1% benefit from currency effects. The marked decline in China, which saw a 25% drop in sales, was a key component of the reduced earnings, with the region of Asia and Rest of the World collectively experiencing a 14% drop in local currency sales. Comparatively, sales in Europe were up 4%, and the Americas slightly down by 3%. Despite these challenges, the company managed to maintain a stable year-to-date local currency sales growth of 1%, emphasizing the strength and resilience of their European market presence and service sales, which grew by 11% overall.
Breakdown by product area showed significant variability: Laboratory sales dropped by 9%, core Industrial slipped by 6%, and despite this, Food Retail surged by an impressive 49% mostly due to substantial project activity. Product Inspection remained stable with a modest 1% rise. The varied performance across product areas indicates a differentiated impact of the market's challenges and highlights avenues of growth for the company amidst economic uncertainty.
Mettler-Toledo has shown resilience in profitability, with a gross margin of 59.4%, a minor rise of 10 basis points, as the benefit of pricing was partially counterbalanced by the combined influence of volume decline, elevated costs, business mix, and currency fluctuations. Adjusted operating margin also improved by 20 basis points to 31.4%. However, adjusted operating profit did see a modest 4% decline due to prevailing market conditions and currency effects.
Adjusted free cash flow was recorded at $251.7 million, showing an improvement of $27 million, aided by a favorable working capital scenario, with cash flow per share growing by 32% year-to-date. The company also signaled effective capital allocation through a planned $900 million in share repurchases for the year 2023.
The guidance for the full year has been revised, anticipating a 1% decrease in local currency sales compared to the previous range of 0% to 1% growth. Adjusted EPS is expected to range from $39.10 to $39.30, reflecting a headwind of approximately 3% to 4% to EPS growth. Outlook for the fourth quarter is less optimistic, predicting a 7% to 8% decline in local currency sales and adjusted EPS of $10.50 to $10.70.
Looking toward 2024, the company's initial guidance suggests local currency sales will roughly remain flat and projected adjusted EPS of $39.10 to $39.80; translated to a growth rate of 0% to 2%, or 2% to 4% excluding adverse currency impact. This guidance indicates cautious optimism, with the company bracing for restrained customer spending and ongoing economic uncertainties, including an approximated 1% headwind to sales growth due to currency effects.