Grupo Casas Bahia S.A. (BHIA3) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for waiting. Welcome to the earnings call for the results in the second quarter of '25 for the Groupo Casas Bahia. [Operator Instructions] We'd like to let you know that this earnings call is being recorded and will be provided on the IR website of the company at ir.grupocasasbahia.com.br, where you will find the full material for the earnings call. You can download our presentation as well on the chat icon and in English as well. [Operator Instructions] We would like to highlight that the information in this presentation and possible statements that could be made during the earnings call related to business perspectives projections and operational targets and financial goals of the company represent assumptions of the company's management as well as information that is currently available. Future statements are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events, rely on circumstances that could or not occur. Investors must comprehend general economic conditions, market conditions and other operational factors can affect the future performance of the company and lead to results that differ materially from those listed in such future statements. Today, we have the presence of the company executives. Renato Franklin, the CEO; Elcio Ito, the CFO and IRO; and Gabriel Succar, the Investor Relations Director. Now I'll pass the floor on to Mr. Renato Franklin.

Hello. Good afternoon, everyone, and thank you so much for being with us today to keep us with the results in the second quarter of '25. We'll present here the consistent evolution in our operational indicators as well as in the company's financial structure. And I want to start off by saying that we have a big highlight this quarter, which is the conversion of BRL 1.6 billion of our debt into shares. This step is super important. And more important than the capital resource, really dropping a lot of leverage indicators that we'll see up ahead and also providing evidence on the confidence of Mapa Capital in the company's administration and the strategy we have here and all the support for management, and that will unleash the transformation plan. With this Mapa Capital through Domus Participacoes has 85.5% of the company's shares. And the main impact of this are on the right side. So the stability of the current management team is one of the factors, so we can continue to develop our work which is long term. And we've evolved and we've been very confident about our evolution so far, but we're also very conscious of this long-term plan with other milestones that have already been planned. But that we have planned to continue to deliver. And so this unleashes the lever that helps with the capital structure, and this was one more advance. Here we will also see reinforcement in our governance with our management growing from five to seven members and keeping up four of the current ones. So this provides evidence as well as contribution from the Mapa team and Mapa was a financial advisers company with partners that have a lot of experience in the market and that will help contribute in these other initiatives where we still have capacity to improve the capital structure, having a [ world-wide ] company that will evolve and so that we can really have a become a reference in operational efficiency and capital structure, generating sustainable value. So it's a long-term approach with a focus on governance and value creation. This is one of the main highlights of this conversion. Well, then about the highlights in the second quarter. Here, you can see the consistency of the deliveries with the discipline in this execution. Very conservative approach in credit granting, growth in -- with discipline. We've had seven quarters consecutively delivering evolution of EBITDA margins quarter-over-quarter. And the conversion we have already mentioned, the reduction of about 40% of the debt in the company. And we've been able to do this with GMV growth in all channels. So that also helps capture a little bit of this operational leverage. I want to highlight the free cash flow as well. That has improved consistently every quarter, BRL 173 million, and we know that we're on the right path, but there's still a lot to be done to reach the point we're in. Market share gains in all of the different categories in the company providing evidence about the strength of the brand and our commercial execution capacity and scale. And the relevance in the home appliance industry. And the engine is this growth really, which is our buy now, pay later [indiscernible] which has really potentialized the sales in physical stores and also in digital channels, BRL 630 million, 12% growth and NPL is under control. So on the next slide will give you a little more details on the [ GMV ]. First, 6.7% of the same-store sales. Even with deflation in certain categories, the market is going sideways with some categories especially when you look at the physical market, we grew same-store sales, gaining market share. And you could see this market share gain per category, as you can highlight on the white home appliance line. Then online when we announced in August 2023, the strategy to be a specialist, there was a concern in the market, removing the noncore categories. And then we demonstrate and start showing numbers that demonstrate the strength of a specialist player and so -- and such a strong brand like Casas Bahia. So we grow in 1P with online despite lower investments. And we grow in 3P, which is a core 3P. We don't have a generalist 3P with low average ticket. Our 3P is just complementary to the 1P mix we have. So special assortments that don't make sense or don't have enough scale or quantities, if it's just like a high-end niche product, we can sell through 3P. When it reaches scale and volume, then we have the commercial team buying this product and it becomes 1P. But it's definitely relevant for online and for the sales through the physical stores with 3P also delivering to customers or receiving at the store to be picked up a few moments later. So this is a very relevant shift in our trend, and we'll continue to see this growth at the same pace as the digital channel for the company. We can move on, please, to talk about the buy now, pay later [indiscernible]. The highlight here is what we had already mentioned. We're being very conservative in credit granting using our structure and model that's very robust and the strength of the brand that provides good customer loyalty. So the indicators show this, and we had growth of our production in the second quarter of '24. We grew even more in the fourth quarter to be able to have Black Friday. And we hope with 180 days, we throw in all of the losses to results, and we wanted to be sure of delinquency beforehand, right? We wanted to be a little more conservative because there could be worsening in the macro scenario that could lead to an impact in the NPL. But our concession is super robust. We've been growing at the best ratings. And you can see that there was a moment in the company where it was really stable with incremental improvements, stable NPL and the net losses also got better over time, bringing in benefits and helping us to enter in with another growth cycle in the [indiscernible] buy now, pay later. So that's gradual, of course, and we have to measure, wait for it to be concrete and then work on another level. We hope to -- we prefer to have a very consistent and incremental level than just trying something really big and then taking on risks that could be greater in this macro scenario that's a little more challenging. So we can move on to the next slide, please. So we have a slide where we compare the company's delinquency or NPL with the overall market. We got 2 rates at [ Banco Central ] and also for overdraft. And in both scenarios, you had a worsening of about 200 bps compared to last year. And when you look at the company, we are going from [ 8.5% to 8.4%. ] So that demonstrates the resilience of the company despite adverse scenarios. This is valid for the situation we had in Rio Grande do Sul as well now in the macro scenario with deterioration where we once again keep our conservative approach and unique performance in our credit business. So now we have our accountability for the transformation plan. Remember in August 2023, we presented the initiatives that would transform the company's operational results, and we listed some of the deliverables with a lot more levers, of course, but some of the main ones here to demonstrate the discipline in our execution and capacity for delivery and the team that's working on the turnaround. So the -- our portfolio increased -- the financial revenues grew 10%. The increase of penetration of the buy now, pay later [indiscernible] about BRL 280 million in digital and physical stores. CRM is generating over BRL 160 million in sales just in the second quarter of '25 and growing. So this really helps because a lot of these sales contribute to the growth of the buy now, pay later [indiscernible] and the digital solution also for more efficiency of the sellers as well. And that, of course, optimizes the free time of the sellers to bring in [ BRL 360 million ] additional sales this quarter, which helps us grow a lot. And in the bottom part, you that we can really talk about the significant reduction in the company's SG&A, BRL 160 million, if you look at this quarter. And it's already going to be about BRL 600 million in the year. And last year, we captured BRL 380 million. The first leap was very big. But we have been tightening up with our operational efficiency. We still have some tweaks to perform, but this is going to help us to capture operational leverage even more in the future. Overall, we had over 13,000 positions that we eliminated. And the labor claims was another big concern. Now it's a lot more controlled. We have a whole another level of expenses. We still have gains to be captured. But it's a long-term journey, and we have been continuing to work on this gradual evolution. We had 90 stores closed. We had constant discipline. 22 stores closed this quarter to assess the margins, and we won't have stores that have negative margins and 13 DCs that were reallocated. Well, about the capital structure. Every operational improvement every quarter of demonstrating this kind of improvement in line with what we had committed to in the previous quarters, has really brought credibility and reliability to improve our liabilities in our capital structure. So we presented the plan in August, and we had a follow-on to bring cash into the company to handle the cash needs and allow for some tough decisions at that moment. And with this evolution, we were able to unleash new cash. And we were able to deliver initial reprofiling with BRL 1.5 billion, and we delivered another quarter with reprofiling. A definite result, extending the company's debts to 6 years of duration and releasing the cash flow. Then in January '25, we were able to put into operation our FIDC to support the growth of the buy now, pay later [indiscernible]. And then in January '25, it started working formally, releasing and unleashing the growth of buy now, pay later. Now in August, September -- sorry in August '25, we had the anticipation of this conversion, and that helped unleash improve the working capital and releasing cash flow, which will bring in direct benefits for sure. And that considers the improvement of the rating, unleashing a cheaper credit facilities. And with that, we can reduce the more expensive ones. So when do we see this benefit? Well, this is -- since this happened in the third quarter, the direct benefit is normally captured in the fourth quarter. The lines that are being released, we already have some things that are taking place now, and we already started moving with the announcement of the anticipation of this conversion. But we're going to use this seasonality factor in the second half -- after Black Friday we'll reduce working capital lines, and that will, of course, improve the financial expenses of the company. Now here are the financial highlights, just a minute. So here, we're going to get into more details.

Okay. Thank you, Renato. Good afternoon, and thank you all for your presence. As Renato mentioned, the highlights in the quarter, well, they basically reflect the discipline and consistency of the execution of our plan. In the three scenarios as mentioned, reinforcing that we are so firm in our governance and keeping up with this plan where there is still a lot of initiatives underway, and so eventually they'll mature and bring in the results gradually, and that's what we hope to demonstrate from now on. Let's move on to the next page. This slide demonstrates the evolution span that we've been presenting with the big indicators for the seventh quarter consecutively. And then when it starts with the upper left graph for the third consecutive quarter, we had an advance in the net revenue with solid growth of 6% compared to last year. GMV is also growing at 6.7%, physical stores. And the recovery of the 1P and online from 10.4%. And we continue to accelerate the revenue in 3P by 15.5%. So once again, it's a 3P of core products and on long tails, where you have a level of competitiveness that you see. So here, you can see the core categories of the company and the upper right graph, which is the gross profit and growth of 3.8% in comparison annually and a margin of 30.1%, slightly below the period last year with a sales mix impact with a greater share of the phone segment on the average where it's a little lower than the average in the company. But as the segment grows, that's pushed downwards. And then, of course, we had a greater share of online, which grew with positive margins, but a little bit below the physical channel margins. So that's why our trend is always in the physical channel, but growing with online as well. So just a bit of this channel mix of sales mix. And -- but that's very healthy and beneficial to the company still. So on the bottom left side, you can see the operational expenses with a nominal reduction of almost 2%, with the reduction of the revenue by [ 3 -- by 6 ] and an average inflation of 5.5%, where we could consider the SG&A as a potential of this revenue. And so this performance demonstrates the ongoing gains we've been mentioning as we grow our revenue in a profitable manner that generates operational cash generation and also the control on costs and expenses, where we still have some screws to tighten, let's say, but clearly, a gain in the top line where you push the margins upwards and that's the result of this combination. On the bottom right graph, you can see the adjusted EBITDA of BRL 572 million, 26.5% higher than last year with an EBITDA margin of 8.3% versus 7% of the previous year. So the advances sequentially quarter-over-quarter of our results. And I'll go over another slide here just because similarly, you can see this biannual analysis. So as Renato mentioned here, we started the plan in August '23. And the first half of our plan, we had to restructure lots of things and work on different events that were nonrecurring in the results. But we have pretty good comparability in this -- with this semester versus the first semester of '24. The message is very consistent. Growth of 8% in our revenue, increase of 7.2% in the gross profit. SG&A is also reaching nominal levels that are lower, 1.8% improvement with the revenue and the EBITDA is growing 36%, [ BRL 313 million ] in the annual comparison, going up from 6.5% to 8.2%. So this growth is very strong in this 6-month period. But here, you have quarter-over-quarter the levers and a series of initiatives that take place and mature and granularly bring this in. We have no like silver bullet here. We just have different initiatives we're working on simultaneously. But we also want to talk about our evolution in the EBIT because it's been a lot more impactful when we look at BRL 69 million or 0.5% margin last year to BRL 570 million this year and a margin of 4.1%. So this is an increase of BRL 501 million and 3.6 percentage points. So to complete this on the right side graph, you have the net adjusted loss. And just to make it very clear, we had 2 adjustments. First would be the debt modification where you have the accounting on issuance when we had the reprofiling in the mark-to-market of this 10th issuance, which is noncash, nonrecurrent. And last year, we had a positive impact of BRL 637 million. And this year, it was negative by BRL 246 million. So in the first semester, as we always consider half year, right? So it's a noncash topic, and we're considering a variation of BRL 883 million. So this is the first financial adjustment we performed. And Item 2 has the monetary adjustments, contingencies, et cetera. And this year, with negative BRL 48 million. And last year, we had a benefit that was nonrecurring. It was a one-off benefit of the monetary update. And we just updated these 2 items. If you look at our financial statements, that's very clear and visible. But we leave this in basis and that are more comparable, and we'll see an improvement of the financial results of the company. Obviously, there's a bit of loss, but even in July, it will be 15%. So I think you have the improvement of the company as a whole, and it just becomes more and more evident considering the size of the loss that there's the main topic of the company is the capital structure. And so when we look at this scenario and maybe we can get into the next slide, if you look at the scenario, we performed the anticipation of the conversion that Renato mentioned of Series 2. And it's worth mentioning that originally, this option would only be exercised from October this year onwards with 6 quarterly windows, so there was no commitment, it could be performed from October onwards. But then amidst the scenario, we've seen we were able to complete 100% in August, which changes our indicators for leverage. So with this, our net debt reduced by 40%, going from [ 4.2 to 2.4 ]. The leverage metrics on the total capital that goes from 72% to 44% or at the metric of net debt-to-EBITDA of [ 1.8 to 1.1 ], which is an improvement that's very considerable. So this conversion brings automatic benefits that Renato has already mentioned BRL 230 million per year. However, maybe what's most relevant is the improvement of the capital structure as a whole that will generate other benefits. Greater offering and availability of credit as a whole with this pressure on the spreads. So when you look at the buy now, pay later [indiscernible] system, we don't have any restrictions for available credit in the [indiscernible] the buy now, pay later system because we're going to grow in a conservative approach, we have no restriction. What we're searching for now is as the credit profile in the company is lower and better. We try to compress a bit more of the spreads, which also helps monetize the assets and prices become more reasonable. So the sale of real estate assets as the credit in the company gets better, you start having prices in regards to your credit spreads that are better. And maybe especially in the reduction of some for [indiscernible] operations where we hope to have a gradual increase in the limits of the spreads with suppliers and insurances. So it's not very perceivable in the short term, but we do have a demand in the short term of volume in credit that's greater due to Back Friday and Christmas, but gradually, this scenario will evolve and enable good execution for the seasonality from now on. So we have an improvement in the capital structure as a whole. And naturally, that generates market flexibility financially in the company, and that's kind of what we need to work on. But what I think is the most important is despite this conversion, it's very relevant and very important, but we are also aware that there's an important path to go through this agenda, and we are very committed to continue to advance. So now we're advanced to the next page. Within this next page, we also had the reprofiling of our debt and bring in a little more safety to our cash flow with the reprofiling of Series 1, we postpone this till November '27, the payment of the principal amount and the interest for this debt. So you preserve the cash position at about BRL 400 million. Then to wrap up on our last slide here, which is our cash flow at BRL 173 million in the quarter compared to BRL 92 million in the same period last year. And here, you have some important discipline, whether it's the operational results or the CapEx, working capital, et cetera, we're always reflecting seasonality and the objective commercially and strategies and a lot of issues when it comes to labor claims, et cetera, that are, of course, all part of our free cash flow future, let's say. But we just consider this in the last quarters annually, and then the EBITDA looks pretty low to demonstrate that in some periods, we had higher EBITDA. But with the cash consumption that was also a lot higher than what we have now. So I think that was already evident, but we wanted to just share our guidance and this emphasis on the company's driver on cash flow. Now we're going to pass it back to Renato, and we'll get into the Q&A session soon.

Thank you, Elcio. So we can just reinforce the main message here, the key messages. So we highlight the consistent improvement of our margins with GMV growth, which is very relevant in a macro scenario where you don't have market growth. Online is growing a little bit more than physical and so it's natural that we as a specialist player with the share we have and the scale we have, bring a little more growth in online considering the -- but in the midterm, the priority is to grow the buy now, pay later, and also the capital structure that has an important advance that will on unleash other benefits, as Elcio has already mentioned. We can share a little bit of vision we have up ahead. So what's up ahead? Well, we'll continue with gradual growth in physical stores, basically levered by the buy now, pay later. We'll see digital gaining margins, growing and adding the buy now, pay later penetration, retail, media, et cetera as an important indicator. It's one of the ones that most grew, but it's still small considering the company's potential and a lot of growth opportunities. We continue to increase operational efficiency, keeping up space with AI and CRM, dynamic pricing has advanced a lot as well in all categories using AI as a resource for pricing, which brings us margin gains, and that offsets a bit of the mix effect of this process. So that's considering cash margin that's better, right? So then especially new opportunities for capital structure improvements. We have a complete awareness that what we did is transformational, but it's not enough to get to where we would like to. So the operational side will improve constantly. The company, of course, has to [ 2 ] digits in EBITDA margin, we've been working on evolving quarter-over-quarter, but also the capital structure that we want to work with, right? So we need to work with a very light balance sheet so we can generate value. And there are strategic value levers that involves some of our assets in our pipeline that will generate value and really help the company to deleverage gradually. So thank you all for your trust. Once again, we're super happy with this important step we took for having Mapa with us here. I'm really excited about what's coming ahead. So now we'll get into Q&A and we can get into more details about this point. So Gabriel, if you can conduct this.

Well, for sure, Renato. Well, our first question is from Danni Eiger at XP.

Congrats on the work you've done, the slide you presented is really impressive. But on my side, I have two questions. The first one is more growth and the sales dynamic generally. In the last quarter, you talked about the lack of consistency in consumption. You talked about February and March being very weak, and then May was very strong. And so we also wanted to hear from you guys, how you guys have been viewing this thermometer, right, from consumers. We understand that the high interest rates are a big challenge overall, especially for these more sensitive categories. So anything you can share with us would help, including what you've already seen and what you expect up ahead. So then my second question is still related to growth dynamic. Something that's very positive is that the credit indicators are very healthy even in this scenario where we would improve this very assertive model and you have a more restrictive credit policy, right? But considering this uncertainty scenario and higher interest with restricted consumption, do you imagine, you would maybe use this as a lever, of course, with controls. And gradually to sustain possible recovery in sales with a little more oxygen, let's say. So those are my two questions.

Great. Thank you for the question. And we'll start off talking about the sales dynamics. So last time, we were very -- we had this very evident dynamic. So April was really strong. We see July is going to be strong here. We had -- and e-commerce was growing more than the physical stores. So if we look at some numbers in the first semester, the electronics and home appliances are pretty flat. And the formal market numerous -- so some numbers that we received has some reliability. I talked about 25%, and we have some people that talking about 40%. So there's a big opportunity as long as you have this inspection and avoid parallel market, right? But with the exception of these external factors, July was pretty good. We're able to keep our pace and August was also very strong with Father's Day. So we've been able to gain share in June and August. And we are very excited with the third quarter to keep this consistency to work in these different categories a little better. And so when we started announcing this anticipation of the conversion, that was almost certain, right, and we're able to have pretty good reception from our suppliers. So we're more prepared -- and that would allow me to choose a bit more of what to buy because at some moments, we had to buy a little more of the mix where we had more credit and we maybe had to stop buying from some people for a little while, then we're also reducing this need of anticipation, right? So sometimes the limit increases because you have seasonality, et cetera. So the benefits also in the 4-phase credit line will only appear in '26 because up until the fourth quarter, that's consumed by new purchases and then we can exchange that and keep an additional limit and reducing this -- when we look at the credit, we don't see deterioration of our internal indicators, but we don't want to compensate this. So we're very careful in this first period. All of the indicators -- if you get BRL 600 million, that brings in a lot of returns. But we consider macro is still a bit of a risk aversion. And there's interest rates that are pretty high with a little less demand. And so there is a desire from consumers to buy, but the values of the installments and the alternatives we presented of extending the installments to be able to reduce the cost of the installments with the real high interest rates, that doesn't work very well. So we prefer to keep this approach being more conservative and having more gradual growth and not trying to take a leap or compensate this in deviations with the buy now, pay later. It's just going to be a long-term journey while the macro scenarios as it is. When macro gets a little better, if we have a solution with the fiscal agenda, some kind of tailwind that kind of pushes forward, then we can maybe take on a more aggressive approach. And that will, of course, encourage the growth of our sales and that will help a lot more. So if you just do any model and add the amount of sales with this taking place in the buy now, pay later, that would modify the P&L of the company a lot. So that's kind of what we imagine for the end of '26 and not before that.

Excellent. And congratulations on the results.

Our next question comes from Ruben Couto at Santander.

I wanted to hear about the expense point. I think that's been a protagonist, right, for the margin improvement. And also mentioned there's a lot to be done. But I wanted to understand if it's more about waiting on operational leverage as growth comes from a continuity of this process or if there's still room to have more efficiency gains on the expense lines, which have been very significant. So if you could also give us an update on the expectations regarding the labor expenses and claims, which are also in this context, that would be great.

Sure, yes. So Ruben, if you look at expenses. What we see here is that we shall have opportunities, but they are incremental. When we look at the nominal value, it really looks a lot tighter and more difficult to see structural modifications, right? The biggest opportunities are for operational leverage, right? But where you see a lot of opportunities is with capital allocation. But when we look at the costs, especially for stocks, we see a distribution in a network of 1,000 stores with a market that is sometimes stronger in e-commerce where you have like 25 DCs to service e-commerce plus the 1,000 stores that operate as many hubs and delivery terms that also influences. So the availability of the stock also influences the capacity for sales. So we're getting a lot stronger now with analytical models to be able to optimize this distribution. There's lots of opportunities here. And along with credit, and that's why it's an important leverage where you release the credit along with suppliers to allow us to buy in a more balanced manner. So today, we concentrate a lot by the end of the month, and that's where we will have an excessive stock in some locations and [ retros ] in others. So losing sales and they have excessive capital with expenses as well. So we have a lot of expenses that are associated to this process, right? So here, there are indirect expenses that affected SG&A a little less, but there's no short-term lever, right. So these are long-term levers. And in most of these, the payback is 12 or 24 months. And so we take a while to start reaping the benefits. So until today, there's things we look at, and we see we're still paying the cost of this business and these are capturing it because if until you wait and clean out the entire stock, we still don't have like a big special sale. We have to do things a little more gradually. So there is an opportunity here. And in some of the indirect expense lines, but they're not that significant to look at, right? So what's most probable is that we'll be able to have this operational leverage and we'll consider this dilution in the SG&A. But when we consider labor, then yes, over time, we have improvements. And if you consider the base and the continuity of normality in the company, it's better than what it is today. So there's no significant improvement. But we're at a pace that we consider to be pretty much what's going to go on this year. But up ahead, I do have important evolutions, right? So when you have a lower amount of labor claims, the levels of provisions I have end up appearing to be excessive, right? So we're waiting on this to be confirmed. It takes 5 years to be for payment. But it takes a while, but I'll have a P&L. It's a lot better in 2 years than today. So when I close the store that generates an impact, of course -- but we try to be conservative. However, yes, there are discussions as there are numbers that could be better for next year than what was our base plan, just as '25 kind of anticipated '26. It could be in the '26 anticipates '27 and then it will be quicker for everyone to see what the normality is, right? And, of course, not the anomaly we had in the past. So we're very controlled and we've been evolving very well with some incremental improvements that we'd rather provide more disclosure on when we have the actual confirmation.

Well, just to complement this, on labor, ever since last year, we've been mentioning how those legacy processes that were a lot -- and losses that were a lot more expensive and they've been dropping in size and their total price, of course, considers more assertive governance in this process. And all of this impacts this quarter-over-quarter with a significant improvement. And it keeps up this trend until it stabilizes a bit more and we move along, right? So we need to continue this important work and all of the logistics efficiency that Renato mentioned. And so all of the efficiency really represents a gain where we can observe this over the period. Clearly, the operational leverage is very strong as we get our sales mix right with the paid channels or the physical store with the buy now, pay later services. So it's this equation if we focus on the growth, it's going to bring in a lot of benefits for sure.

Our next question is from Gustavo Sendaye from Bradesco.

I have 2 questions. One is about the competitive scenario. If you could give us an update. We have some digital native companies accelerating their focus in this category. And so if you could talk about the specific categories that may have been a little more aggressive with these players. And the second point is about CDC. And for the first time in this quarter, I wanted to understand how we should look at this from now on with this new reality of the company with the debt converted and is this to be accelerated, especially considering online. So those are my main questions.

Great, Gustavo. Thanks for the questions. And now about the competitive scenario. What we've seen is retail, first of all, with the physical stores. Retail is very rational. So everyone is demanding financial discipline from the teams and commercial strategies. And so there's competition with very rational competitive scenario. We have no other points to add like, oh, someone is getting in the way of the market or so. No, it's very rational. And it's going to keep up as it is while macro is pretty much in this scenario, right? So whoever was not leveraged became leveraged and who was already leveraged really was left in a complicated situation. We were able to act beforehand. And now I think we're even better if comparing with other peers, right. In digital, it's different. So we have categories. And when we consider the higher ticket, we continue to have people operating pretty well, and that's been seeing growth. When we talk about big box, big volume products, these are categories were Casas Bahia is a reference and we've been able to grow with discipline, prioritizing our margins, which we don't have a commitment to growth in the online channel, right? But we have a commitment to margins. But when we look at portables, what has happened is, believe it or not, we see a share gain in our generalist platforms, but we also gained share. So there's significant growth in the market for e-commerce and the market dynamics is very different. The brick-and-mortar is market pretty stable and the online market is growing. So today, it's already about 52%, 53% online. And I think we're moving towards a scenario where we'll be close to China maybe with 60-40. I thought it would be a little quicker, but it's going a little -- we thought it would be slower, but it's going quicker. But even bigger tickets, you demand this. So there are structural changes that need to happen, and we hear this from our manufacturers that they sometimes had to accelerate digital channels because they didn't have space, credit to sell with us and others players and that this conversion should probably favor us when it comes to shares. So I'm super optimistic with the negotiation dynamics we'll experience in the second semester and next year. Besides this, we have seasonality in the second half of the year. And next year, we have the World Cup, which is where the company has a lot of strong points because our biggest share is in televisions. So that's kind of the dynamic we're looking at when you consider the competitive environment. Then about CDC and digital penetration, we do have a very well-structured strategy to increase penetration in digital, but we do not have a priority in the short term to perform capital allocation in this channel. Our priority is physical stores, but the market has really been pushing us a bit. And then we have to meet customer needs, obviously. There are a lot of new launches, a lot of product assortments. I can't buy everything in 1P because I want to have discipline in this purchase, and we're not working on just random bets. And to buy for 1,000 stores, you have to have depth. So the best I can do in 3P, right, because I'm not using my capital for that. And that's where through the CRM, we can work with the buy now, pay later and [ Credio ]. And we've been evolving a lot with our CRM, which is a super important lever to be able to grow the Credio in digital. And now customers are really experiencing this omnichannel journey. So you're watching a television on the website. You go out and you receive a WhatsApp of a seller saying, look, hey, Gustavo, you're looking at this television on the website. Do you want to come at the store and take a look at it? So the feedbacks are very good. Like sometimes they say, hey, you're monitoring me. But no, you're seeing the lead, you see the guy online and logged in. So there's a lot of potential. When I see the amount of possibilities with 116 million tax IDs, we're just scratching the ceiling, right? You're just starting. And so it's like the potential is huge. And we're really using this possibility to optimize the rollers and CRM with good conversion, and that allows us to continue to invest and reduce our exposure in other paid channels. That improve the contribution margins of this digital channel. And that's where I can really see next year, we should experience an environment where it really makes sense to accelerate digital. Today, I will allocate cash to accelerate this. It comes organically by the strength of the brand, et cetera. So we're in this area with a requiring a lot of discipline.

Well, I wanted to add on to this, Gustavo as well. I think the customers' journey sometimes is unperceivable. So in online, we're a destination for those categories to see those products, see their credit offering and then they move in the checkout in this direction. There was a very relevant evolution. In 1 year, we were able to double the amount of sellers that were registered to be able to have the digital CDC, and that's where we had an important lever as well with this increase in the base so that sellers can be enabled to perform this transaction. So I think that also helped a lot.