Good morning, everyone. We're going to begin the Conference Call for Renner S.A., so we have a different audience because of this situation in Rio Grande do Sul. With me, I have Fabio Faccio, our CEO, and Daniel dos Santos, our CFO, who has connected from São Paulo. Before I hand over to them, I will make some announcements. This conference is being recorded and simultaneously translated, and the presentation will be shown in Portuguese. However, the presentation in English is available. The link is available in the chat The questions from the press can be sent to our press relations at 11 3165 9686. Before we continue, I'd like to mention that any statements made according to forecast goals are beliefs and assumptions based on information currently available, and it depends on circumstances that may or may not occur. During the Q&A, the questions may be asked by audio or chat. With that, over to you, Fabio. Thank you, Carla. Good morning, everyone. Before I begin our earnings presentation, I would like to express my deepest sympathies to the hundreds of lives lost in the state of Rio Grande do Sul and also offer our solidarity to the thousands of families that have been affected and thank our entire team for their efforts and everyone that is somehow helping in such a sad and challenging moment for all the people in Rio Grande do Sul. We're endeavoring our efforts with this chain of solidarity. Since the beginning, we've had a dedicated team to welcome, flexibilize, and assist our employees that live in locations that were affected. And in addition, through the Institute Lojas Renner, our social arm, we have coordinated actions with entities and official agencies to rescue and assist the communities that were affected. We continue to articulate partnerships with other entities and companies to increase the power of the cooperation in our state. Now it's time for us to come together and support and take care of each other. And for those who are interested, we've published on social media some of the examples of the actions that we have conducted so far to support the people that have been affected. If you are interested in helping, our stores are operating to collect donations as well. We have the official bank account of the state if you'd like to make your donations in money, and we also assist companies outside the state that would like to help and don't know how. We will continue to help to rebuild this amazing state. Based on the operational point of view, during the more critical moment, we have approximately 2% of the total units of the company that are completely closed. At the worst time, it was 4%; up to yesterday, it was 3%. Now it's 2% of the total of stores closed. It's also important to note that we do not have distribution centers in the state of Rio Grande do Sul, and the impact in product supply coming from our partner network is not material. The actual impact is in traffic in the stores in the state. So we are all working together for the state, and we're counting on your support for our state as well. I'd like to hand over to Daniel so we can talk about our results for 1Q 2024. Thank you, Fabio. Good morning, everyone. Let's start by talking about our sales performance. The first quarter had consistent performance during the entire period. We had growth that was anchored by the increase in transactions, meaning number of tickets and number of pieces, and growth in all our businesses. When we consider apparel alone in Brazil, we had an increase of 9% performance greater than the year-to-date PMC. So we had good performance in the transition collection, assertive products, followed by the increase in traffic in the stores. And that's a reflection of the marketing and competitive efforts that we've had and that we've been mentioning in the past interactions that we've had with many of you. It's worth noting that there's still the impact of stabilizing the distribution center as well as the credit side that, in a way, limits our sales potential. Now looking at our divisions and our business units, we have a growth of 8% year-over-year. There's adjustments in the collection transitions. Camicado has a growth of 6% year-over-year, a highlight of the revenue per square meter that grew approximately 17%, a result of the continuous operational and commercial evolution and all the changes we made in the period, and many of them that we've been mentioning during our conversation. Our digital channel had a growth of 12.8% greater than the company average, with an increase of the customer base, more visits, and we continue to gain efficiency and profitability in the digital operation. Now moving on to margin evolution. The gross margin in retail increased year-over-year because of the combination of cost, more balanced exchange rate, and a collection that, even though we had to adjust the entry-level prices with more suitable prices and others, these prices are in line with historical levels. So we have collection being developed and bought in season, brought on more flexibility to the operation, and that, in addition to the efforts in releasing older inventories and making the collection fresher, led to a reduction of 22 days of inventory and the financial amount of inventory. That's 9% lower year-over-year. In SG&A, the participation or the share of SG&A on the revenues in retail is relevant, especially a reflection of the leverage that we had given the higher volume sold and more efficiency in expense control that had a nominal growth at lower levels compared to inflation in the period. There are two points that I would like to mention. That one of them is that across 2023, we had some structure adjustments that made us have additional expenses compared to the previous year that are non-recurrent. Second, the additional expenses of the distribution center in São Paulo had an ascending curve in 2023, so the expenses in 1Q 2024 are still higher than the ones incurred in 2023. Our expectation is that across the second half, we will see a reduction in the non-recurrent expenses compared to the previous year. About our new supply model or replenishment model and distribution center is continuing in the stabilization process. We're progressing, but it's putting pressure not only on cost, as I mentioned before, but also at the level of services and the service in stores. So we're also affecting our sales potential. The normalization and its impacts are inherent into the process of change, and we continue to work to normalize this in the second half and that we can collect the benefits and all of the advantages that this new model will have for the company. The digital channel is still gaining efficiency with a reduction of 2.1 percentage points in the share of expenses in the channel. For the 11th consecutive quarter, we've been positively evolving in the profitability of our digital channel, main highlight going to the CAC. Other operating results have grown, especially regarding the effects in the period, but it was neutralized based on the profit-sharing program result. Now moving on to our financial institution. The total portfolio had a drop year over year as a result of the reduction of the past due portfolio that had a 16% reduction and lower volume transacted in the cards and less cards that are fit for consumption, given the credit restrictions that were implemented in the past quarters. If we analyze the paid portfolio, the reduction was 3.5%. Revenues for the quarter had a reduction as a result of a portfolio with a better credit risk profile. Now, in March, 93% of customers were approved that had minimum or low level of risk compared to 79% year-over-year, but the net losses presented a significant reduction of 24% year-over-year as a result of all of the measures that were adopted in granting, maintaining, and collection that improved the risk profile and resulted in a lower need to provision losses. There was also greater credit recovery as a result of the active collection efforts in the Realize team. Operating expenses, on the other hand, grew year-over-year, especially in non-recurring contracts with third parties. We had BRL 22 million in improving the credit and collection process, which was a non-recurring amount. By adjusting that amount, the total Realize results was approximately BRL 35 million. That's the operating result. An important evolution result of all the efforts to contain the risks in the portfolio that makes us more confident in going back to origination and offering credit gradually in the second quarter and the second half of the year. Now a little more about the portfolio indicators at Realize. Some of the points that I would like to highlight. First of all, we continued to present an improvement in the NPL 90. That was lower than 1Q 2023 and 4Q 2023. Over 90 presented a reduction of 1 percentage point year-over-year and 1 percentage point quarter-over-quarter, reflecting the measures adopted to improve the quality of credit in the portfolio. The new vintages still have good quality. We've observed an improvement from 1 to 60 days year-over-year. We always have a seasonal effect of the first quarter compared to the fourth quarter, but we still see an evolution in the quality of the shorter-term portfolio that makes us feel confident regarding the credit risk that we're carrying in our portfolio. Now moving on to EBITDA and net income. Total adjusted EBITDA had a growth year-over-year given the better performance in credit and retail. We had an increase of 4.3 percentage points to the margin. Free cash flow generation of BRL 197 million, mainly resulting from the higher operating results, better management of working capital. As a consequence of the better operating performance, we had net income with significant growth of almost 200% year-over-year. Better financial results also contributed towards these results. We had BRL 33 million in monetary collection from Argentina and BRL 16 million of interest on tax credits. Notwithstanding, the subvention amounts in the year-over-year comparison has also affected the total results of the net income. Now handing back over to Fabio, and then we can begin the Q&A session. Thank you. Thank you, Daniel. I'd like to mention a little bit about our future expectations. So we continue to evolve in the main strategic projects that are essential to position us ahead in this segment and become increasingly more the reference in fashion and lifestyle, enchanting experiences, and responsible fashion. That's something that we've been working on and we've been bringing to you since last year when we presented the first Q of 2023 and also during the investor days. So within the same strategy, the same sequence here. And in the past quarters, we've had some adjustment in investments to make Renner increasingly more competitive, ready for the new cycle of growth and gaining profitability. In this first quarter, even with the pressure in the moment of transition, we've already seen the beginning of the results of this work. We know that the scenario still brings on challenges, but we're stronger, prepared, and sure about our capability of enchanting customers and gaining market share, generating value for our shareholders, employees, and customers. We have a cash position of BRL 2.4 billion, which is a differential to compete in the current scenario. That's how we go in and advance into the second quarter. We believe in the continuity of sales that is leveraged by pieces, by high volume. We also had an expectation of a second quarter with a similar growth to the first quarter. However, the extreme climate events that we've been feeling since April make this expectation even more challenging, probably a pressure to our sales lines in the second quarter. But still, with value generation, results generation, and about the expectations for the year, they continue positive, and we see that as a one-off effect in the current context. We're also well-prepared for Mother's Day events this week and also subsequent events that we will have during the quarter. Our inventory is adjusted and renewed. Even with adverse events, we can work with an increasing gross margin and with more efficiency. Digital continues to evolve in this front, and these operations, the operations are leaner. Digital is more profitable with a better level of service. As Daniel already mentioned, we're in the final phase of the stabilization project for the new supply model. It's still putting pressure on our results, not only in cost but also service levels at the store. Therefore, it did drop in the past quarter our potential of sales that could have been higher. After the transition, it will be, and it will be a lever for those results. But right now, it's putting pressure not only in sales but also in cost. And after the second quarter, especially, it will be a positive lever in that sense, in cost reduction and increasing sales and margin. The effect and the pressure at this moment in the first quarter and fourth quarter and during the second half is natural in a migration when you consider how big it is. It's not just migrating the DC, it's an entire supply model. So we continue to work at the end phase of normalizing the distribution center, and we already expect very positive results during the second half. The distribution center will enable us to have an integrated supply model in between the channels with potential to transform our business. It It enables us to have more granularity per store, per SKU that no other operator has. It also enables us to have full integration between channels, inventory, and service. In credit, we also expect continuity of a more favorable dynamic by reducing losses and operating expenses, even though we have challenges in revenues given the low-risk profile of the portfolio. We've also reviewed our entire credit model with more qualitative attributes and variables that will enable us to progressively and gradually flexibilize the selective offer to our customers. We've started that process in March, and we trust in Realize's evolution, and we believe it will move forward with positive results in the upcoming quarters, generating a positive contribution in retail still in 2024. It's important to note the historical seasonality of Realize, especially in between the quarters and the second and third quarters, mainly. So even with all the short-term challenges, we're working towards another profitable quarter in line with 2024 where we begin to reap the benefits of our investments and reduce the expenses that were resulting from the implementation. So in a year of recovering our profitability. Now I'd like to hand over to Carla and still ask us and guide us in Q&A. And we're open for your Q&A. So now we begin the Q&A session. So you can ask your questions by raising your hand, clicking on the icon, or you can write your questions down in the Q&A session. Please ask all your questions at once when you're called. So I'd like to start with the question that will be asked in person. The first one is from Thiago Macruz from Itaú BBA. How are you doing, Macruz? Hi everyone. Good morning. I have two questions. My first question is about Realize. So Daniel and Fabio already mentioned this a little, but I'd like to understand if, in your opinion, in your expectation, if we will see the private label portfolio growing again in 2024, is that what Fabio means when he's saying that Realize will go back to being an enabler and helping your retail operation? Again, that's my first question. My second question, it's very clear that the distribution center has been a temporary challenge. A business, something as big as that is and that big of a change, it's clear. I understand that part. But I'd like to understand the size of the impact. Is it a bit of cost, a bit in sales? Do you have any dimension on that? Do you have any metrics that you're monitoring internally that you could share with us so we can understand the size of that impact? Those are my two questions. Thank you. Good morning, Macruz. Thank you for your questions. I'll start. And then I'll hand over to Daniel so he can add. About Realize. [Foreign language] Well, when we say that we've reviewed the model and we're granting credit mainly focused to consumption in our own ecosystem, so we're little by little granting a little more credit, reactivating some customers, some of the credit, but in a gradual and responsible way across time. That should little by little give us the growth of the private portfolio or our own consumption. That's our biggest focus. Daniel, would you like to give them more flavor about Realize before I answer the next question? Well, Fabio, no. And Macruz, your question about the potential for growth, I would say we could have a potential of growing the portfolio, yes. But about the dynamic, we see that the delinquency levels for the portfolio are adequate, and we'll begin a movement in origination. Obviously, the market and the external environment aren't the most adequate, so we see indebtedness in households increasing. We will monitor that evolution so we can calibrate that credit offer. So the potential to increase the credit portfolio exists for CCR, but is that a target, a goal? No. Our objective, our goal is that we have a number of customers that Fabio mentioned that we lost during last year. Customers were loyal to the brand that were long-term customers and had financial difficulties. Unfortunately, we lost them. The biggest objective now is how we rescue that base and the speed of rescuing that and the speed that we can work on the origination, especially because origination will happen with private initially. It enables us to grow the private portfolio in the beginning of the year. We believe there's that potential, and we will monitor that during the year, during Q2, Q3. So yes, there is a potential for that. Now moving on to the second question about the impacts to the distribution center impact, not only in sales but also in cost. I would say that in cost, we disclose that, and Daniel can remind us of that. In sales, we have the estimates, but it's really hard to set the amount because sales have a lot of variables to them. So yes, there is an impact in the pressure that the distribution center has had with longer lead time in the beginning. With that, we had disruption in replenishing some stores, so the product was coming in later in the fourth quarter and first quarter. That disruption leads to loss of sales. But what the impact is, it's really hard to mention because the biggest component is the part of the collection, and there's other components like the weather issues. So there are a lot of variables in all of that to affirm what the actual impact is. But it does exist. It's something that we have to consider. When we look at the sales performance, it has an impact that is perceptible. We have to consider that in cost. As of the second half, it also has an impact that can't be ignored. Improving the margins, and then we improve the redundancy cost. So Daniel, would you like to mention that? Just to add, last year, we had an evolution of that cost during the year. We mentioned BRL 100 million, and BRL 100 million was accumulated in a growing way. We ended the fourth quarter at the highest level of redundancy. So you start off the first quarter with a redundancy level that is lower than Q4 but still higher than 1Q 2023. It still will happen. And between Q3 and Q4, we will see a reduction that we expect year-over-year. So in that gradual evolution, we have to bear in mind the BRL 100 million and the challenge of getting the reduction that we were talking about will mainly come in Q3 and Q4. And that's what changes and what we were mentioning. So we have to bear in mind that phasing out quarter after quarter when we consider the increment last year and a gradual reduction during this year. Okay, great. Thank you, everyone, for your answers. Thank you, Macruz. Next question is from Luiz Guanais from BTG. How are you doing, Guanais? Can you hear us? Can you hear me? Now we can. Okay, perfect. Thank you, Carla, Fabio, and Daniel. I have two questions on my side. First of all, can you mention the evolution of volume during the quarter? You mentioned that there was a leap, even sequential, quarter-over-quarter with a better trend. So can you share with us the volumes, how they behave during the quarter, and what we could expect looking forward? And the second question about price positioning. You've had a strategy in the past months as well of positioning assortment at a lower average price, not lowering the price, but more entry-level products that you mentioned in the release. So I'd like to understand the positioning, how it's going to behave during the year as well. Thank you. Thank you, Guanais, for your questions. The volume dynamic in the quarter continues. In the fourth quarter, we gained volume. We were having volume increase since the fourth quarter. In the first quarter, that continued as well. We had a mismatch in some months because of events. Carnival was earlier this year, and Easter was earlier. So we lost a little bit of that comparability. If we remove the non-comparable effects, we had the same effects during the entire quarter. So we're still growing volume. The expectation for the year is that we continue to grow volume. Logically, we had a similar expectation for Q2, and that should have an impact and pressure in that growth given the extreme weather effects, climate effects, so the extreme heat in April and May and the flooding that we've been facing in the south of the country. Yes, that may affect the volume growth in Q2. It should be lower than what we expected. But like we mentioned, our inventories are well adjusted. Even though we have that and despite that, we still see room for growing margins. I'll bring that together with your second question. With the competitiveness and price that we still have, and that enables us to gain volume and market share and growing our margin. So even with more appealing prices, we really worked on the efficiency in product development with our plant. We were able to bring in more competitive products with more competitive, more fashion, and better margins. So with the extreme climate event impact, we're already doing the math for that. That's going to put pressure on our margin as a result of the pressure on sales. But still, we do believe in margin growth because we're getting a good equation, so to speak. If we had a normal scenario, and that's what we expect for the second half, it would be growing volume with lower expenses with the distribution and less negative pressure from the DC and more positive pressure and margin growth even at competitive prices. And that enables us to have the volume growth. Great. Thank you, Fabio. Thank you, Guanais. Next question is from Eric Huang from Santander. Good morning, everyone. Thank you for taking our questions. On our side, we have two. So the first one is about in-season purchases that continue to advance. So I'd like to understand what potential you see in a potential increase of in-season purchases, so what we can expect from that, not only from sales but also margin. And going back to the climate issues in the second quarter, Fabio mentioned some pressure. So in that vision, would it be volume pressure, or should we see volume that continues to evolve but maybe a little less than what you were expecting initially? And the same thing for margins. Thank you. Well, starting with the second part about the second quarter, about the pressure. It's hard to say. Or to mention the growth for the second quarter. When I mentioned climate effects, we're going through the flooding in Rio Grande do Sul, and it's hard to say how long that will last, how long that will affect us. We have a few stores closed. Most are in operation, but the traffic drops. So it's a variable that's still early for us to estimate and to mention. So it's possible for us to grow volume even in the second quarter, probably at a lower level than what we had in the first quarter. Our expectation was that it would be similar, but it should be lower levels given the pressure, negative pressure. But even so, a possibility of growing volume and growing margin. About in-season purchases, moving forward, they become more relevant because when we talk about the next collections coming in and talking about future collections, we have a relevant part in domestic. Most come from our domestic suppliers. We're ready if necessary because it depends on the need. Up to 40% of national production would be in season in a short period, enabling us to work with renewed inventories. That's been helping a lot. Even during extreme climate adversities, we can navigate well and good renewal of our inventories and healthy margins. Perfect. Thank you for your answers, Fabio. Thank you, Eric. Next question is from Vinícius Strano from UBS. Hi, Vinícius. Hi. Good morning, Carla, Fabio, and Daniel. Thank you for taking my question. Thinking of the evolution in inventory, is there a contribution that you can highlight that was relevant for the distribution center in Cabreúva and the markdown effect and the inventory cleanup that you did last year? If you could also mention an opportunity to improve inventory with the distribution center and also the average lead time that you've been observing. And a second question, in payment method share, what do you see in terms of retail moving forward? Should be close to 29%, but what would you deem is ideal? Thank you, Vinícius. About the Cabreúva distribution center to improve inventory at this time, I would say that it's not even no, it's negative. It's been giving us negative pressure. So the new distribution center is a big lever for a business. It's a big differential, especially as of the second half. At this time, we take one step back to take five forward, right? And we'll soon do that. Right now, it's an offender. If we hadn't transformed yet, we would have better inventory turnover, better margin, and higher sales. But what's helping if it's an offender? It's helping to improve the product development lead time. We've already reduced that a lot for our collections in the quality of our products at competitive prices. And that's really helping a lot. At this time, the distribution center is still a big offender. So from the production to the distribution center at two stores, it's worse than the previous model right now. And as of the second half and in the upcoming months, it's going to become neutral. And in the second half, it will be a lever. And then in that case, it has the potential of helping not only in improving the turnover margin but also sales. Daniel, would you like to add before I go into payment method? No, I think you've covered it all. I'm not sure. I think you mentioned everything. Go ahead. About payment method, with this scenario that we faced in delinquency and we had the serious reduction in granting credit and limits, I would say that in our vision, in our expectation, the current share of our payment methods on our sales is at a lower level than normal because we did that. That's on us. We made some reductions to contain delinquency. And now at a healthy base and an adjusted model, we can gradually increase credit granting, and that would naturally lead to a higher share of our own payment methods in total sales. So it's really hard to give you a figure on that. And we do avoid to give you firm numbers, but it will probably be higher than the current levels. Perfect. Thank you, everyone. Next question is from Irma Sgarz from Goldman Sachs. Hi, Irma. Can you hear us, Irma? Thank you. [Foreign language] If you see any movement. And And the second question in expenses, extraordinary expenses that you had realized, I believe they were non-recurring. Given the consulting that you've hired to improve the models, I'd like to know if those expenses will happen again in the second quarter if it was just one-off in the first quarter. And the second one, about tax credit recovery, once again, that helps in the recurring aspect. So should we expect that in upcoming quarters, or should we recognize any more tax credits moving forward? Thank you. Well, about isonomy and extraordinary expenses at Realize, I'll start with that. And then Daniel will talk about the tax credit recovery. About isonomy, there's many actions in that, many institutions, associations, even the government, the legislature. That's ongoing. To have isonomy so that taxes are similar, so that national industry and retailers pay more and foreign retailers no taxes or lower taxes when we consider the state rate. So it's supposed to receive an opinion from the Supreme Court, from the National Federation of Trade and the industry to determine that's not a constitutional aspect in foreigners not having taxes and domestic players having higher taxes even on imported goods. So we're waiting for that opinion from the Supreme Court. And in parallel to that, and obviously the executive branch is studying that, I don't know what the action will be, but there's also a bill of law that's about to be voted, I think in the next week. It's a bill of law to determine the isonomy in the cycle of data, the cross-border aspect. So there's also an aspect of urgency for this bill of law compared to others. We should get a vote next week or in the beginning of the week after that. About the extraordinary expenses from Realize, it's consulting. Oh, sorry, I thought there was some noise here. Anyways, the Realize extraordinary expenses is a consulting firm that we hired for collection. It's not for the credit model. It was more about operations and reassess that and realize that it didn't make sense. So we decided to cancel that. So we had a one-off expense in that sense. So we did the operation, and we believe that we generate more value. We'll generate more value without that consulting firm. So we did the math, and value generation is very positive in the way that we did it. So recognizing the expense in the quarter and operating in a more effective manner moving forward. So that will generate more value for Realize. And if I'm not mistaken, and Daniel can add to that, we have a residual amount that should be posted in Q2. It's less than this one, though. So that's been resolved, and it should be very positive moving forward. Daniel, would you like to talk about the recovery of tax credits? Yeah. I would say that approximately 60% has to do with the credit that we showed at the end of last year. And the rest, we know the tax complexity in Brazil, and there's always some things that will come. The more specific part is done with, and from now on, regular operations. You may have eventual higher, lower amounts, and there are many tasks, aspects that are part of doing business. Okay. Thank you. Very clear. Thank you, Irma. Next question is from João Soares from Citi. How are you doing, João? How are you doing, Carla? Good morning. Just two quick ones. So first of all, about Realize profitability. We think of origination, and we consider a potential higher mix in private label and also revolving credit legislation. So how could it be structurally better? I'd like to go back to that. I'm sorry to insist on the distribution center about the duplication in expenses. So when should we see the stabilization happen? Is that second half of the year? Should it be stable already? And duplication in expenses, Daniel mentioned that that should gradually decrease during the year, but there's probably still a residual amount in 2025, correct? The last point is you mentioned in the opening remarks, and if I understood correctly, that unfortunate disaster in Rio Grande do Sul doesn't have an impact to supply, only store traffic. Is that correct? Thank you. Okay. I'll start off with the last one. About your last question, and then I'll go to the distribution center, and Daniel can end with the distribution costs and talk about Realize. Okay, Daniel? Well, when we talk about the supply impact, we do have an impact in supply to the stores in Rio Grande do Sul. We have few stores that were closed, but the ones that were closed are not receiving product for now. We have an expectation that they will open soon. We don't have any stores with a relevant impact. We don't have any relevant material losses in any of the stores. There's one that we're still waiting for the evaluation, but all the other ones we've been able to monitor, access all the equipment and products were stored safely, so we didn't have any major flooding in any of our stores. One was a little more affected, but it shouldn't have a relevant impact. So inventory losses or material losses for our stores is pretty much zero, almost nothing. About the supply chain, we have few suppliers in Rio Grande do Sul. Most of them are in the state of Santa Catarina and other states. In Rio Grande do Sul, we have just a few suppliers. Within that supplier base, few were affected as well. It's not the entire state that was affected. It's not all the region. So I'm here. I'm working from Rio Grande do Sul. We're okay, but there were some neighborhoods that were affected. And as with our suppliers, it's a small base of suppliers. And within this space, it's still a small part of them that were affected. So for product supply coming from our suppliers, I would say that it's pretty much zero impact. What we do have is supply from the DC to the stores. So some are closed, and the ones that are open, the lead time is longer because the trucks have to drive around the flooding areas, so they're longer routes, but they are being replenished. However, they do have a longer lead time. And about the distribution center, at this time, we're in the stabilization phase. We were ramping up at the end of the year, so that led to pressure. We had cost redundancy in order to not affect the operation. During the first quarter, we've eliminated some of the cost redundancy, and that led to higher pressure on the DC operation. So you take away one of the protections, you overload the operation, excuse me. And then we're going to have a new ramp-up of that phase. So it's a stabilization process that was planned during the quarter. And we still have some protection, so we don't put too much pressure on the new operations of the supercenters so we can improve the curve as fast as possible. So we should improve the stabilization in the quarter. It could be a little bit before. So we have productivity level that's very good in the past weeks in the distribution center. We've broken production record in the past week, especially. And at the same time, the supply was a little more affected to the south, and that affects the entire system. But I would say that the impact is small, but it also gets in the way of stabilization. But when you consider everything altogether, we believe that moving forward, the impact that was negative for sales or supply will become zero. And during the second half, it will become positive. For the expenses, Daniel will talk about that again. And then after that, you can mention Realize. Okay. Thank you, Fabio. Hi, João. So about the distribution center expenses, it's a little bit of what I explained in Macruz's question. So we start the year with the redundancy expenses that are higher than last year. But the idea is that we end the year, close the year, operating with these expenses neutralized. So today, we don't want to carry over to 2025. And that means that when we get to Q4, the operation would be normalized. And then moving forward, as Fabio mentioned, you can bring in all the benefits that we expect from the distribution centers, so operating 100% per SKU with more agility and accuracy. So that's the principle that we have today about the DC operation. About Realize, you mentioned the revolving credit. About that, we see that the impact is minimum. After all the final decisions and the conversations that we've had with you, the impact of revolving credit is very low. But the thing is that the industry dynamics have changed. So the level of profitability that we had in the past, we believe that in the future, it's going to be lower because we used to talk about 20% share of the total company EBITDA. Now with the Realize operation, we believe that the potential could be 10%-15%, and we'll be working for it to be approximately 15%. We can't forget that in the Realize context, that it also assists in our retail operation because it fosters credit and sales. When you have the higher share with the Realize card, it lowers the cost of operation, the MDR that we pay for the credit card operation, so that it gives us a benefit in the retail operation. So we have to consider both. This year, we'll see an evolution of Realize. It will be positive. It has the great potential to end the year on a positive note. Many changes that Paula is making at Realize, and we believe that by working on the product and the operational changes that we're making, so we believe that 2025, moving forward, we should get that 10%-15% share. Thank you, Daniel. Thank you, Fabio. That's very clear. Thank you, João. Next question, it's from Joseph Giordano from JP Morgan. Hey, Joey. Hey, everyone. Good morning. I hope your families are doing well in Porto Alegre. My question is about exploring the renovation for more simple operation that you're rolling out, not only for the checkout operations but also for the dressing room. So I'd like to know about the work that you have on expenses. So how many stores have already been rolled out to this format? What do you see in CapEx for the renovations for those stores? And second point, how does that translate? So not only in incremental revenue but also in savings and headcount and expenses for stores in general. That's my question. Thank you. Hi, Joseph. Thank you for thinking about our families. Our families are safe. The teens as well. Thank you for that. So the renovation, the remodeling. When we talk about sales and results, it's hard to just separate one single thing. And the comparable base is difficult because the renovation started recently, so there was a period where it was being renovated, and then you compare it to a period without the renovation. It's really hard to isolate the factors in just little time to actually say how much it would add more value to sales, but it does add value to sales. So it's been generating better sales value. It's a positive factor. What we recently did, we tested some of the stores where we had renovations with a much lower CapEx and intervention time lower as well, so we can get greater volume in that. So a complete renovation when it's really necessary, when the store is either older, so it needs bigger renovation, or when we believe that there would have a significant gain because of that layout and we need more interventions in that sense. At the Center Norte shopping mall, Rio Sul in Rio de Janeiro, and the Iguatemi of Porto Alegre were complete renovations, higher investment, and longer period of renovation. BarraShopping is being renovated currently. We would be selling even more. It's one of the biggest units that we have. It should be ready at the end of Q3. There's another model that we developed recently that we've used in some of the stores where we focus on what is more important in the new model, like you mentioned, the dressing rooms, lighting, equipment, and that's shown to be very positive. We have worked in a short period of time, lower investment, and gaining in more sales. That's the model that we should have in a higher volume, and that will give us better results as well. Perfect. Thank you. Thank you, Joey. Our next question are Andrew Ruben from Morgan Stanley. We have three questions. I think we already answered the second one. I'll read them. Realize is the first one. The active customer base decreased year-over-year. When you think about growth, what do you expect in balancing out the loans to customers and higher balance for the customers that have existing credit? Second one, we've seen news about the cross-border situation. Can you update for the apparel industry and how you're getting ready for that in terms of tax? And third, what visibility do you have for the CPV as we advance during the year, negotiations with suppliers, trends of input, and exchange rate? Do you expect that the scenario will become more or less favorable in the upcoming quarters? Daniel, you could talk about credit, and then I'll answer CPV and cross-border. Okay? So about the active customer base, since the beginning of the period, and about credit problems and delinquency and what we incurred. So moving forward, we want to recover that customer base. That's our expectation. So the speed of that depends on our credit risk perception. So if we will increase the customer base, yes. If we can recover the base that we had in the past, that will depend on the success we have in the credit risk that we will have in that base that we want to bring back. That's basically it. Fabio, just to add, he asked about new customers, new grants of credit, both actually. We're looking at good customers that could have an opportunity of getting a higher credit limit and bringing in new good customers. I think that's the path. About cross-border, I mentioned that already. Just part of the question is, how are we getting ready for the scenario? The scenario is less isonomic, and we see higher competitiveness in gaining market share. So moving forward, I've been talking a lot about the second half because we have the second half of the year event that. Specifically and with the climate issues, but we do have an opportunity to gain market share even with this event. The expectations would have been higher. We didn't expect the extreme event as we see here, but we still have a positive expectation, lower than last year, but still with gains in efficiency. And then moving forward, we have an expectation of growing, still growing, and in both scenarios. So we're well adjusted for that moment, which is the worst moment in isonomy, and we're gaining market share, growing volume, well adjusted with a healthy margin. And any different type of scenario is even more positive. The more isonomy we have in this scenario, the higher the potential. About cost of goods sold, the margin expectation is still positive. Even in our imports, we hedge them. So everything that we buy, we already know what price. We could buy it. We can sell that. We're not subject to major effects variation. So our scenario is very stable in that sense with a higher margin and margin growth depending on the quarter, maybe higher or lighter growth and expectation of margin growth even in a more competitive scenario or not, and even with the specific case in this quarter. So it's a positive scenario moving forward. Next question is from Pedro Tineo from Safra Bank. How are you doing? Good morning. Thank you for taking our question. I have two. So the first one, I wanted to explore the portfolio coverage, not only for the Renner Card but also Meu Cartão that exceeded the over 90, and since 2022, it hadn't exceeded that. So tell us about the dynamics of that level of coverage of the portfolio. The second one, thinking of the rates and after the impact of the provisional measure for the other quarters, next quarters, can we consider the same dynamic for interest on equity and a tax because of this subvention? Thank you, everyone. Daniel, you can answer that one. [Foreign language] So can you mention that part of the rate for the grant? I'd like to understand better if the levels that we saw in this quarter should be the same as the other quarters. Oh, okay. Okay. I'll talk about both of them. Improvement in coverage is as simple as the fact that we had an improvement in the portfolio. So he had mentioned that the fact that we had a part of the portfolio that had more over 90 gives us a reduction of the coverage. And when you see a reduction in over 90, the coverage improves. It's as simple as that. So when we talk about the grant levels, yes, because we lost the deferred, and that's already reflected in Q1. Perfect. Thank you. [Foreign language] We have the last question from Gustavo Senday from XP. How are you doing? Good morning. Thank you for your question. Just to follow up for the climate issue, can you mention. [Foreign language] How about the levers that you've already used to try to mitigate the issue?[Foreign language] And maybe something. [Foreign language] So the levers to mitigate that impact, that would be excellent to hear that. Gustavo, [Foreign language] So like we mentioned in the beginning, we have.[Foreign language] Better development in terms of collections and speed, having leaner inventories, and therefore the collection is more in season. We've also seen warmer weather in general, so that was already the expectation. It was even hotter than what we expected, but we already knew about that, so we were ready for that. [Foreign language] So more assertive. Leaner. And that enables us, even with some challenges in the climate change. [Foreign language] We could grow. [Foreign language] Even with the challenges and growing margin. [Foreign language] All the improvements that we have in developing the collection enables us that even though there's adverse weather, we can grow volume and grow margin. [Foreign language] What wasn't part of the map was the specific issue with the flooding. That was something that we have to adapt to. But besides that. So even with unfavorable weather, our model responds well to the challenges that we will always have. So we're ready, agile, and flexible to present you with the best collections in any weather. Perfect. Perfect. Thank you, everyone. Well, with that, the Q&A session is now over, and if any questions were not answered during the call, the investor relations department is at your disposal. Send us the questions. Fabio, any final remark? No? I would just like to thank you, everyone, for your attention, for participating, and we are available if you have any questions. I'd like to reiterate our support to the local communities in Rio Grande do Sul, and we are also available to anyone and everyone that would somehow look to help. On our side, in operations, in generating value, we are very confident that we are going into a very positive cycle, as we have mentioned for a while, even with these one-off events that could happen and did happen in this case. Even in that case, we are confident in the evolution of profitability, generating value with specific pressure on sales at this time, but still, even with growth. After we get through this, we will have growth, profitability, gains in efficiency, so we're working, and we trust that we will have a very positive scenario moving forward. Thank you, everyone, and we are available if you need it. Thank you. Thank you.