Guararapes Confecções S.A. (RIAA3) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you for joining us for our second quarter 2025 earnings conference call. As you saw in the materials we shared yesterday, we had yet another consistent quarter with advances in our strategy. And today, we have Andre Farber, our CEO; and Miguel Cafruni, our CFO; and Francisco Santos, Head of our Financial Services, who will give you further details about our results. After the company's presentation, we'll have a Q&A session. [Operator Instructions] This presentation is being recorded and simultaneously translated. Our presentations are available on our IR website. Forward-looking statements that may be made during this conference are related to the company's business perspectives and are no guarantee of results. Now I turn the floor over to Andre Farber.

Thank you, Luisa, Fran, Miguel, for being with us today, and thank you all for joining us for our second quarter 2025 earnings conference call. Today, we're going to share with you our historical results. This is the best second quarter in Riachuelo's history. We're very proud of this powerful result, and we'll give you details about the main levers that have enabled us to achieve such results. So how did we get here? What helped us achieve such a historical number for us? Well, first of all, strong same-store sales, especially in our core category, which is apparel. We're very happy with these results. Now the second factor that led to these strong results was that we were able to do this with a 2.1 percentage points margin expansion. So the combination of these 2 numbers is very powerful. And the third factor is that we continue to build a very strong financial services operation. Our baseline was already robust, but we also built upon this. So these 3 levers led us to these very powerful results that we're sharing with you today. I have joined the company a bit over 2 years ago, and we've been talking about this transformation process that we're going through. And there are many elements in this transformation. I joined this slide with you earlier. And since I joined the company in May '23, we've been through a lot. And this first half of the year was a very intense period of transformation. We have evolved our values. We have evolved in our culture. We changed the way we assess the people here to build this company that is always aiming to evolve and always looking ahead. So we're still going through this very intense transformation process. And this is just the beginning of the journey. There is a lot to happen, but this is an ongoing process. Now let's look at a summary of our results. As I said, very strong results. This was a historical quarter. Same-store sales achieved 15.8% in apparel. This reflects our investment in the fashion category, fashion content in our teams in a seamless experience. And as you know, we have a very strong national network with strong presence in the Northeast and in all states of the country. And the same-store sales was even stronger in the Southeast where it exceeded 17%. So Southeast consumers are reacting even better than consumers of the other regions. The numbers were good in all other regions as well, but even better in the Southeast. And we've done that with margin expansion, as I said earlier. Apparel gross margin achieved 57.3%, up 1.9 percentage points year-over-year. This reflects our efforts to use our plant better and that led us to a very strong EBITDA of 15.2%, one of the best EBITDAs in our history. I think this is the best in the last 7 years. Our financial operations, Midway achieved BRL 111 million in EBITDA, and our baseline was already strong. Even so, we grew 24% compared to the first quarter of '24, and we continue to see Midway as part of our core business as something that can add a lot of value to our business. So we continue very optimistic here. Consolidated EBITDA was up 21.1% year-over-year, reaching BRL 436 million. These are all of the levers combined, and we closed the quarter with an all-time net income record of BRL 143 million. That is 2.5x higher than the second quarter of 2024. We're very proud of this. We worked really hard to get here. And this is an evolution that we saw quarter after quarter with a very clear and consistent strategy focused on our core business, which has brought us these very robust solid results. And this is not something that will go away. This is something that we've been building quarter after quarter. On this slide, you can see the same-store sales evolution in the last 8 quarters. Since I joined the company, we saw this evolution and double-digit same-store sales in the last 4 quarters. Now apparel same-store sales was even stronger as we can see here on this slide. In the last 3 quarters, the numbers were quite robust, as you can see. So this hard work of focusing on fashion has brought us very strong and consistent same-store sales. And this growth has been achieved with margin expansion. In this slide, you can see retail gross margin expansion starting in Q4 2023, our margin has been expanding. Here at the bottom, you can see margin expansion compared to the same quarter the previous year. And during 7 quarters in a row, you can see consistent margin increases. This is the second quarter of 2025, and our margins grew by 2.5 percentage points on top of a 1.3 percentage point increase that we had achieved the previous year. So these are consistent results that we're working hard to maintain throughout time, and this can lead us to even better results. And we're very proud of the apparel results here in which our margins achieved 57.3%, very powerful. Compared to last year, we had an almost 2 percentage point increase, and we had already grown 2 percentage points. When we look at the historical series, we have 7 quarters in a row of margin improvements. We'll tell you about the levers later that have led us to these very consistent results. And as I said, this is an ongoing transformation. The work is not over yet, so we can still improve our margins even more. Now on this next slide, I would like to share a new concept that we've been working on here internally, which is value generation per square meter. We have a complex business throughout the country. which is composed of 2 core businesses, fashion and financial services. So when we add these 2 businesses, we see here dark green, profit per square meter from fashion and in lighter green, value generation per square meter from financial services. And when we add up these 2 businesses with improvement in same-store sales, continuous margin expansion, and a very robust evolution of our financial services, we get to these numbers. So let's see how these businesses evolved in the last 2 years. We started in the second quarter of '23 with a value generation per square meter of BRL 1,393 per square meter. And in 2 years' time, we have increased the value generation per square meter by almost 40%, actually 38.8% to be exact, with consistent evolution going to BRL 1,644 per square meter last year and now close to BRL 2,000 per square meter. So that shows that the combined business is very valuable, fashion and financial services. Now let me go back to our strategy. I want to tell you what has brought us this far and what will help us achieve positive results in the coming quarters. We've been working on 3 levers. The first is experience. Everything we do is here to improve customer experience, improve everything we do in fashion and products. I know I'm being repetitive, but we want to invest in key categories, women's, men's, jeans, kids and we want our chain to be better prepared to serve these categories because this makes all the difference. And we've been continuously investing in the Riachuelo brand and some other sub-brands. I'll tell you more about that later. But we believe that when we bring brand content combined with product, we can provide customers with a better experience. In-store experience is a differential, and we should keep on investing in this experience. This is part of our pillars to invest in in-store experience, architecture, design, user experience, customer service, and that also applies to e-commerce. And the last point here related to experience is the creation of a more sustainable fashion. If this is done well, we'll be able to grow our revenue more and more, and we are going to have higher revenue per square meter as a result. So that's the first strategic pillar. The second is efficiency. We're unique here. We have the largest apparel factory in Latin America, and we know that this is a competitive advantage. This gives us better margins, and we can be more reactive in our supply chain. So we continue investing in our factory and strengthening the processes that connect our factory to fashion so that our operations can be increasingly efficiency. Our operations are complex, many stores, many different locations, different profiles. So we keep on working on the clusterization of those profiles. And we've been investing more and more on pricing and marking management intelligence, markdown, investing in technology and AI. AI has been helping us a lot in doing this. And we see Midway as a second core business. These are our financial services that bring us many opportunities. So with the launch of new products, we believe that we can continue generating value here. And this will help us to keep on increasing our generation per square meter. Now the third pillar of our strategy is improved return on capital. We want to continue with the evolution of our capital structure. We want to keep on working on our debt profile. And we also see opportunities to work with all of the working capital lines and investment in order to improve our ROIC. This will bring us financial soundness and better results. So let me give you some more color on what we've been doing. I want to show you now some of these elements, starting with experience. We made heavy investments in a basic product this quarter. We created a new line, D-ULTRAS. I'm wearing D-ULTRAS special edition, which we launched for Father's Day. And here, you can see a picture of our T-shirt line with technology. And now I want to share a video so that you understand the work that we did in branding product and communication to improve Riachuelo's experience. [Presentation]

D-ULTRAS were launched in June. This is the campaign we launched back in June. This product is made in our plant. We use a special fabric, and we elevate the experience we offer by doing so, but we keep the democratic spirit of offering products and services at affordable prices. So we firmly believe that consumers need these innovations. And this is a win-win situation for Riachuelo and consumers alike. And we've seen how successful this brand, this line is. So this is just an example of how we've been investing in products and brand to create products that make all the difference. And another example that is happening right now. For Father's Day, we got our polo shirt, which is an icon for us. We're the greatest polo shirt seller in Brazil. This is a product we've carried for 40 years now. So we relaunched the Pool brand recently and our polo shirts are Pool. So we had new launches for Father's Day, where we talked about how powerful these polo shirts are. Let's watch the video. [Presentation]

This was our Pool legacy campaign, a major investment that we made for Father's Day. And we've been talking a lot about sustainability as well. So now I want to share a third video with you that shows you how we've been working on products and sustainability and how it's all connected in our chain, which is unique to us. So let's learn a bit more about our eco-friendly cotton, how we've been working on this, the impact this has on our chain and the special products we've been developing with it. [Presentation]

This is yet another example of how we've been elevating our experience with commitment to sustainability. So we're very proud of this. Now let's talk a bit more about our efficiency pillar, our second strategic pillar. I talked about the overall initiatives. But now I'd like to give you an example of our distribution center. We have a video that shows you how it works, and then I'll give you further details about it after the video. [Presentation]

So you saw our distribution center in Guarulhos with a high level of automation, a state-of-the-art DC. We control products by SKU. And in the last 2 years, we've been working hard to improve the algorithms so that the distribution center can have time to better serve the stores. And the results are very powerful. These are -- this is one of the elements that led us to better margins and better sales and the amazing results of Q2 '25 with all-time records here in net income. Now we have been investing a lot in Brazil, in people, in the retail fashion and technology ecosystem. And Riachuelo today creates 30,000 direct jobs. we've been employing more and more people in recent years with our growth. We developed this fashion chain in Rio Grande do Norte that employs over 3,000 people in Rio Grande do Norte. And the municipalities that have been working with us have a lower unemployment rate compared to other municipalities in the state of Rio Grande do Norte. So we're very proud to be able to deliver such strong results and also to create opportunities for so many people where Brazil needs the most. And we've been investing in creating sustainable fashion. As you saw today, we talked about the eco-friendly cotton that we have and products that we launched. We could spend a whole conference call talking about this. But I just want to say that we are committed. Most of our products are made in Brazil, and this brings us advantages in terms of sustainability. The products made in Brazil have a much lower environmental footprint than products that come from Asia. So this is very important to have sustainable fashion. And last but not least, we have a complex chain that is completely connected from the thread to our financial services going through factory, e-commerce, and we invest a lot in technology. This year, we're going to invest over BRL 600 million in technology, and we have over 600 dedicated employees to develop local technology. We're very proud of this. While we generate these amazing all-time record results, we also strengthened the local ecosystem, promoting development in Brazil. So this concludes my presentation. I'll turn the floor over to Miguel now, who will give you further details about our numbers. And I'll be back for the Q&A session. Thank you very much.

Thank you, Andre, Luisa and Fran. Good afternoon, everyone. It's great to be here with you for yet another call. As Andre said, we're very happy and excited for delivering another quarter with consistent results. We'll give you details about our numbers and explain to you how we got here. Starting with our retail performance. Let's talk about our net revenue. Each bar here is the retail net revenue. In the second quarter of '25, we achieved almost BRL 2 billion in net revenue, a nominal growth of 14.2%. And when we look at our same-store sales, it's very robust and consistent. When we talk about retail, the dash line here, it's 12.9% of same-stores against the base of 8.3% and in apparel, 15.8%, almost 16% same-store sales against a base of 9%. This shows the power of our fashion business. And we did all of that while we expanded margins. Our retail margin reached 53.4% this quarter, up 2 percentage points against the same quarter last year, and the apparel margin reached 57.3%, up almost 2 percentage points as well. So we're growing revenue and margins. In the next slide, I'll tell you how we got there. This is a new slide to give you some more color and clarity about how we got here. This is a comparison of the second quarter of '25 with the gross margin of the second quarter of '24. So we have broken this down into 3 groups, each at a different maturity level. We've been talking a lot about our factory and everything we've been capturing there, all of the efficiencies. So here, you can see factory efficiency in this block. This is important work that we started doing last year to improve our markdowns to have more seasonal clusterized markdowns with pricing intelligence here. So we're more intelligence when we changed the pricing of our stores, and this brought us at least 1.8 percentage points gains. And we also got a bit more here because of this fashion product focus. Andre showed our focus on -- focusing on fashion. And I'm also wearing D-ULTRAS, right, Andre, look at me. So this moved sideways, but we're betting on this and other categories here like beauty have also helped us increase our margins by 0.2 percentage points. So the idea here is to show you that we have internal efficiencies helping us improve our numbers here. We're extracting more value from our vertical operations, focusing on products and other categories. And we have different maturity levels for each one of these drivers, but we believe that we'll continue expanding margins consistently looking forward. Now let's talk about retail EBITDA, historic number as well, almost BRL 300 million in EBITDA, 15.2% of EBITDA margin, up almost 1 percentage point margin expansion, yet another quarter with retail expansion. This quarter has been really strong in financial services as well. You'll see that in a minute, but this margin of 15.2% in the second quarter is a record for us. Now let's talk about the financial services. I wanted to tell you about the behavior of our credit portfolio. This is the second quarter after the -- with the change of the regulation. We're talking about a BRL 6.1 billion portfolio. But look at this dark green bar, we achieved over BRL 5.5 billion. For the 360-day portfolio, we had significant growth. This shows that we're very consistent in the credit granting operations, the type of store, the type of segment, the type of customer. This shows that we've been able to advance and expand our portfolio consistently keeping a good penetration. This percentage here is the financial services revenue on the portfolio. It was 11.6% last quarter and 11.4% this quarter, which shows a very robust level. And this also reflects on our delinquency indicators. We can see personal loans and credit cards here with a good behavior, especially in the short term with a downward curve here when we talk about the credit card portfolio, way below our appetite, below 7%. And we also see the long-term curves here. There is a natural mismatch. But if we compare to the second quarter of '24, we see important evolution in the quality of credit granted. So that's both for credit cards and personal loans alike. At the end of last year, we ran a few pilots, and we saw that we could have a higher appetite in this portfolio. And of course, there is a risk related here, but now we see that the curve is going down again, close to 11% in the second quarter of '25. And when we look at the long-term curves, we know that this curve tends to go up. But we believe this is going to regulate from now on. When we look at historical numbers, these are strong delinquency rates that makes us feel reassured about the credit granting policies we have. Now we also have an additional slide with our payment default. This shows the quality of the portfolio when they pay their first -- when they make their first payment to us. So this is what we call the FPD, first payment default. This indicator has been very consistent at 4.3%, that means that a very small share of our portfolio is overdue in the first payment. Sometimes that's because their registry is not complete or they forgot that they had to make this payment. So this shows the quality of the customers and that the delinquency rates tend to continue going down because this is a very consistent indicator that we have under control at Midway. Now let's look at the EBITDA from financial services evolution quarter after quarter, exceeding BRL 100 million in EBITDA, actually BRL 111 million in EBITDA, up 24.1% year-over-year. And this is another important slide for us because it shows the carryover of this result. Financial services as a whole sometimes can have ups and downs and erratic behavior. But here, we can see that we've been achieving consistent results in our financial company as well. Since the end of '23, beginning of '24, we've been accumulating positive and powerful performance over -- with levels over BRL 400 million. So this shows that we have been diligent in our management to prevent those ups and downs. So we're doing this really well. And we also brought an additional PDA. This is the additional provision that we make above the regulatory provisions. So this is something we do because we want to, and this shows the market that we're not looking only at the short term. Historically speaking, we used to carry a PDA from BRL 70 million to BRL 80 million, so below BRL 100 million. So it's like a buffer to prevent the ups and downs. But since last year, we've been reinforcing this additional PDA. In the fourth quarter of '24, we told you that we could have regulated our historical PDA, but we've been responsibly showing that the results keep on growing, up 24% this quarter, but we are increasing our PDA coverage here. We have paid taxes. We're just being very diligent to prevent credit deterioration in the future. So this is just a liquidity buffer that we've been creating since 2024. This shows how we look at the long term, not only the short term. Now let's talk about the consolidated performance. Overall, when we look at the operating leverage, like we said in other quarters and to complement our long-term vision, we've been using our revenue growth. Of course, we're very diligent with our expenses, but we continue investing in our business in the long term. And the expenses are being kept under control at a good level. This is almost a record of operating leverage, 35.3%, pretty much at the same level as last quarter, but this shows that we are not prioritizing the short term. We could have gained 0.4% in operating leverage, but we keep on investing in our team to ensure that we continue growing quarter after quarter. So we have kept this very healthy operating leverage level. And when compared to previous quarters, we see that we are at a good level, over 3% gain in operating leverage as compared to '22 and '19. Now let's talk about consolidated EBITDA. We're very proud of these last 2 lines of our results. This is the best EBITDA in the last 7 years of our company, almost BRL 0.5 billion in Q2 '25, combining all of our verticals. 16.5% increase, almost 1 percentage point of EBITDA margin growth against the same quarter last year. This shows the power of our integrated business and how we've been consistently navigating here. Compared to the second quarter of '23, we had almost 80% growth in our EBITDA. And comparing these 2, we see here margin expansions and that all business lines are doing really well. And the icing on the cake. Last quarter, we were not able to deliver net income, but we've been focusing on this recently. And now we're very proud to share this number with you, BRL 143 million of consolidated net income in the second quarter of '25 against BRL 57 million in the second quarter of '24, up 151%. This shows how the company is focusing on all of the lines of our statements, delivering more value to shareholders. This shows how we've been expanding our profitability as well with great EBITDA and net income levels. Now I have another 2 slides. First, the first is about free cash flow. We had cash generated in the second quarter of '25, BRL 145 million in Q2 '25 against minus -- I'm sorry, against BRL 137 million in the second quarter of '24. And even with all the growth, we've been generating cash. We can see here operating income, working capital and our investments here. We keep on expanding EBITDA and generating cash consistently. And to wrap up our investment lines, I told you a few quarters ago that we had been holding investments, focusing on using cash to decrease our leverage which was 2x EBITDA earlier. But we used a lot of discipline and diligency, BRL 120 million in investments in the second quarter of '25 against BRL 85 million in the second quarter of '24. We are at a very healthy and consistent level. We believe this is a good balance. We always want to look -- we always take into account the short to long-term balance. Now our financial leverage. We had 2x net debt over EBITDA ratio, and we've been consistently deleveraging. Now we have reached 0.5x net debt over EBITDA, BRL 773 million in debt against BRL 905 million in June '24, and we keep on deleveraging. And with this cash generation, we believe that our debt profile will continue in this downward trajectory. So to wrap up, I just want to say that we're very proud and confident about our work. We have achieved consistent results with a great balance between short and long term. Now let's start our Q&A session. Isa, you have the floor.

Thank you, Miguel. Okay. Let's start our question-and-answer session. Our first question is from Danniela with XP.

Congratulations on your results. This has been a great presentation. I have 2 questions on my side. The first is about the short-term perspective. We've seen a concern with the slowdown in consumption throughout the whole industry. Can you tell us about what you expect from now on and what you saw in July and August? You talked about Father's Day and the launch of products that can help you with these dynamics. But can you give us more color about what you've been seeing there in terms of demand? And then can you give us your take on a possible cross-border tax exemption? Is that possible? And if that happens, what are the drivers that you can focus on to face this challenge? Now you talked about value generation per square meter. That was very interesting. Can you help us here to understand what your goals are? This value generation per square meter depends on productivity and gross margins. But what is the main driver here? And where do you want to get? You may say that you're never satisfied, but what are your targets here?

Thank you, Danni. It's great to have you with us today. Thank you for your question, and thank you all for joining us. I think you actually asked 3 questions, right? About July and the prospects for the second half of the year, the cross-border tax exemption expectations and value generation per square meter. So 3 questions. I'll comment on all of them. We're very optimistic for the second half of the year. We have many initiatives related to product and innovation and consumers have been welcoming this. We have Father's Day coming. It's an important date. It's coming up. It's right around the corner. So we've been investing in product and innovation and the new products have a good margin. So in the mix of apparel growth and margin, we continue very optimistic, and we believe that we can have the best year in the history of our company, and we're working to get there. About cross-border players. This is something new that we've been facing in recent years. Remessa Conforme was implemented in August last year, so almost a year now. But in spite of that, we had 8 consecutive quarters of growth. This confirms our belief that no matter what the competitive scenario is, the market is large. So if we do what we do well, we can grow, and we're very confident about that. In any way, I do not think that this is going to be reverted. We still have higher taxes to pay than these cross-border players. We just saw the de minimis change in the U.S. So everything that comes through cross-border players has the same -- has to pay the same taxes as the importers in the country, which seems very fair to me. So I don't expect this to change here in Brazil. But if it changes, I actually expect us to pay the same level of taxes as these cross-border players. Now about your third question, value generation per square meter. This is a different way for us to show you what our business is generating. We have a very complex business. We have a national footprint with an even greater footprint in the Northeast than in the South and Southeast. And our financial services are very well developed. So at certain points in time, our business is impacted in terms of productivity because the productivity per square meter in the Northeast is lower than in the Southeast, but we can also be benefited because our financial services have greater penetration in the Northeast. So we just wanted to measure both with our value generation per square meter. We won't give you any guidance on this, but what I can tell you is that we're very optimistic with the opportunities in our financial services which will increase the value generated per square meter. And in fashion, we are improving fashion content and experience while we improve margins, which will also impact positively on the value generated per square meter. So we expect this number to improve in the coming quarters.

Okay, that was very clear. Congratulations on your results again.

Our next question comes from Ruben Couto with Santander.

My question is about pricing intelligence. You showed us many evidences of product and brand investments for a while now. The same-store sales in apparel has been great. So average ticket is pretty much stable in the last 3 quarters. So I believe that considering all of the investments that you made in the brand and product, what's your take on the potential of this pricing intelligence driver? What do you expect, especially in regions that are developing well like the Southeast? Can you classify from 0 to 10? Where are you when it comes to pricing intelligence?

Thank you, Ruben. I think I can answer that question. As I've been saying for a few quarters now, we are undergoing this transformation process. Riachuelo created a pricing department about a year ago, and we've been evolving in our analysis, processes, use of intelligence, AI technologies. I think that we've been able to evolve a lot in markdowns. Whenever we do have markdowns, it's something that is more accurate and more mild. So for markdowns, first, we decreased the frequency. We used to do that every 6 to 8 weeks, and now we're working to doing that every 2 weeks. So for models and colors, this is something we've been doing now. And the same applies to pricing. We've been pricing things better. But if I were to assess where we are, I would say we are at a score of 3 to 4. We're already capturing results, but we're still far from our full potential here. We see an improvement in product mix. But we've been investing in brand and the average ticket is going up. But when you look at the overall numbers, this is not that clear. However, I do believe that in the coming quarters, we'll see continuous evolution. It's not that we're going to become more expensive because we know that our role is to provide high-quality fashion that is affordable. But we know that we can offer increasingly better products with higher technology and higher fashion content and that will naturally increase our average ticket while we keep volumes high. So yes, there is a lot -- a long way ahead of us. We're just midway through this process, I would say.

Our next question comes from Rodrigo Gastim with Itaú BBA.

Can we talk about gross margin? I have 2 questions. When we look at the second quarter, 190 basis points in apparel is remarkable. Can you break it down into seasonality in winter products and also bottom-up efficiencies that the ones that you mentioned during the presentation, Andre. That's my first question. Now my second question, starting the second half of the winter here, how this cold weather and the July seasonality, has this been helping us to reduce markdowns and keep gross margins?

Gastim, thank you for your questions. Very interesting. We've been discussing that almost every day. And I think that the straightforward answer is that it's not due to winter mix as much as it is from our bottom-up initiatives. This year has been colder than expected, and we haven't planned to have so much winter content. So everything we see in terms of sales and margin evolution is related to a better management of our business, better use of our factory pricing, margins and planning management. We don't think this is due to this cold winter so much because we didn't have as many products, and we came from warm year. So we purchased less this year. So we think that this is not going to lead to winter markdowns, and we think that we're going to have good margins in the coming quarters because of that.

Our next question is from Renan Sartorio with Safra.

I have a question about Midway. You saw a strong growth compared to the second quarter of '22 and delinquency is quite healthy recently. So can you tell us about delinquency? Do you expect this to be kept going forward?

Yes, we were already foreseeing a more difficult year. When we look at the short-term delinquency rates, it's very well controlled because we were planning this since last year. We have been planning this since last year. So we didn't have to close the credit granting this year because we've been creating this since last year. Of course, we cannot predict what's going to happen in the future, but we see credit indicators behaving really well, and we've been able to grow our financed portfolio and value proposition without increasing risk. So we're very well prepared. And if things go as planned, we'll probably continue growing 1 digit and expanding our portfolio, but still within our same appetite level.

Great. Thank you very much. So this concludes our Q&A session. Thank you all so much for joining us. And now I turn the floor back to Andre for his final remarks.

Thank you, Isa. Thank you, everyone, for joining us today. Once again, I just want to say how happy we are and how proud we are with everything we've been building and how we're still halfway through this process, this transformation process. There is a lot to happen, we are building the Riachuelo of the future. And I believe that in the coming quarters, we'll keep on seeing business improvements with growth in apparel and growth in margins, Midway as a significant business that adds a lot of value in our value per square meter that is generated. And I said here that we are the greatest fashion employer in Brazil. So we invest a lot in technology and in many sectors locally, and we're very proud of that. So thank you once again for joining, and we'll see you next quarter in our next earnings conference call when we share our results with you. Again, thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]