Good morning, everyone, and thank you for your patience. Welcome to the video conference of the release of the second quarter of 2023. The results of Grendene S.A. I want to remind those who require simultaneous translation, that we offer this function on the platform. To access, simply click on the interpretation button through the globe icon at the bottom of the screen and choose your preferred language, either Portuguese or English. Anyone watching the video conference in English, can mute the original audio in Portuguese by pressing the Mute Original Audio button. This conference is being recorded, and it will be made available on the company's RI website, ri.grendene.com.br, where you can also find our press release for the second quarter of 2023. You can download the presentation from the chat icon, which is also available in English. During the company's presentation, all participants will have their microphones turned off. After that, we are going to start the Q&A session. 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Investors should be aware that the general economic conditions, market conditions, and other operating factors may affect the future performance of Grendene S.A., and result in substantially different results than those stated in such forward-looking statements. Today, we have the following company executives with us: Rudimar Dall'Onder, Chief Executive Officer, Gelson Luis Rostirolla, Chief Operating Officer, and Alceu Albuquerque, CFO and Investor Relations Officer, as well as the company's key managers. I will now give the floor to Mr. Alceu Albuquerque. Please, Mr. Alceu, you can go ahead. Good morning. Thank you everyone for your presence in our video conference for the financial results of the second quarter of 2023, and the first half of this year. The second quarter of 2023 was a very challenging quarter, very similar to what we have observed on the first quarter of the year. Inflation, even though we have observed resources, it's still impacting the pockets of consumers and unemployment, even though the rates are going down, they are still high. Interest rates are still high, and we can still observe a high level of uncertainty from our clients. This is the scenario in Brazil. In the world, we could see a slowdown of the world economy regarding high inflation and high interest rates that end up causing an impact in consumerism of the world population, that is reducing the consumption of non-essential items and crisis in some countries in Latin America, that concentrates 60% of our exports. How was our second quarter? The volume decreased 15.4% compared to the second quarter of last year, to 20.6 million shipped pairs. In the internal market, 4.7% decrease, 24 million for 22.3 million pairs. On the external market, we had a bigger return with 50.7% from 7.4 million for 3.6 million pairs of shoes. If we look at the performance of exports, three countries concentrate 75% of the decrease: Argentina, Paraguay, and Bolivia. In Argentina, the decrease is a reflection of the crisis they are going through for a while. Exports from the second quarter to Argentina, they decreased 60%. Paraguay and Bolivia, together, they add up to a decrease of three million pairs. This decrease is anticipated for anticipation of shipping on the first quarter. This difference of anticipation kind of impacted the exports in the second quarter. Besides that, besides anticipations, Bolivia has been going through challenges similar to the ones found in Argentina. A difficulty to access exchange rate markets, to issue import licenses and costs, to send resources overseas increased four times. Other countries we saw a reduction in exports was South Africa and Australia. Due to the deterioration of the economy, just like some of the countries in Asia, we have observed barriers, commercial barriers, non-tariff ones, that end up making it hard to import to export to these countries, like India and Myanmar, where we can see difficulties of the importers of obtaining imports licensing. Even though with this decrease of 50%, I'm gonna talk about that later. I'm gonna talk about gross revenue. It decreased. In the domestic market, it is stable, 0.1% growth. This growth was guaranteed by the Division 1 brands that showed growth in the gross revenue of the quarter. In the foreign market, the decrease was 39.1%. When we compare 39.1% with 39.1 from the revenue, 50% of the volume of exports, we can see that we had a growth in gross revenue per pair. It grew 23%. This is the result of the less representativeness of the exports of Ipanema, which has a smaller ticket, and by the bigger representation of the female products and kids. Inside the female lines, Zaxy and Azaleia, they had a growth, which was very insignificant when compared to Grendha. For example, Zaxy and Azaleia, they have average tickets bigger than Grendha. That helped the increase of revenue, gross revenue in the foreign market. The gross profit increased 7.1%, BRL 185 million. It left from 34.2%, for 40.9%, this gain of 6.7 percentage points. We are going to observe later that all the components of the COGS, they showed improvements, but the raw materials was the one that contributed the most for this increase in gross margins. The recurring EBIT will grow 30%, recurring also 106.2%, reaching BRL millions. The gross recurring profit, 84%. The net revenue recurring, increasing 4 percentage points. Increasing in the detail of the domestic market, we separated the performance of the brands of Division 1 with Melissa. Then we can observe that the Division 1 brands, the sell-out growth increased on the second quarter. Even though in a scenario of challenges, we grew in the end, because of our higher competitiveness regarding prices, quality, and design. We grew in a market that indicates that we are gaining market share. The selling, on the other hand, it decreased 4.5%. The selling market, we observed a very contained market with no further investments for distributors and retailers. There is a lot of impact from the retailers being full with high inventories, with other products that are non-Grendene products. That can capture working capital and reduce the funds that companies have to buy other products. The big retail networks have high stocks of winter products. That impacts working capital, and that impacts the amount of money left to buy other products, such as ours. Selling goes down, and sell-out increases. Retail is selling more our products than it's purchasing from us, which indicates a reduction of the level of their inventories. This reduction of the level of inventories in 45 days, less than the average, historical average. The performance of the brands of Division 1, all the brands except Melissa, how did they perform? The gross revenue increased, the volume decreased 4.5%, and gross revenue per pair increased 5.9%. Here, we have made huge efforts to make advances, advances in the profit pool, to try to capture more value, like selling the same volume of pairs. During the second quarter, we noticed a growth that was very significant of the sandal archetype. It grew 87% when 86.7% when compared to the second quarter of last year. The share in the sales of Division 1 of this archetype left from 12% to 24. It's important to highlight that, because these sandals, in comparisons to the flip-flops, their prices are 50% higher than flip-flops. The same thing is worth to the clothes archetypes. What are they, actually? Boots, babuches, rain boots and flats, ballerina pumps. The growth of these archetypes are around 17.1%, the closed archetypes. Again, we are trying to make it available and to ship products with higher added value for our clients, and that ends up impacting our gross revenue per pair. The e-commerce of Division 1 also presents growth, it's a very important growth, 0.3 percentage points, when compared to the online sales of Division 1, represent on the total of the sales of internal domestic market division. On the food channel, which is a self-service, we grew 0.8 percentage points. It's the 3rd quarter in a row that where we have been gaining share in this market. Ipanema and the female lines, they were the protagonists on the 2nd quarter of 2023. Ipanema grew revenue and volume. The female line grew revenue and volume, remaining stable, and inside the females, Zaxy and Azaleia have average tickets. They have a performance very positive when compared to Grendha, for example, and Ipanema. Within the mix of products of Ipanema, the sandal archetype, as I mentioned before, had a performance that was really positive. We grew also in volume. We opened new stores. We have more clients when compared to last year, especially in levels above the pre-pandemic situation. As I mentioned before, our clients of retail and interact, indirect channels, they are working with levels of inventory that are lower than when compared to the historical average. They have 45 days less of inventory. Melissa had a behavior that was a little bit different than Division 1. The sell-out and the sell-in, they kind of decreased, but just like in Division 1, sell-out had a performance that was above sell-in. In the case of Melissa, the sell-out decreased less than the sell-in, which again shows a reduction of the inventory levels of our franchises. The gross revenue of Melissa decreased 3.6% in the second quarter, volume minus 9.5% compared to the second quarter, and the gross revenue per pair grew 6.5%. This performance of Melissa is the result of the same reasons of those observed on the first quarter of this year. It's a reduction of the power of purchase of Class C, the ones that actually buy Melissa products. They are more aspirational products for those people. Also, readjustments throughout the pandemic to recompose a little bit of the margins that were lost. It ended up causing prices to increase and the lack of hit products, as I mentioned before, on the first quarter, two products were they have made 10% of the sales, they represented that. To, to do the same thing this year, we need six, seven, eight different products. The lack of hit products is one of the causes. Reduction of purchase power, that impacted the sell-out, and with the decrease of sell-out, selling also decreased. The low sell-out is one of the reasons for the reduction of the selling and the franchises feeling insecure relating the recovery of the economy, also reduce the selling volumes. They are working with lower levels of inventory and a very tight cash because of lower sales. This also ends up getting on the way of the selling volume. The e-commerce of Melissa, just like advances on the price point, they've got a margin, a gross margin, 50% superior above the B2B, when it's the industry direct selling to the retail stores. We have been investing a lot to develop the e-commerce division, either on Division 1 and Melissa. The gross revenue of Melissa on the e-commerce on the second quarter grew 28.6%, and the share of Melissa sales on the e-commerce in the domestic market was 12.8%. It's a 2.9 percentage points growth compared to last year, and we launched on the second quarter the Melissa App. We are not investing in marketing to give flow to it because we are just collecting feedbacks from users that have already downloaded to implement improvements. When the App is mature, we are gonna make more investments in media because we've been noticing that all indicators and the App are higher than the indicators of the regular online shops. The level of convergence is four times higher in the app when compared on site. The volume of orders per pair is higher in the app rather than on the website. An average ticket, you mean. All indicators are higher? We are maturing our app, so that we can invest more in media, so that we can bring more flow. The Clube Melissa, as I mentioned before, franchisees are working very hard, but with levels that are lower than the average history levels. On this slide, we have the gross revenue, what has impacted our gross revenue in the second quarter. Volume was the highest negative impact on gross revenue in the second quarter, especially regarding export. Prices and mix have added revenue, especially price, and the price mix has helped a lot bring more impact in price adjustment. Regarding CPV, we can see that there was an improvement on the second quarter. It's the third quarter in a row that we've been watching improvement on CPV levels. We've been mentioning that since last quarter in 2023, that we've been watching the withdrawal of the price of raw material. We are still watching that happening right now. We, we saw that there was a delay between the price of gross, rather input material and raw material, and it started impacting the first quarter. In the first quarter this year, there was an impact that it was a little bit stronger, and it was more significant in the second quarter now. CPV has withdrawn 19.5% in the first quarter, being the heaviest withdrawal in the raw material was 27.1%. Manpower fell 12.7% and other expenses, 11.5%. We can see the total CPV from 19.5, it falls more than the net revenue that fell 10%. If CPV, CPV falls more, then the net revenue, we have margin. We have 6.7 percentage points in gross revenue. All components have shown withdrawal regarding how much they consu- consume from the liquid revenue, but we have raw material that withdraw 5 percentile points when compared to, to net revenue. We have one, 0.5%, and the other one, 0.3 percentage points. On this slide, we have the behavior of the main components of our CPV. As you can see, since the beginning of 2022, we can see a withdrawal, and we- we're still watching this withdrawal this year. The only indicator that we've had so far that went forward, we can see manpower regarding the collective decisions regarding payroll. When we see the average roll, and we see the components regarding the PVC, we can see that it's 4.1% above the average cost for replenishment. What does, what does it show? We have opportunities, and we have for raw material. We can have improvement in the raw material, so we can have less than the net revenue. On this slide, we have here our jump regarding inventory, and we can see that in the second quarter, the volume is like close to BRL 440 million, and we have the second quarter with BRL 437 million. That shows that we are with a very healthy level of inventory. We left an indicator of 79 days for inventory to 65. That's great. It's important to point out that we work with the fashion industry. Inventory of finished products, and we're dealing with fashion, the longer it takes to be sold, this inventory will lose value. When dealing with, with the production only, we produce only when we have the orders, we reduced this level of devaluation or depreciation of inventory because it takes too long to sell. Both inventory in the industry is healthy, and when we see the level of total inventory and finished pairs and components with footwear, our level of inventory is healthy, just like the level of our clients, both in Division 1 and Melissa. We are all working on levels that are lower, like around 30 or 45 days below historical levels. Regarding our recurring operational expenses, we can see that they have recoiled as well. Because of that, and that they have the net revenue that recoiled 10.4%, operational expenses, especially the recurring ones, are representing 2.6 percentage points more than the net revenue. They left from 31.1% to 34.7%. You can see on the right, we can see on the opening of all these recurring selling expenses, we can see the commercial ones and the general ones, and administrative. The variable ones are those that change according to the net revenue. If net revenue drops, the variable expenses also drop as well. Within that, we have commissions, freight, shipping, and licensing. Marketing, which is investment in publicity and marketing. We are regaining and we are taking investment again. We've invested $16.3 million. The first quarter was BRL 21 million, so we can see it's a growth of 31%. After that, we have the other operational expenses, and the main component that has been growing in the second quarter are the conventions. That they are growing around BRL 5.9 million more when compared to what we had invest in the second quarter last year. This is because it was the first year after the pandemic, that we've had the convention of the three markets. We have the convention of Division 1 in Gramado. We had convention of Melissa's convention in Fortaleza, in the Northeast, and the global of the external market in Maceió, in the state of Alagoas, to all our distributors. It's a very important moment that we presented the Spring/Summer 2024 collection to our clients, both in Brazil and overseas, in which we realized a great receptivity, I would say, when we presented. They took it very positively. Personal expenses are growing, yes, but they are growing even below the historical levels. In here, they are growing, even when we consider the addition of all structure of Melissa's team in order to manage the franchise network. Even if we consider this improvement and this increase in the number of people in all collective payroll, we can see that we are growing 2.1%, even below the levels of collective decisions. When we look at admin expenses, we can see in taxes that it changes BRL 1.7 million. There is like a mismatch, that we have the, the building taxes in Sobral, that it was paid in the first quarter, but in this year, we paid in the second quarter. From BRL 1.17 million, that is BRL 1 million, that it is like Sobral's building tax. Personal expenses with admin grew, like, 5%, also below the levels of payment agreement that we had around that time. In the city of Farroupilha, the agreement was over 10%. Fortaleza was September last year, it was over 8%. In Sobral, we had this year that it was above 5%. Even if we have high agreements to payroll, we were able to keep the personnel expenses, and that because we adjusted the admin structure, both in the admin expenses and the commercial expenses, so we had an adjustment of around 15% of the headcount. Moving now to the EBIT, recurring EBIT. It left BRL 11 million to BRL 18.7 billion, so it was around 160%. The main component that has contributed to this growth in the EBIT was the improvement in the COGS. We have around BRL 28.7 million that stand for non-recurrent items, and from these BRL 28.7, BRL 20 million respond to assets, and we have a provision for creditors and to retail in the first quarter. We had three large retail networks. With one of them, we have to renegotiate, so we reversed that revision. Then we can see managing franchise, which is commission, that we're still paying with a master franchisee due to the contract that envises that we should be keeping paying the sell-in of Clube Melissa that haven't reached 60 months old of existence as from the termination of that contract. Our net financial revenue, as you can see, reached BRL 72 million compared to BRL 67.6 million. It's a 7% growth. Even if we consider an expressive cash expense due to paying extraordinary dividends of BRL 1.8 billion that we paid in May 17th this year, and BRL 68 million that we've had in June regarding the first quarter results. The main components that have contributed was a lower recoil of the variable portfolio, that we've had a variation of BRL 15 million. In our portfolio, we have-- the only position that we kept was the one of variable revenue, and we have a positive variation of BRL 14 million for the AVP, which is around removing that revenue from the gross and the net and applying on the financial results. Our portfolio that we call the investment portfolio, that we invest on alternative assets, traditionals and bank investments, it closed the first quarter with a balance of around BRL 570 million. 84% of that portfolio, of that wallet, is allocated in projects for real estate development, 10% in variable revenue, like Vale do Rio Doce stocks, and 6% in private cash. Just like last year, it tends to be like short and midterm. Just like we have the real estate investments. As they mature, we receive the main interest and dividend, and we are not going to reallocate these products. We'll go to allocate in traditional assets, CDBs and public bonds. Going now to e-commerce. E-commerce has been growing. It grew quarter- by- quarter. It's been growing a lot, and as we have, like, seasonal products, our idea is to compare one quarter with the same quarter from the previous year. GMV has reached BRL 17.9 million of this quarter. It's an important growth, growth 28% when compared to the second quarter last year, and with more than 50-- I would say it more than doubled, regard when compared to the second quarter in 2021. The number of sold pairs grew almost 17%, so 16.9%, and it was around 175,000 pairs. The number of session grew from 13.3 million sessions, a growth of 14%. General participation of e-commerce in total sell-in the internal market grew from 2.8% to 3.6%. When we isolate that considering Melissa alone, we can see that regarding the general penetration, the market left from 9.9% to 12.8%. Just to get your attention to the app, as I mentioned, it was released in April this year. We are still in the process to mature the app, but on the third month, ever since the release, it showed 18.2 of online sales from Melissa. It doubled in size from May to June. We can see great potential locked. When I say locked, I mean that we're not investing on media to bring more flow to the app. Moving on now to Grendene Global Brands, we can laying brick by brick so that when we look into the future, we can have, like, a solid, beautiful house and the representativity in the external market, which is a lot higher when we compare to the previous year. The moment that GGB is like we're strengthening our brands and building distribution channels. We've been investing in programs with digital influencers in the U.S. and multi-investors, different from what we've been doing in China. We have influencers that are highly recognizable in the fashion community, so that our brands can become better known, and so that we can increase the brand awareness of our brands. We've had an amazing coverage from Melissa's magazine in the U.S. It was amazing. We've invested on Ipanema's campaign, Endless Summer Road Trips, which are those images that you can see at the bottom left. That is a van, a pink van, and that it was driving around Florida, publicizing our brands. In China, we've invested heavily to hire Rosy Zhao, who's a Chinese celebrity with more than around, like, 30 million followers in her account. Focus now is to strengthen the brands, to have initiatives so that we can publicize our brands and building distribution channels. How is the performance in the first quarter? Total sell-out grew 168% when compared to the first semester last year. We left from $7.3 million to $19.6 million. We know it's a small base, but if we take brick- by- brick, forget quarter- by- quarter, we can see we've been watching the steady growth of our revenue in GGB. Growth in the U.S. was up to 60% when compared to the first six months. Melissa's e-commerce is still growing and a very robust growth. It grew four times, more than four times, when compared to the first quarter of 2022, from $1.3 million to $5.2 million. Ipanema has been growing steadily on Amazon. Sales are climbing month by month. A point of attention in the U.S. is the wholesale and the physical stores. How can we summarize GGB in the U.S.? Well, online is doing great. On sale in, in physical stores, we have, I would say, a slow performance. Wholesale is like retailers, American retailers, they are stocked up, they have lots of inventory. They're not that open to work with new brands, with new manufacturers. The way we can commercialize our products at this moment, well, the, the front door is bulk shipping. How does that work? They release our products, they publicize our products in the online shops, but the inventory is with us. Every time there is a new sale, their system talks to us and we ship the product. This is an entry, because as retailers see that there is a nice demand of our products, only then will they be able to have a new order to replenish their inventory levels. Physical stores, the focus point is that we haven't found that exact moment that would, you know, be feasible for those shops. We're trying to find the best formats, the best size, in order to make physical stores feasible. China is coming in a, a robust evolution stage ever since they stopped with the zero policy. Sales grew 15% when compared to the first quarter, and they are growing steadily since we hired Rosy Zhao. That was in the first quarter of the first semester this year. Just for you to have an idea of the performance we have been having in China, they have a huge festival they call the 618, represents a significant share of our online sales of the year in the segment. Last year, Melissa was. It was in, qualified in the 350, and the biggest sellers of Tmall festival. This year, we are in the 406th position, so is a very robust growth. That came from the initiatives of spreading out Melissa around China and hiring Rosy Zhao as the ambassador of the brand. Here, my last slide of the results. I'm not gonna talk about the half, because we were talking about the first quarter, three months ago, and I'm talking about the second quarter. The volume on the first half of the year, which is a 7.1% in the foreign market, 30.4% is a decrease, and in, in the internal market, we grew because of our brands. The gross revenue is down 2.2%. In the foreign market, we have a decrease of 27.4% gross revenue, and we have a growth of 7.3% in the domestic market because of brand, brands one's divisions. The gross profit grows 5.4 percentage points. The gross profit reaches BRL 407.7 million, which is a lot of growth compared to last year. The recurring EBIT grows 62.1% goes to BRL 103 million, and we gain margins in 4.3 percentage points. The recurring net profit decreases, I mean, sorry, it increases 17.2% to BRL 240 million, and we have gains of 4.7 percentage points of recurring net profit. Talking a little bit about the accumulated results of the dividends of the first half, the net profit was BRL 108.4 million. We have BRL 95.1 million of incentives, tax incentive reserve. For legal reserve, we have BRL 85.2 million. As we have reached the level of social capital, we don't need to constitute any legal reserves, additional ones. The amount available to pay dividends is BRL 85.3 million. We have paid already BRL 68.1 million when we released the results of the first quarter. We still have BRL 17 million to distribute. This BRL 17.1 million will be distributed as dividends. They will pay as of 6th of September for the shareholders that have Grendene shares from the 21st of August. From the 22nd of August, the shares are X. The BRL 17.1 million represents BRL 0.02 per share. Here, we have a graph showing a volume of paid dividends since the opening of capital, the public listing, which was BRL 6 billion. If we update by the IPCA, is BRL 2.8 billion, and when we update by the CDI, the accumulated value is BRL 10.3 billion. What I had to say, people, for today, that was it. Before going to the Q&A session, we have a great announcement. Yesterday, we closed a deal with Shakira. She's gonna be our global ambassador of Ipanema for the Summer 2023-2024. We're gonna use Shakira. For the domestic market and for the foreign market, GGB also. We have great hopes on the results that Shakira can bring to us in the Melissa brand when we close this deal. That reinforces what I mentioned before, when I was talking about the recurring operational expenses, that we are resuming investments, very significant investments, actually, in advertising to strengthen and build our brands. What I had to say for now, that's it. I will open it up for the Q&A session. Now, we are gonna ask the Q&A session, reminding you that if you wanna ask a question, you have to click on the Q&A button at the bottom of the screen, write your question, and then you're gonna be in a queue. When you are selected, you will receive the prompt to open up your microphone, then you open it to ask your questions. We ask you that the questions are made all at once. Let's go to our first question. It's from Renan Santoro, from Bradesco. Renan, we are gonna open your audio, so you can ask your question. You can proceed, please, Renan. Renan, you can proceed with your question, please. Having the problems techniques. If there are any technical problems, let's move to the next question. Now we'll go back to Renan. Next one is from Eduardo Marcelino Ribeiro, an investor as an individual. Eduardo, we are gonna open your audio, so you can ask your question. Eduardo, you can proceed with your question, please. Eduardo, you can speak. Eduardo says that: Good morning. How concerned is Grendene about the sales in Argentina with the current crisis? Do markets have barriers to buy the products? Does Grendene think about going to other markets, to migrating to other markets? Well, Eduardo, thank you for your question. I'm going to start by the end. We are always prospecting new markets. As our objective is to expand the sales of our products on the diverse continents and markets to try to reduce the concentration that we have in Latin America. Around 60% of our exports are for Latin America, so we have space to broad our exports to other regions, especially United States and China, which are the countries that have the GGB focus. Argentina has always been a great market. They have always purchased our products, but in the past years, they have been suffering because of their political and economic crisis. It's Of course, it concerns us because it was always a relevant market to us, Grendene has as its policy to export, as it receives credit letters. Nowadays, we are not being able to find banks in the market that issue credit cards to Argentinian exporters. This makes our exports process for the country more difficult and re-related to barriers and difficulties to have the permits. In Bolivia, for example, in Argentina, India and Myanmar are some of the countries where we have observed our importers are having difficulties, finding challenges to, to be able to obtain imports licensing, licenses. Thank you for your answer. We would like to continue with Renan, from Bradesco. An analyst from Bradesco. You can proceed with your question, please. Hi, Alceu. Can you hear me now? Yes. Thank you. Two questions. In Division 1, with the inventory, in-- with low levels, what are you gonna do about the selling for the first quarter, especially that Alpargatas are going more aggressive? How can you see the evolution of the market share? Talking about the volume of GGB products, can you tell us a little bit more about the numbers of GGB and how are they performing related to the initial targets to access the markets? Related to Division 1, we can-- Talking about market share, there is a channel where we can measure market share in a more effective way, the food channel, the self-service channel, because there is a tool called Instant- Tech, that measures the share in this channel. If we consider the second quarter. We have increased our percentage points in the share of this channel, because when we check the accumulated on the first half, this 0.8 percentage points goes up to 1.0 percentage points. We have been increasing our share in this channel, which is the channel where we can actually measure it. This is less representative to Grendene. It's 10%-12% of our sales in the domestic market of Division 1. The more important markets are retail and the indirect channel, the distributors and retailers. In these channels, there is no tool where you can, you can use to measure the sell-out. What they have is an internal tool that we have in partnership. Yes, Grendene, in partnership with our channel, he gets, like, 70% of our clients for the indirect channels of the volume. That will give a good dimension, a good idea, because these clients are spread out throughout Brazil. It can be accurate, the sell-out levels when we measure this way, and our sell-out is growing in a market that's decreasing, actually. That indicates, in conversations we had with our clients, it indicates that our products are gaining market share, either through being more competitive price-wise, or when we compare our prices with the competitor ones, especially the Ipanema ones, we always had a gap of 10%, 15%, and nowadays it's bigger, it's 10%, 15%, 20%, because during the pandemic, we had a lower level of readjustments, so we didn't want to impact the volume of sales, because volume is a huge driver of sales for Grendene. Secondly, because we understand that our product is a flexible product. If you touch the price, you touch demand. As we have readjusted prices for inferior levels to our competitors, the gap between our competitors and us, it's bigger. Our product is more competitive related to prices, which is really positive in a scenario of compressing of people having less purchase power. Price, collection with heat products, it's what's helping us to sell our sell-out. Just for you to have an idea, Renan, we have launched in June, in our convention, our Sempre Nova collection, our Always New collection, which is our flagship product from Ipanema. On our first month of our product, the clients of Sempre Nova in June, we had the best selling month of Sempre Nova, the best one in the past six years. The products are highly competitive because of price and because of their design. Related to GGB, Renan, for now, we're not opening numbers of volume. As the operation matures, we are going to open up these numbers. Related to expectations, it's inside our expectations. Online sales are performing above what we have expected, and the wholesale has been performing a little bit low, but not because of performance of our professionals, our GGB team, but because of our market conditions. When we created the business case, especially for the wholesaler, we didn't have this scenario of retail, of North American market with high inventory levels. We didn't have this COVID in China, zero COVID in China. We didn't have retailers in North America wanting to reduce numbers of manufacturers and not wanting to have high inventories, wanting to repass all the risk to the manufacturer. within the current scenario, I think GGB has been doing a very good job, much superior than what we have imagined if we didn't have this partnership. Thank you, Alceu. Johnny, we're going to enable your audio so that you can ask your question, okay? Johnny, go ahead. Hello, Alceu. I sent the question in the chat, I'm going to read it. Do you think you can tell us more about the operations in China? Are the products produced in Brazil, they're exported, or do we produce them in China? It got me thinking because regarding production, China is way cheaper. On that regards, thank you. Well, thank you, Johnny, for your question. 100% of our production, both internal, domestic, and overseas, is carried out in Brazil, in the state of Ceará, in the northeast of Brazil. We produce in Brazil and export to the other geographies in the world. China is very competitive, you're right. Grendene, our main com, leverage is our capacity to, to produce and the textile. We have better quality, and we are more competitive regarding the textile environment. Before the pandemic, Grendene was selling shoes in the world, and we had the highest EBIT margin. Mostly speaking, that was a result of the textile resilience we have in Brazil. 100% of our production is done in Brazil, and whatever we export and we sell in China is exported from Brazil. Moving on to our next question. That's from William Ramos, from an investor. William, we are going to open your mic so that you can ask your question yourself, okay? Go ahead. William, you can go ahead and open your mic if you want. Moving on with your question. He asks: "Hello, congratulations on your results. How long do you think you can reach the break-even with GGB? How are sales behaving in Brazil, both in Brazil and abroad in the third quarter?" Well, thank you for your question, William. We're updating everything at GGB regarding our business plan within, I mean, for the next quarter. Our expectations is that by the end of 2024 and beginning of 2025, is when this operation will reach the break-even point. Of course, that will depend especially on the performance. That's where the, the largest volume is. We, we don't provide guidance regarding the future, even if we compare with the first quarter. What we can actually say is that we've been, we've been watching at Melissa, especially because we developed a hits collection, which is six products that have been developed, especially to come to the stores and have good development and performance. Melissa has been performing higher in the in the sell-out rather than the sell-in. We can see that in this division. As expectation for the second quarter, actually the second semester, that would do 60% of our sales, we are expecting a positive semester, even though we know that we're going to face a harder scenario. We know that there are some triggers. Inventory for our clients being the market on Melissa's division on a lower level, interest rates have begun to shrink, inflation has been shrinking slowly but surely. Unemployment has been improving, there are some short-term triggers that can help so that we can have a more positive second semester. Thank you for your answer. Now we are going to close our Q&A session. I would like to call now our Mr. Alceu Albuquerque for his final remarks. Well, thank you for being here with us in our, in our call. Thank you for your questions. Our relations, our PR team is available to talk to you and have a great day. Again, thank you for coming. Our video conference regarding the results of the second quarter in 2023 is now closed. The PR relations with our investor is available to answer to any other questions that you might have. Thank you very much for the participants, and have a great day. Thank you.