Good morning. Welcome to C&A's Earnings Conference Call for Q4 2022 and the full year 2022. Today, we have with us Mr. Paulo Correa, CEO. Mr. Milton Lucato, CFO. Fernando Brossi, VP for operations and financial services, and Donatti, Commercial VP. The slide presentation and the results release are already available on the results center on C&A's IR website. We also inform that this call is being recorded and simultaneously translated into English. To listen to the interpretation, please click on the interpretation button on the bottom bar. The recording of the call will be available right after the call on our IR website. After the company's remarks, we will open for questions. To send a question, you can ask it live by clicking on the button, Raise Hand to join the queue. If you prefer, you can send your question in writing using the Q&A icon on the bottom bar. Before proceeding, let me mention that any forward-looking statements that may be made by the company during this conference call relative to the company's business prospects, projections, operational and financial targets are based on beliefs and premises of the company's management, as well as on information currently available to C&A. These forward-looking statements are no guarantee of performance. They involve risks, uncertainties and premises. They refer to future events that may depend on circumstances that may or may not occur. Investors and analysts should understand that general market conditions, industry conditions and other operating factors may affect C&A's future results and may lead to results that differ materially from those expressed in such forward-looking statements. I would like to turn the conference over to Mr. Paulo Correa to start his presentation. Mr. Correa, you may proceed. Thank you, Carol. Good morning, everyone. I would like to start today's presentation by linking with our last presentation in Q3 2022. At the time, we talked about the implications of the macroeconomic scenario on the way we were steering the company and the way we were building a cash protection program, which was already being implemented. We were already seeing a few impacts. The greater impact would come on Q4 2022. After making this link, if we look at the left side of this chart, we see that we have five important factors that would ensure the success of our cash protection program. First, the gross margin. Here we can see that within this dimension of the gross margin, we had a 1.6 percentage point increase versus 2019 or versus pre-pandemic level. Not only were we able to increase our gross margins in the past few quarters, but in Q4 2022, this trend continued. This is very much related with the investments that we made in the past few years, particularly in push and pull, digitization and dynamic pricing. The second important factor was the increase in our productivity and the increase in the sales per square meter in our stores and how we continue to evolve with our digital strategy. All these investments in digital transformation allowed us to reach record-breaking GMV results with more than BRL 1 billion digital gross revenue. The next element, efficiency and expenses and costs. We conducted some reorganization of our structure, seeking to maximize the impact of the projects that we prioritize. This allowed for an increase in our EBITDA margin of more than 3 percentage points year-over-year. Element number four here is the improvement in our working capital. We had different sustainable strategies, sustainable initiatives to extend payment terms, and this led to a free cash flow of more than BRL 130 million in 2022. We continue to work with a lot of discipline with our investments. Our invested amounts were more controlled and more focused on those aspects that could bring stronger impacts to the company within this cycle. We ended the period with more than BRL 1.6 billion in cash at the end of 2022, which means a leverage of less than 1.0.9x the net debt to EBITDA ratio. With this result, we are starting the year 2023 even more focused on operational aspects in order to improve the product, services and offers to our customers. On the next chart, we can see the highlights of Q4 specifically. This slide shows very clearly how we were able to improve different operational metrics and how we are seeing better returns of the work that we have been doing. Our total gross margin reached 51.7%, as I said, More than 3 percentage point increase year-over-year and 2.6 percentage point increase versus Q4 2021. For merchandise, we also grew more than 2 percentage points year-over-year and also compared with Q4 2019. This really helped us. It allowed us to reach an adjusted EBITDA of BRL 364 million, up 20% year-over-year and practically the same that we had in Q4 2019, despite all the inflation increases that occurred in the past three years. C&A Pay completed its first year of operation and already account for 16% of the total sales of the company. The free cash flow that we generated in Q4 corresponded to BRL 761 million. Driven by all the initiatives that we mentioned previously and that we just shared with you in our last chart. Most importantly, in the end, despite the macroeconomic context, we saw an increase in our total customer base, and we reached the mark of 24 million customers subscribing to our loyalty program, C&A Você, which has been critical and crucial for us to boost our digital sales. As you could see, we have reached our first BRL 1 billion in digital sales in the end of last year. This means we have plenty of reasons to celebrate and many advancements that we can see in our operational metrics. On our next chart. Here we share some of our recent achievements, which were also very significant and show the results of our work and the evolution of the company. For the fifth consecutive year, we were first in Brazil's Fashion Transparency Index, we even increased our score compared with last year. It was a more than 3 percentage point increase. We reached 73%. It is the highest index in the Brazilian fashion industry, and we have been leaders for the past five years, which attests to our seriousness, our commitment, and how we are evolving in the level of transparency and sustainability of our company. In our ReCiclo movement, we collected 75,000 items this year, or 17 tons of clothes. Most importantly, part of these items, together with some manufacturing scraps, were used to produce 20,000 new items. There is circularity here. We can see circularity in practice within our business. I would also like to share with you that for the second consecutive year, we were among the top 10 retail companies with over 10,000 employees in the Great Place to Work ranking for our industry, which is another reason for pride. On the next chart, I would just like to quickly recap our growth program since our IPO and our strategy and our growth levers. In Q4, we have some very interesting highlights. First, in respect to our new stores and formats, we opened one new store. We closed the year with 332 stores in total. Over this period, we had 17 new openings, and four stores were closed during the year. Also, in Q4, we turned 10 stores into our double-door ACE store format. The ACE brand has been gaining relevance, and in 2023, it accounted for 23% of the sales. The second lever here is digital transformation. WhatsApp continues to boost our digital sales, accounting for more than 60% of the digital sales and contributing to improve our profitability because the inventory sold is often from the store itself, and customers want to pick their products at the store, which means the traffic at our physical stores and leads to a higher average ticket, as well as lower shipping rates, lower shipping costs. In credit offer, in the first year of operation of C&A Pay, we had very positive operational metrics despite the more complex macroeconomic scenario. Our own credit offer via partnership with Bradesco, combined with our new product, C&A Pay, increased the share of credit offers by 5 percentage points in the year. The fourth growth lever here is the modernization of our supply chain model. Here we have some important highlights. Today, our capacity and our three sorters already in operation also the Manhattan system that we use at our DC is a very renowned system, is already implemented at our DCs, and we also have an artificial intelligence system that is in place to improve the allocation of items to our brick-and-mortar stores. With all these initiatives, we have already reached 25% of our sales being done through the push and pull model. This is a critical lever. This is a critical tool that allows for this evolution of our gross margin, and that allows us to show consistently over the past few quarters a gross margin which is above the pre-pandemic levels. In Q4, this increased with more than 2 percentage points compared with Q4, 2019. Also, in distribution to our end customers, we are trying to improve our profitability without any prejudice to the service level. Our two-day delivery throughout the country increased to 51% of our sales despite the higher profitability level and the optimization efforts. This is possible due to all the investments and capacity building that we implemented in our supply chain. Now I turn it over to Brossi, and he will share with you more details about our financial services operation, which in my opinion was one of the highlights for 2022. Thank you, Paulo Correa. On the next chart, I would like to share with you some additional information about C&A Pay. The first year of C&A Pay was above expectations, and this is a reason for celebration. This shows the strength of C&A sales. We closed 2022 with 2.6 million digital cards issued. C&A Pay alone has already reached 16% share in our sales in Q4, 2022. Another important driver was the average ticket per customer when they use C&A Pay, which is 80% higher than the average of any other payment form. From the financial standpoint, we reached a wallet of BRL 563 million, which leads to a revenue of BRL 134 million in 2022, which shows the representativeness of auxiliary services such as insurance, withdrawals and others. In this macro context that we're living now, it's very important to show that we have strong governance of our risk exposure. We were able to maintain a well-adjusted credit policy, reaching an efficient result of 14.6% in our 90-day wallet. C&A Pay still has a lot of potential to grow. In 2023 we will continue to see its evolution. We expect our wallet to grow twofold compared with 2022, with a continuous increase in the share of sales and in the base of cards issued. As for our customer offers, we will launch and implement additional financial services to improve the profitability of the business. At the same time we will structure the launch of our private label card. We know that with the evolution of our business to more mature levels, the over 90 will increase. We understand that it will be aligned with the average of our industry for a fashion private label. Finally, it's worth noting that in the end of 2022, we received authorization from the Central Bank to operate as a Direct Credit Society. The next step now is to build a more efficient market vehicle to finance the growth and the profitability of C&A Pay as a tool since now we no longer will operate with a mandate clause. We have clear plans of what we want from C&A Pay, and we will always keep in mind that our main purpose here is to increase our retail sale. On the next chart, I would like to give you some more context about our partnership with Bradesco. As you may remember, in the end of 2021, we announced the launch of C&A Pay, the new digital card issued by C&A. As for the partnership credit cards, we agreed to continue using the credit cards in 2022 simultaneously to what we do with C&A Pay. After, we would have the rebuy of the credit rights for 2023, and the credit card base would remain active for one more year until the end of 2023. In the end of January 2023, we announced a new arrangement for our partnership with Bradesco. During 2022, the macroeconomic scenario became more complex and more difficult than what we had imagined. We had a discussion to see whether the current moment would be adequate to launch our new card, which would also be used in other commercial facilities and would increase, therefore, our risk exposure. Based on this context, we negotiated with Bradesco some changes in relation to what we had initially contracted. We will maintain the shutdown of the sales of new credit cards under the current partnership as agreed before. In order not to leave our customers without a credit product. With Bradesco [foreign language] We will continue to issue credit cards with the Bradesco brand. [Foreign language] I would like to turn it over to Milton to share the results of Q4. Thank you, Brossi. Good morning, everyone. It's a pleasure to be here with you.[Foreign language] Now let's go over our financial results. Let's start with our revenue. Here, highlight goes to our merchandise revenue.[Foreign language] Focusing on apparel. Paulo talked about the assertiveness of our collections. Even in a quarter with significant impacts from climate conditions, national elections and the World Cup, all of which had a negative impact on the traffic in our stores, we still showed a 2.9% increase year-over-year. [Foreign language] For apparel, the year-over-year increase was 19.4%. As for fashiontronics and beauty, in Q4, the variation was 0.3%, which is practically stable year-over-year. Here we had the negative impact on the sales of smartphone, which was mitigated by the increase in sales for beauty. We always say that beauty has a relevant role in the composition of our fashiontronics sale, both in terms of sales and also the composition of the margin. We continue to see good results in beauty. Next chart shows our margin. The merchandise gross margin was a highlight in 2022, particularly due to the evolution in apparel. As you heard from Paulo, we're capturing the benefits of the different investments that we made in the past few years. There was a clear evolution in our technology strategy, which also helps us with the pricing of our products and the strategy that we call dynamic pricing. The implementation of the push and pull technology for our stores. All these investments are now yielding results and contributing to a sustainable increase in our gross margin. For apparel, we had a 2.9 percentage point increase year-over-year. [Foreign language] This affected the behavior of our margin as a whole. As you heard from Paulo, the levels are now higher than those we had in 2019, the pre-pandemic levels. I remember that this was another point of interest. We were always asked when we could expect to resume the margins that we had in 2019. We're very happy to announce that now we're back to the same level that we had in 2019. The next chart shows our operational expenses. Without considering our provision for bad debt, the operating expenses grew by 2.9% in Q4 and 17.5% during the year. Here, it's worth noting that we launched our expense efficiency plan and also our working capital plan. We're going to talk more about this later. We launched these plans in the middle of 2022. When we pushed the button to increase efficiency, we already started seeing some signs of improvement in 2022, and we will certainly continue to reap the benefits in 2023. Here we have the SG&A over the total net revenue. At some point, we should go back to the levels of 2019 because we continue to see improvements in this indicator. We will continue on our journey towards better efficiency, and this will certainly improve the results of the company. On the next chart, we have our adjusted EBITDA post IFRS 16. It was 20% up year-over-year with a margin expansion of 2.8%. For the year, the increase was 67% and the margin expansion was 3.6 percentage points. We are clearly on a journey towards recovery after the initial impact of the pandemic. [Foreign language] PNA's focus is to recover the profitability that the company had and go beyond that. That's why we're making all these investments. We are now reaping the benefits of these investments. We are improving our operations in different fronts. We're very positive about the advancement of our results consistently with the reaping of the rewards of the investments that we're making. On the next chart, we show our investment. Combined with the more challenging macro environment, the increase in the basic interest rate. The increase in interest rates will increase the level of strictness that we use in our investments. That's why we revised our original plan for 2022. Part of the discipline that we started implementing the second half of the year is also related with this. Compared with the previous year, we reduced our investments by 45%, so the total amount was BRL 373 million invested. This is due to the cost of money, also the returns of the investments and the most adequate choices at the time. This is governance in place, and this is what determined our appetite for 2022. We will work the same way in 2023. On the next chart, we see our cash position. We can see a marked evolution in our cash position. As you heard from Paulo in the beginning, we closed the year with BRL 1.6 billion in cash. Here on the left side of the chart, we see the numbers for the quarter. Here it's clear that we had the expected generation of cash for the quarter. In our financing activities, we chose to prepay a CCB that we had of BRL 230 million. The combination of cash generation and the choice and analysis of our portfolio allowed us to anticipate this debt, which was the most expensive debt that we had. On the right we have the numbers for the full year, and we closed the year at BRL 1.6 billion in cash. On the next chart, we see the consequences of all these moves that we made, we closed the year 2022 with a net debt of BRL 568 million and a leverage of 0.9 times the net debt to EBITDA ratio. When we look at the schedule for our debt, the principal will be BRL 453 million in 2023. We extended the average maturity of our indebtedness. Today, it is at 3.7 years. The average cost is CDI plus 2.3%. This is the end of the financial part of the presentation. Now, I hand it over to Paulo, he will continue to talk about the highlights of the company. Before we open for questions, I would just like to close the company's remarks with a macro summary of how we interpreted Q4. We had a very unstable macroeconomic scenario in Q4 last year. It continues to date. C&A was able to build a very strong operational design with robust structural advancements in its gross margin, with the capacity to increase its sales, particularly through WhatsApp, and by advancing and developing our credit model through C&A Pay. This combined with our cash protection plan, which was very diligent, detailed, and with an excellent execution level. This all led to these results and this better financial soundness for the company at the end of Q4. Looking forward in 2023, we will continue to focus on our financial results and protection of our cash as a priority, considering the context and the cost of money that we see currently and the high interest rates that we have currently in our country. These operational improvements are here to stay. We will continue to advance. Our investment will be optimized. We will perhaps decrease the number of new openings, but we will focus our investments on investing on the right technology that could bring the right impact to our customers and our results. Ex-expenses will continue to be continuously monitored, the working capital is benefiting from the measures that we adopted in 2022, which will continue in 2023. I understand that we are very confident that we will continue to evolve and improve the deliveries of the company based on investment we already made, and we will seek even better productivity and yields for the assets that we already have. Our brick-and-mortar stores, our new openings, our customer relationship program, our digital channels, and also the acceleration of our credit model through C&A Pay. I stop here, we can open for questions now. Carol, could you please provide instructions for the question and answer session? Thank you, Paulo. If you want to ask your question live, please press the button raise hand to join the queue. If you prefer to send your question in writing, please use the Q&A icon on the bottom bar. The first question is from Ruben Couto, Santander. Ruben. You may proceed. Good morning, everyone. Thank traffic for answering my question. You did great work in liability management. This had an important contribution to your working capital, considering the macro scenario that we have now. These are very good results, I want to know how sustainable these longer maturity times can be? As we heard from Paulo, I think you're expecting to continue to see this improvement in 2023. I just want to understand how sustainable this is, particularly for suppliers. Another quick question about expenses. Also in line with what you said regarding your marketing expenses, I think that it really contributed to hold back your other expenses. Do you think this has reached a level of reduction that is healthy and profitable for online channels and also brick-and-mortar stores, or do you have more fat that you can cut in 2023? Hello, Ruben. Good morning. Thank you for your two questions. Regarding our suppliers, to give you some context, we closed 2022 with a leverage of 0.9 times. This has a strong relation with the operational generation and all the work that we did towards better efficiency in our working capital. All these efficiency actions were designed in a sustainable fashion, and they will continue throughout 2023. When we assess the business needs that we have and the operational performance that we expect, I think we did the right thing at the right time. Talking specifically about your question about suppliers. We extended our terms in a very conscious way, respectful. We believe that this measure is here to stay, that it will continue in 2023, not just for our liabilities, but also for our assets. Because this was a joint work. It wasn't just an one-timer. For the assets, this led to a natural reduction in the average payment, customer payment times when we implemented the minimum installment for payments installments. This combination was something that became more visible after Q4 last year, but it will continue in 2023, and these measures are here to stay. Another point to your question about expenses. As you heard from Paulo, we are always very diligent in the management of our expenses. Of course, at times, the company requires more investment. This will depend on the growth strategy of the company and the strengthening of some of our levers. This is what we did in 2021 and 2022. There are also some moments when we seek better efficiency due to the macroeconomic scenario. You mentioned marketing, but marketing is just one of the examples here. It has to do with the customer acquisition cost and the return of the action that we take to attract new customers to our channel, which actually reached BRL 1 billion in sales. There's an effort involved, but we also see the benefits of that. This also is valid for promotions and shipping costs. It's not just about marketing. There's also better efficiency in shipping, and we benefit from the technological investments that we made. There's also the diligence due to the impact of the inflationary pressure that we have on some of our contract. We are very strict in the way we manage this so that we can minimize all these impacts. When I look at the way we finished 2022, and when I look forward in 2023, I think we are on the right track. Thank you. The next question is from Danniela Eiger, XP. Daniela, you can open your mic rophone now. Thank you, everyone. Good morning. Congratulations on your results. I have a few questions. First, can you share with us what you see for the start of the year? We know that January had a weak basis due to last year's problems, but how are you seeing the start of the year in terms of consumption? What are the prospects for the rest of the year? This is something that we hear from all companies, but I want to hear from you. Based on the information that we have, what will be the base scenario for 2023 in terms of growth expectations? My second question is about your leverage. You were able to extend your payment terms with Bradesco, and of course, this brings some relief in terms of cash demand. How are you seeing the market in terms of renegotiation of your debts? You have more than BRL 400 million to be renegotiated this year. From what we hear, this is something that is very challenging right now to renegotiate your debts. What is your level of comfort with the leverage that you have today? My third question, how do you see the quality of credit and customers in terms of bad debt? Your report has a lot of information about C&A Pay because it's a new service. How do you see it as dynamic versus what you were expecting as normal levels of bad debt in your context? How does this link to you're nearly doubling your credit wallet by the end of the year? Thank you for your questions. I will start with your question about 2023. For Q1 and for the rest of the year. Then Milton will talk about our leverage, and Brossi will talk about the credit quality question. In 2023, in January, the month of January was in line with what we were seeing in the end of December last year. Which is positive. According to our expectations, February has a more difficult comparison basis because last year we didn't have the Carnival holiday, and this year, people were eager to go out to celebrate Carnival, so there was a much lower traffic during Carnival days in our stores. I think Q1 is in line with what we had expected. Not so positive, but in line with what was expected for the period. Looking forward, we know that our greatest opportunities are in the second half of the year. Q2. Last year, you remember Q2, the climate was very positive for our sales, so the baseline for Q2 is high. We will depend on the climate, and I think the climate conditions will be decisive for the Q2 performance. For Q3 and Q4, we have a more positive outlook. Not just due to everything that we expect to evolve during this year, but also because the baseline for Q4 is lower due to all the turmoil that we had with the national elections and also the World Cup in the end of the year. This had a great influence on the traffic in our brick-and-mortar stores, particularly in November and December. That's why in the end of the day, and of course, this links to your second question, the prospects. When we look at the overall macroeconomic prospects, there are a lot of uncertainty. In such a scenario, and this is not just what's happening now, this is something that has been happening since the start of the second half last year. This is something we've been working on since second half last year. The numbers are much clearer now. As I told you in our last call about Q3, I told you that we should see better results in Q4. We are working in a very practical way in terms of how we manage our cash. Within this context, we want to keep this company evolving, and we want to keep capturing the benefits of the investment that we made. At the same time, ensuring the expansion and the success of each of these work fronts. That is why we implemented initiatives in different dimensions to improve our gross margin, optimize our expenses, optimize our investments. We are also paying attention to our working capital. Going back to your other question, or to the previous question, we want to do this in a sustainable way. We need to make the changes and to management changes that we can sustain over time and throughout these more unstable periods that we are seeing right now. Milton, would you like to talk about our leverage? Yes. Danny, you mentioned our commitments for 2023, as I said, we are working very diligently. As I said in the first part of our conversation, we made the decision to prepay one of the debts that would mature in 2023 due to its higher cost and because we had room for that. When we look into 2023, we have BRL 453 million of principal maturing this year, we intend to pay this debt timely. When we look at the business needs, I share the same view of my colleagues here, the greatest driver, the greatest driver for capital in 2023 will be C&A Pay, this will be via a greater need for working capital. We already re-requested approval from the Central Bank for our SCD or Direct Credit Society. This gives us more options right now. One of the options to structure this additional need for capital is through a FIDC. We are now evaluating the potential use of this type of vehicle, if we consider it effective for 2023, that's where we would put our funding for this needs raised by C&A Pay. Brossi, there was a third question about the quality of credit. Hello, Danniela. Regarding credit, I think it's worth mentioning that when we launched CNPay, we put a lot of attention in the forming of a credit team, a very robust team with a lot of experience. To build a new wallet, you don't have a legacy base to support you usually face higher default levels. As we launched the product, we had the diligence to follow each group of customers that joined. In the end of the year, we made some adjustments in our credit policy, which allowed us to finish the year with a lower default rate than expected for that specific credit wallet that we had. Looking into 2023, we will continue to use the same model. We will continue to monitor and to make decisions as needed. We do expect to see an increase in default in 2023. This is caused by the maturity level of our portfolio, but everything is within planned, within expected. In general terms, we will continue to work diligently and attentively, and so far, we have been able to deliver above expectations. Thank you. Thank you, Danny, for your question. The next question is from Gabriel Disselli, BTG Pactual. Gabriel, you can open your microphone now. Hello. Thank you for answering my question. I have two quick questions. Can you please share more about the expected gross margin for the year, and particularly for Q1, considering the higher inventory level of some of your competitors and the situation of some of your competitors. Are you expecting higher level of markdowns from your company or the competitors? If we should expect more adjustments in the number of stores that you have, or your store base today is the right size, or should we expect any changes? Thank you, Gabriel, for your questions. As for the gross margin, we expect to maintain the marks that we saw in 2022. Right now, we don't see any need to reduce the margins. The start of 2023 was very healthy when it comes to inventory. Of course, that we expect more aggressiveness from the competition, this may lead to a need for some adjustment. At least for now, in the second half of the quarter, we still don't see any risks in this direction. The margin should stay the same levels for Q1. As for the number of stores, we are always looking for opportunities. We are always monitoring performance, prospects, and the financial health of each of our POS. We will always be on the look, and we will make the decisions that we need to make. Right now, I don't see any reason to accelerate the closing of stores, for example. Thank you. Thank you, Gabriel, for your questions. The next question is from João Soares, Citi. João, you can open your microphone now. João, can you hear us? Can you hear me? Yes, we hear you. Thank you. First, I have a follow-up question. Paulo, you mentioned that you don't see any need for changes of your strategy based on the attitude of the competition. I just want to understand if you think the competitors are more aggressive in terms of price-pricing now? Your expectations for the year. We know that last year we had very strong price adjustments in your industry. Maybe there's an expectation for higher promotion rates this year. Maybe your revenue will be more driven by volume than prices this year. That's what I want to hear from you, your expectation in terms of top line for this year? Also talking about the mid-term, do you see any chance of resuming the opening of new stores and also what you expect in terms of your top line in the mid-term? My last question is about suppliers. Milton said very clearly that you're expecting an improvement in your working capital this year? I don't mean to challenge your view, I just want to better understand. Because, well, part of your suppliers, you have a drawee risk. Maybe the current environment is more complicated for this type of operation. Could this be a risk for the expected improvement in your working capital? I will answer your two first questions. Regarding the competition, the competitive scenario itself, today, we have a management model with constant monitoring of prices in all the categories and all our competitors. We also have our position, and we maintain this position. That's why I say that our gross margin has a strong level of consistency. Because when we adjust our prices, we don't change our competitive positioning. Our competitive positioning is exactly the same that we have before the pandemic. What we do is we strive to offer more and more interesting products to our customers. This is our proposal. This is our proposition to add more and more value still under the same competitive positioning. If we see a very striking promotional movement in the market this year, this could lead to two impacts. One, the impact on the cost of the products. Because if we have a promotional environment, this is the result of a lower quantitative demand. A lower quantitative demand will also cause the need for adjustments in the supply chains. This one is not so concerning, but I think that on the other hand, we have another structuration that we made in the past few years through our technology investments to build an artificial intelligence model that allows us to monitor our prices and adjust our prices store by store and product by product at any time. This provides us with a better understanding of the fluctuations and the dynamics that we see, for example, the sales curve of each product at each store. This could point to a need to make adjustments or not. This gives us a very high level of granularity, very detailed level of granularity that we didn't used to have before. These. Any wave that we could see or large promotional waves that could occur, in this case, we would have much more clarity and granularity to know how to proceed. When you talk about the mid-term and our expansion, our intent today, we have the potential to open 25-30 stores per year. We didn't change our opinion about this. We understand that that's the potential that we have. However, today, the cost of capital today, the cost of construction really increased during the pandemic. The consequence of that is that in the short term, considering the macroeconomic context and considering our priorities in respect to our cash, in the short term, it doesn't really make sense to accelerate new openings. This is still in our radar. We are being much more selective and picky now to ensure an even higher level of assertiveness for all these projects, at least during these times of turbulence. Afterwards, we can resume once we have lower interest rates and once the cost of capital is more balanced. Milton. Your question about drawee risk, let me just rephrase a little bit here. I understand your concern and the market's concern, considering this very delicate times that we're going through now, and we had some news in the media. I want to reassure you that the supplier discount subject, this is something that's done in the benefit of the supplier and not in the benefit of C&A. The supplier has the conditions to go to the market and anticipate the amounts receivable within the original payment terms. C&A is not involved in any operations that will change the supplier accounts and give them a financing characteristic. The drawee risk is just an option for the supplier. They can anticipate it using the funding of a financial institution for that. That's how these operations work. What we did to better manage our working capital, the suppliers are just one of the elements. We have several other elements coming from operational discipline and a revision of our appetite for investments, discipline in our expenses, shortening of the average sales term in apparel and fashiontronics. If you go to our stores, you can see all the actions that we're taking in this direction. Suppliers is just one of the dimensions. We don't see any need to change that in 2023. I don't know if I understood your question, but you asked whether we plan to be more efficient or make more changes. No, we have reached the level of efficiency that we need, and we will sustain this level for 2023. We don't see any risks regarding our relationship with suppliers, both in apparel or fashiontronics or even for our CapEx suppliers and other indirect material suppliers. Thank you. Thank you, João, for your question. The next question is from Tales Granello, Safra. Tales, go ahead and ask your question, please. Good morning. Thank you for answering my question. Just a quick follow-up about expansion and leverage. With a decreasing leverage level in some of your competitors, they're closing some stores. Competitors are closing stores. Can we expect a momentaneous acceleration in some points that are maybe underperforming? Also about push and pull. The push and pull technology now accounts for 25% of your sales. What do you expect for the end of 2023? This higher penetration combined with a more discounted environment, or do you think you have more room to gain even more gross margin this year? This is my question. Thank you. Thank you, Tales, for your question. Rossi will answer, and Donatti will talk about the push and pull strategy and the possibilities for our gross margin. Hello, Talles. Thank you for your question. Yes, this is in our radar. We are monitoring all the potential opportunities and very diligently. As you heard from Paulo, we are studying whether these projects make sense this year. Overall, so far, we haven't found any projects that are worth putting in place this year, but we will keep looking. There's an important point here, which is location. Since C&A today has a nationwide presence, we are now looking for places where we're not present. That's why we haven't found that many opportunities. It is, yes, indeed, in our radar and in the radar of the market as a whole. In respect to our gross margin, I think this is an important topic. We got a lot of questions about our gross margin. Let me try to build a timeline here for you. First, we have been showing a lot of consistency. We are seeing a lot of evolution for the past four quarters. We are seeing increases, and this is something that we have been preparing since 2020. As you heard from Paulo, that's when we started with our Push/Pull project, and this project is very important for us because it has improved our capacity. It has dramatically improved our capacity to replenish our stores based on the SKU. In 2021, we did a price survey, and we were able to better understand our positioning compared with our most strategic competitors and also before our customers. This allowed us to understand where the opportunities lied and which were the most important opportunities so that we could adjust our prices and accelerate our margins. The last one, just as important, is our dynamic pricing system. Using big data and artificial intelligence, we change our prices store by store, product by product and size by size. We can already do this today. There's very in-intensive use of technology, starting with Push/Pull, going through to our dynamic pricing system is allowing us to advance without putting a lot of onus on our customers by increasing prices. In February, we have 30% of our products being distributed through the Push and Pull system, and by the end of the year, we want to reach between 40% and 42% of the products. This is a tool that we have been using, and we will continue to invest in this tool because it has proven positive results for our business and for customer perception at the store, because our customers can find the right product at the right time at the right place. Thank you, Tales, for your question. Thank you, Tales. The next question is from Andrew Rubin, Morgan Stanley. Mr. Rubin, you may proceed. Hi. Thanks very much for the question. I'd like to follow up on the e-commerce side. You had an accelerating result this quarter at the same time while the digital marketing came down. I'm curious, how you describe what drove the e-commerce acceleration and, yeah, how you're thinking about the digital spending going forward? Thank you. Andrew, thank you for your question. Here we always talk about this, that this great acceleration in the last quarter of last year has to do with work that we have been doing for a while now, which is selling through digital channels and selling through WhatsApp. Our assertiveness in managing this new sales channel is improving over time, and this is based on our customer base, the customer base that we already have in our loyalty program, [Foreign language]. It is a proprietary base of customers, and through this channel we can have direct contact with these customers. It requires less investment in terms of customer acquisition. For example, using social media. This is what allows us to have a much more optimized marketing spending and much more assertive marketing spending. This is the greatest reason behind this growth. Well, and at the same time a reduction in our spending volume for marketing. Now for 2023, we will maintain this strategy. We have no reason to increase investments in social media beyond our growth capacity as a whole. Thank you very much. Thank you, Andrew, for your question. This question and answer session is now closed. All the questions that could not be answered during this session will be answered later by our IR team. Now Mr. Paulo Correa will make his final remarks. Thank you all for attending our earnings conference call. We understand that the macroeconomic scenario right now is very unstable in Brazil. However, we have been consistently working on our strategic plan since 2019, focusing on the same levers and ensuring that we capture all the potential of these levers with a very strong execution capacity by our team. We are trying to optimize all the resources that we can, maximizing the impact of our investments and the capture of these results. In 2023, we will continue on this journey, increasingly capturing better results. Although we cannot control the macroeconomic environment, we're very positive and very confident about the work we have been doing and the consistency and the good impact it will bring for our investors and our company as a whole. Thank you very much. I wish you all a great rest of your day. We will be in touch. Thank you.