Good day, ladies and gentlemen. Thank you for waiting. Welcome to Magalu's conference call regarding its quarterly results. For those of you who need simultaneous translation, please click on the interpretation button, the globe icon at the bottom of your screen, and choose your preferred language: English or Portuguese. We inform that this event is being recorded and will be available on the company's IR website at ri.magazineluiza.com.br, where you can also find the earnings release and the presentation in both Portuguese and English. The link to the presentation in English is also available in the chat. During the presentation, all participants will be in listen-only mode. Later, we will hold a Q&A session. To ask questions, click on the Q&A icon at the bottom of your screen and type your name, company, and the language you speak. When you're announced, a prompt to activate your microphone will appear on the screen, and then you must enable your microphone to proceed with your question. Questions received in writing will be answered later by the investor relations team. Now, I would like to turn the floor over to Mr. Fred Trajano, CEO of Magalu. Please, Mr. Trajano, the floor is yours. [Foreign language] Good morning. Thank you for participating in our earnings call referring to second quarter 2023. I am here again with the whole executive management of Magalu, and we're all going to be here, available to answer your questions at the end of the presentation. I recommend that you all follow the presentation that you can download from our IR website. Without further ado, I believe that in the second quarter, we once again presented consistent growth. [Foreign language] We grew our three channels, all the channels of the company, actually, with significant market share gain. I will speak a little about the industry dynamic, particularly the online market, on the next slide. Our online grew 7%, while the market dropped 15%, so 22 percentage points above the online market. [Foreign language] Even more than we had recorded previously. Offline growth, we grew 3% compared to a drop of 2%. [Foreign language] I will say later on that I see a recovery of the offline market. Still, we are 5 percentage points above. For the online, we use the Neotrust, and for offline, we use data from GfK. I did an analysis. I asked the team to do an analysis correlating the data so that we could understand the dynamic of the recent years, pre, during, and post-pandemic, relate, correlating long-tailing durable categories with the Selic interest rate, using Neotrust data and correlating with Selic data. It is important to say that the second quarter of this year represents the last quarter before the start of reduction in interest rates, which opens a much more positive outlook, especially for our operations, given that despite all efforts for the diversification of Magazine Luiza, we still have 64 years in the durable good category. We are leaders in these categories, and they are representative for our GMV. [Foreign language] Looking at this slide, we can conclude that the correlation, even in the online market, correlation of growth and performance of durable good categories in the whole market. I'm not talking about Magalu. I'm talking about Neotrust data here. With the evolution of the Selic interest rate, is a very high correlation, much higher than a almost nonexistent correlation with long-tail categories, which are important for us, but that do not compose a good part of our revenue. We see 60% correlation with durable goods and practically zero with long-tail categories. We see that the high growth we had during the two quarters of the pandemic and the reduction of this category, even online, in the online marketing, the post-pandemic scenario. When we analyze all of these factors, I believe that we need to see a growth trend, considering a four-year CAGR. If we will look at the last four years, next slide. Magalu We can see that Magalu was one of the companies in this segment that grew the most, 27% per annum in total. On the next slide, we can see that we grew 4% per annum of physical stores. Before the pandemic, the brick-and-mortar stores had an 8% share in the Brazilian market. Post-pandemic, that share increased to 20%. Magalu was able to maintain an absolute volume that was higher than pre-pandemic, so it increased from 3.4% in Q2 2019 to 4 now. In brick-and-mortar stores, physical stores, this growth is significantly higher as of July. Again, physical stores also have a high correlation because they are 100% durable goods correlated with the Selic rate. From July onward, we have a positive outlook. Just to talk about the coming quarters, we expect those to grow as the Selic rate declines. This has an impact on the categories we carry in our physical stores, so we have an expectation of improved volumes. We still gain 1 point market share. In online, we see an even more pronounced dynamic. In the first 2 years of the pandemic, the second quarter 2020, we grew a lot, 180%, 182%, and in the second quarter of 2020, 46%, in 4 years, 47 per annum. Even in the last few years, we have been able to grow our revenue, even with the reduction that are presented in the Neotrust data in durable goods categories. These categories in the last 2 years dropped a lot, which led the Neotrust data overall to drop. This growth of 2% in the second quarter last year and 7% in the second quarter this year, they represent a significant market share gain for our operations. The big growth driver, and this is what I'm going to concentrate our call on, is 3P. 3P has been the biggest growth driver. For a few years now, we have been saying that our focus at the company is on growing 3P channel. Here, we have a much wider range of categories. In those 4 years, 3P grew 64% per annum. We were the players that grew the most in 3P in the market, and we continue with a solid growth, even with a decline in the online market, as mentioned earlier. We have been walking the talk in terms of our strategy, improving that. In 3P, we are growing by increasing monetization of 3P, 3P, increasing take rate, re- improving our shipping, et cetera. We are doing that simultaneously to total GMV growth, which comes to show that this category has been growing, and during the financial part of the presentation, we'll see that this accounts for an important part of our margins. I think that this is a highlight to be mentioned, and it is one which is fundamental because we're growing even in a moment of difficulty, after the difficult part. Starting in Q1 of this year, 3P accounts for almost 30% of our total sales. For the first time in the past quarter, it exceeded, it surpassed the physical stores that, that have existed for 64 years, and it is accounts for almost 40% of the total online sales of the company. The trend is that this share will continue to grow. We continue to grow well in our physical stores. This market share gain is not in detriment of physical store sales. It's no cannibalization, but this channel has the potential to grow, and it has been the focus of our investments and efforts. Next slide. Another benefit and advantage of our 3P model is that it helps us in two important indicators for our business. New customers, 60% of the new customers were originated by 3P in this quarter. I think that this data point shows that 3P has a strategic importance for the company to help us increase our already very relevant customer base, and 70% of the total base of active customers have bought products on the 3P channel in the last 12 months. This is a very important channel for us in terms of activation and increase in shopping frequency. We achieved a historical mark this quarter, 300,000 sellers, growing in all types, large, mid-size, and even small sellers. Of these 200,000 sellers were small or mid-size sellers with strategy during the pandemic to use the Parceiro Magalu program. These are physical stores that had never sold online before. This is the vocation of the Parceiro Magalu program. We continue to grow this space with a great contribution of the brick-and-mortar stores. Physical stores do play a role in our ecosystem, and we'll detail that during this presentation. A good part of the efforts to attract new sellers happens through the hunting teams in the physical stores, helping us achieve this historical mark, 300,000 sellers. Regarding our, the online market, we are leaders in products that cost more than 1,000 BRL. We come from this category. We've been operating 1P in this category for 23 years. Of course, we grew very quickly initially in 3P in these categories, the more expensive ones. Here, we have a share which is disproportionately high. We defined the strategy because we have to pick our battles where we have competitive edge to win and where we would be able to replicate this share in categories and families between 200 and 1,000 BRL. Again, Magalu, for some quarters, you can see our presentation in recent quarters, has been focusing on families in this category. We identified more than 200 families with this profile. It's the whole process, from marketing all the way to promotions, team hunting, and payment logistics, to compose a strategy to gain market share. In these categories, we are obviously a company that does a lot of curatorship to onboard sellers. Because when customers buy products that cost more than BRL 200, they want to feel safe. They want to be sure that the product is true, certified, or approved, not a counterfeit product. These categories are traditional for Magalu. We brought this from 1P to 3P when we started our 3P model, and now we are applying this as a competitive differential so that we can indeed replicate the share above 1,000 BRL to the category of BRL 200-1,000. Why did we choose this? We have the competitive edge. More than that, when we look at the profit pool of these categories, about 85% of the profit pool of the market are in categories with a higher average ticket. Very low average tickets contributed with a lower margin because the shipping rate over GMV is lower, because the cost is higher, because the cost of marketing is higher, GMV is higher. We have a unit economics, which is a lot worse. Although, yes, there is an important share of total GMV in e-commerce coming from products under BRL 200, but the profit pool of these products is very little. As a result, this is now the focus. It indirectly, It indirectly, this strategy of ours kinds of helps us and shields vis-à-vis regulatory changes which took place in the cross-border market. These are significant changes, they bring some risk to retail, but particularly bring a risk to electronic retail, lower tickets, particularly when we don't have to pay federal taxes up to $5 items. It's a recent measure. In Brazil, being... Well, Well, foreigner has changed. I hope it becomes a competitive advantage. I don't think it makes a lot of sense, this reality. Looking at radically, because by the way, this topic was very controversial, many questions from analysts in recent months. We had a thorough analysis, whenever you have this kind of change, it's important to quantify your risk, precisely giving numbers and figures in order to make it clear what is the potential impact. Because Magalu is focused on categories like the ones I described in the previous slide, we had a thorough, in-depth analysis by categories. Categories up to BRL 50, the kind of category, you know, brands or not. We identified that only 3% of our GMV is subject to the risk of this recent regulatory amendment. Cross-border as a whole, I see it as an opportunity. Naturally, we are adopting measures in order to also make available to our customers products from foreign sellers. More specifically, right now, I'm showing you the impact of the regulatory change of tickets up to BRL 50 with no federal taxes. I guess this is where we have the greater risk and the most severe problem when it comes to competition. Because our ticket is higher, not only Magalu, but also KaBuM! and Netshoes also have high tickets. The same goes for Época Cosméticos, always tickets above BRL 100, and now we only have 3% risk in our GMV. We check risk families in the Brazilian market, we could see for pants and clothing, many fashion segments, unbranded. Naturally, we've been focusing on families which are branded and higher tickets than this. Next slide, please. Still about 3P, we have a positive outlook and a very significant performance in our logistics. Today, 80% of 3P orders go through Magalu Entregas, Magalu Delivery. We evolved a lot up to two-day delivery from 40% year-over-year to 50% this year. The take rate, which was already high, to 83%-85%. Remember, we have huge capillarity in our distribution centers, and that this increase has also helped us in conversion, and also helping us to keep on growing in 3P in a very fast manner. On the next slide, I highlight our fulfillment. It took us a while to launch our fulfillment, and this is because we wanted to have absolutely integrated to our 1P and physical store operation. When we launched 1P in the past, we launched logistics integrated to physical stores, and that brought us a lot of competitive edge in 1P, becoming a leader in 1P in Brazil. We used the network of physical stores to deliver 1P with better conditions, and we wanted to replicate this successful model to 3P, and that's how we developed this. The whole fulfillment of sellers that store Magalu's products, they store at the same distribution centers for our own products, and they use the same networks. Today we have 7 DCs, 1,900 sellers in our fulfillment, and today we hit the mark of less than 1 year of 10% of total 3P orders. go through our fulfillments. Sellers whose products, the turnover of the inventory is great, 30 days, and we sell more. This inventory turnover is even better today than 1P. We're doing great, and we're opening some costs, a reduction of 25% of delivery costs for those who are in fulfillment, and an increase of 25% in conversion. [Foreign language] [crosstalk] [Foreign language] [crosstalk] Good morning, everyone. Thank you for joining us in this earnings conference call. Let's move to the next slide to speak a little about the financial highlights. We spoke about sales increase across all channels. We spoke a lot about sales, total sales of almost BRL 15 billion. Oh, okay, just waiting for the slide to change. Okay. I think that the highlight on the slide was the gross margin. 28.8% gross margin. This is the highest gross margin or gross margin in the last 3 years, growing 0.2% over last year and growing a lot, quarter-over-quarter, 1.5 point. The performance of the gross margin for us was significant in still a very challenging environment, with the market shrinking and still very high interest rates in Q2. With this expansion and all of our initiatives, we improved EBITDA margin from Q1 to Q2, 4.9% to 5.1%. We were able to improve our operating results, we were able to reduce the negative net result this quarter over the previous quarter, particularly given a strong reduction in financial expenses, I will be speaking more about that momentarily. Just one observation, this result is adjusted for non-recurring expenses of about BRL 155 million. These expenses, well, most of them, are related to the integration process of Magalu Pagamentos, related to Hub Fintech, as mentioned by Fred. Also, another relevant point is that we have started the consolidation process of all the logistics companies that we acquired. You will remember GFL, SincLog, and others, and we have Magalog, which is our delivery platform. Very soon, all of them will be under one single corporate taxpayer number, serving all of the companies in the ecosystem, just like we have just a single 1P serving our whole ecosystem. Oops, there is some problem here with the slide. We are back. Okay. Before moving to the slide, in addition to these expenses related to consolidation and integration, we also had expenses related to adjustments of capacity. We closed two distribution centers and some cross-docking units in our logistics business. Moving to the next slide, we'll speak a little about the evolution of EBITDA margin compared to last year. The main explanation, the main variation here, still lies in the margin on goods that reduced 1.7 percentage point year-over-year. Here in the middle of the slide, I kind of had an additional breakdown to explain the evolution of the gross margin on merchandise or on goods. It dropped from 23.1% to 21.4% this quarter. As you can see, this margin in this quarter is already evolving 1.2 over Q1 2023 margin. In Q1, the margin had dropped 2.4. Now, it dropped just 1.7. When we look at this 21.4%, it is 1 percentage point only below our 2022 average, which was about 22.4. Which means that of the total impact of the fall of about 3 percentage points, since the beginning of the year, given the increase in the tax burden, now with 21.4% total gross margin, we practically passed through 2 points of the total impact of 3 points. We just need 1 percentage point for us to pass through in the gross margin on merchandise, and we believe that by year-end, everything will be behind us. The default impact, it's like we always say, "It's temporary, it's short term," and we are passing it along. The best news on this slide is the impact of the service margins. This quarter, it offset the impact of default, was even greater, and here the trend is that we're going to have accelerated growth in the long run. This is why we are very positive regarding the dynamic of gross margin that we should observe for the coming quarters and years. To speak about selling expenses and administrative expenses, well, they varied very little, both nominally and compared to net revenue. If we look at total sales, including the marketplace, we even had a dilution of expenses. The marketplace has or pulls selling expenses related to marketing and logistics. It has some impact, I'd like to remind you, it is our most profitable channel, and this is more than offset in the margin on services. The trend here is that our expenses will continue to be very much under control, and we'll look for operating leverage as the traditional channels grow more and allow us to have a greater dilution of operating expenses as well. Lastly, speaking a little about LuizaCred and allowance for doubtful debts, we'll show you the recent cohorts have had a very positive performance. Very soon, both LuizaCred should start contributing positively to our results, as well as our provisions related to CDC should be diluted. We also have very positive expectations regarding the performance of these two line items looking forward. On the next slide, well, this one on working capital, I would like to highlight that, again, we evolved a lot with our adjusted working capital. This quarter, one more time, we reduced our inventories. We improved inventory turnover by almost five days compared to last year. We improved the average term of purchases in another five days compared to last year. We generated a lot of cash from our working capital. We reduced the volume of confirming operations, which are part of the financing of our suppliers. R$3.8 billion, down to R$2.8 billion this year. It's a very positive trend in working capital. This was also reflected in a reduction in financial expenses. This quarter, we spent R$100 million less over Q1 2023. In Q1, we mentioned this, that this was seasonal, that there were a lot of prepayment to suppliers. Last year, financial expenses increased over the year, given the increase in CDI, but this year, we should have the opposite dynamic: a reduction in financial expenses and a dilution of these expenses along the coming quarters, together with a reduction in CDI. Not only a reduction in CDI, but working capital. Pix has been a highlight, growing 15 percentage point in our e-commerce. We have reduced the cost of prepayment of receivables, and we have a cash position which is more sound, more robust. This quarter, we increased our cash position by BRL 1 billion, a very strong performance, given the cash flow of operations of about BRL 800 million. It's more than paid for our CapEx and interest and leasing expenses. We also had the renewal of operating agreement with Cardif. We still have Luizas eg receipt, pending approval by SUSEP. Hopefully, this will happen soon. With that, we got to BRL 8.1 billion in cash, including receivables. On the next slide, we see that with this cash position, we resume a net cash position of around BRL 1.9 billion of net cash position. From the capital structure and leverage standpoint, we have a very net and very liquid position with a very competitive capital cost. Our average capital cost is about CDI, plus 1.25% per annum. Our gross debt relatively distributed along the next 3 years, and a total cash over net debt of practically 3 times. Moving forward, LuizaCred. Here we continue with a base of practically 7 million cards, TPV growth getting to BRL 14 billion and BRL 20 billion in the loan portfolio. In recent months, we have seen a pick-up in the issuance of new cards, at the same time that we have seen a significant reduction in the previous indicators of delinquency, NPL. Here, on this slide, we bring you managerial indicators for CDC and LuizaCred. We see a trend of improvement, a reduction trend in delinquency, which is quite pronounced. We can see NPL under 15 days improving. We are very confident in terms of resuming profitability and credit granting levels in the coming quarters. Well, lastly, in addition to everything that we're doing to increase o ur gross margin, EBITDA margin, and all of our operating results, and also in the attempt to reduce financial expenses, regardless of the macroeconomic scenario, we bring you here sensitivity analysis. [Foreign language] [crosstalk] Just to give you an idea of the potential impact of a Selic rate reduction on our financial expenses. Our expenses are practically all linked to CDI, all pegged to CDI. In the last five years until the pandemic, between 2017 and 2020, interest rates- [Foreign language] ... were dropping consistently. In this period, our financial expenses oscillated on average 2% to 2.5% of net revenue. [Foreign language] Last year, it was 5.5%. We believe that with the CDI going back to a normal level, our financial expenses tend to go back to historical levels. The sensitivity here is that every 1 point reduction in interest rates is equivalent to approximately BRL 150 million savings in financial expenses, not to mention sales increase and the positive impact on the cost of funding of LuizaCred, reduction in NPL delinquency, and in the capacity to grant a lot more credit to our customers. Very well then. With this, we are going to end the presentation, and now I would like to invite you- [Foreign language] ... for the Q&A session. Thank you very much. We will now begin the question and answer session. To ask a question, click on the Q&A icon on the bottom of your screen. Type your name, company, and the language you speak so you can get in line. When announced, a prompt to activate your microphone will appear on the screen, then you must enable your microphone to proceed with your question. [Foreign language] As a reminder, if you have more than one questions... [Foreign language] ... please ask all your questions at once. [Foreign language] First question, Vinícius Strano with UBS. [Foreign language] Vinícius, please go ahead. [Foreign language] Hello, good morning, everyone. Thank you for taking my question. [Foreign language] Some of them have a slightly higher than average online penetration. Second question about default. Which stage of the pass-through do you consider to be today? Maybe what about the impact on gross margin down the road? Last thing, you mentioned changes to Fintech Magalu. What about the new products you intend to launch? Any funding alternatives about the Fintech? Thank you. [Foreign language] Thank you for the question. [Foreign language] Three of our managers will answer: Edu, Fabrício, Mauad. [Foreign language] Good morning, Vinícius. Thank you for your question. [Foreign language] Overall speaking, these families of products- [Foreign language] Between BRL 100-BRL 1,000 account for 45%-50% of the current online market. [Foreign language] Potential growth in penetration. [Foreign language] When we look at these families, we base on our share. [Foreign language]. A slightly lower share, lower than 7%. [Foreign language] when we compare it with a share- [Foreign language] some of them even 40%. ... that we have in our traditional families over 25 or 30, some of them even 40%. That's how we calculate our potential growth. [Foreign language] This is the rationale behind these growth families. [Foreign language] Just giving more color. Fred speaking. [Foreign language] Today, they are around 80% of the estimated market GMV above BRL 200. [Foreign language] All of them. [Foreign language] Are very significant. [Foreign language]. So they tend- I[Foreign language] They have- [Foreign language] They are very important. They will be very important in the future. [Foreign language] Good morning. Thank you for the question. Fabrício speaking. [Foreign language] Like Beto said in the presentation. [Foreign language] We managed to have a pass-through of 60%-70% of default to date. [Foreign language] Like we said in the previous call, we had exceeded 1/3 in the 1st quarter, now we passed through another 1/3, so 2/3 total default. [Foreign language] We keep on passing through. We expect that by year-end, we manage to pass through 90% of default. 97% de default. 95%. We're very confident owing to the competitive market. [Foreign language] About Fintech? [Foreign language] Vinícius, thank you for the question. [Foreign language] Fintech's agenda is pretty much concentrated. [Foreign language] on profitability and growth. [Foreign language] we worked for a lot of time- [Foreign language] - Building up the very competitive good profile. [Foreign language] portfolio, both for our sellers and end users. [Foreign language] Now we are building scale. [Foreign language] Making these products more profitable. 2 grandes stakeholders que a gente tem aqui na nossa- Now that we have these great two stakeholders. [Foreign language] in our value chain. [Foreign language] ue- At the end of the day. [Foreign language] Everything related, particularly to digital accounts. [Foreign language] We have a lot of things to become mature. [Foreign language] Products to our sellers also need to evolve very significantly. [Foreign language] Payments with token in Magalu. [Foreign language] we need also to speed up the conversion- [Foreign language] ... in our digital sales. [Foreign language] Our agenda is very intense if we think about all the work that we've been doing over the last three years. [Foreign language] We can effectively build scale and monetization on top of these assets. [Foreign language] As for the outlook for funding. [Foreign language] Perfect, thank you. [Foreign language] Thank you, Vinícius. [Foreign language] The next question comes from Irma Sgarz, Goldman Sachs. Please, Irma. [Foreign language] Hello, good morning. [Foreign language] pergunta. Thank you for taking my question. [Foreign language] It's very cool. [Foreign language] We have a very positive trend. mas a gente. We have a very positive trend. [Foreign language] [Foreign language] Anything to add, Fabrício? [Foreign language] Good morning, Irma. Thank you for the question. Fabrício speaking. Like Fred said, the competitive environment is more rational, which is to our favor. When you do the pass through, price goes up, and it takes some time to be stable and have the price perception by consumers. This is pretty much stable, particularly online. You can see the online market goes down. We grow a little, a lot of share. [Foreign language] We had a good Father's Day this year. An important thing that brings us more confident to the macro scenario, is that we have a good schedule until the end of the year. Our inventory quality is very good. We don't need any adjustment, which is very beneficial to us, and we're doing fine with our suppliers. Magalu is one of the few alternatives for suppliers today. We've been managing to do good business, and we're very confident for the end of the year. [Foreign language] Great. Thank you. The take rates, Edu? As for the take rate, Edu? Good morning. When it comes to take rate, the bulk of this increase in revenue that also include the base in our commissions, be it in shipment and take rate in general, and also an increase in additional revenues. The bulk in the first half of the year comes from this increase in commissions. Overall speaking, considering our position in the market, we understand we have competitive rates of sellers. Our growth in our seller base, at the same time, we post growth in our revenues. [Foreign language] Okay, thank you. [Foreign language]. Thank you, Irma. [Foreign language] Please go ahead, Maria. Maria Clara [Foreign language] Maria Clara, you may begin. [Foreign language] Hello, can you hear me now? [Foreign language] Yes, please go ahead. [Foreign language] Thank you for taking my question. I'd like you to elaborate on the dynamic for profitability looking forward. If you could comment on the expectation for margin improvement along the year. I'd also like to hear from you whether you believe that after these adjustments of restructuring in this quarter, do you think the company has the ideal structure to have to enjoy more gains related to operating leverage in the coming quarters? Thank you. [Foreign language] Good morning, Maria Clara. Thank you for the question. I will try to answer. You know, we don't provide formal guidance, so we have to align expectations qualitatively. With that slide that I showed on the EBITDA margin, I think that we spoke a little about the main initiatives taken by the company to resume our operating margins, to bring them back to historical levels. You will remember that we had some EBITDA margins before the pandemic, between 8%-9%. Today, we are at 5%-6%. EBITDA margin of the marketplace is way higher than the average. It is in the high two-digit range. We have been seeing this. It is our most profitable channel, the channel that grows the most, and that has been increasing in profitability. A channel that also has the potential to continue to grow in an accelerated fashion without working capital investment, with low fixed costs, and not requiring fixed investments. It is a channel that has the potential to be a game changer in the gross margin. For example, we're investing a lot. I think that the whole presentation was very much focused on growing the marketplace. In addition to the marketplace, we have been improving the margin on goods, on, on merchandise. We also spoke about this. We expect a second half that will be stronger in terms of sales, with better product margins, and a combination of these two things tends to favor and to drive the gross margin and the EBITDA margin, especially the gross margin. In terms of the gross margin, we, we intend to continue to work efficiently on our operating expenses, optimizing marketing and logistics expenses, and more and more, with an expectation of having a lower delinquency level at LuizaCred, CDC, and so on and so forth. All of these factors tend to contribute to a positive and growing EBITDA margin. No need for intervals, but with a very positive trend. Second half, sales seasonality is historically better. Historically, the margin evolves in the second half of the year, and with all of these initiatives and investments that we have been making. Now, with a macroeconomic scenario that is a little better, we are very excited regarding the evolution of these indicators, both for the second half of the year and in the coming months. We are very confident regarding a consistent improvement and evolution in the coming years. [Foreign language] Perfect. Thank you very much. [Foreign language] Thank you. Thank you, Maria Clara. Next question from Pedro Pinto with Bradesco. Please go ahead. Thank you for taking my question. I have two, two questions. Fabrício spoke a little about a balanced and good quality inventory, so I'd like to ask a question regarding Black Friday expectations of this year. How are you preparing for this event from the standpoint of inventory? I want to understand how we intend to bet on physical channels and 1P channel for this year. That's number one. Second question has to do with working capital. In the beginning of the year, we had a stressful situation regarding funding. We saw the suppliers line reducing in Q1, and now it's resuming.... Thank you, too. Do you think that the appetite for funding is normalized, or should we see these suppliers going back to the level that we had last year? [Foreign language] Thank you for the question. This is Fabrício speaking. Regarding Black Friday like I said, we have a good quality inventory. Preparations for Black Friday are starting now. We are negotiating with suppliers this month and next month. We are confident on having a great Black Friday. Last year, it was our very best Black Friday. We expect this year to be even better, both in the online channel and in the brick-and-mortar stores, so we are going to be ready. Our inventory should increase a little in Q3. We're already preparing for end-of-year activities. There's also heat coming. If we have the heat that we're expecting, well, that changes our sales in terms of white line goods, so we are prepared with our suppliers to face that moment. [Foreign language] Pedro, thank you for the question. I'm going to comment on suppliers. We're. We reported a reduction in Q1. It's very seasonal, indeed, in Q1... Uh, the- The market was still kind of turbulent in terms of costs. costs of this line item. Uh, so the- It became a little more expensive in Q1, given everything that happened in the market. The main key, turbulence- We mentioned back then that this was turbulence, that things were going to normalize, and that the market would settle again, and this has been happening since then. Interest rates for these line bodies are short term. Relatively cheap. Short-term facilities, relatively cheap. In Q1, they increased, but then they started accommodating, settling, and they are in a trend of reduction, of normalization, almost at the same level as last year. With that, with more competitive rates normalizing. The suppliers. The demand on the part of suppliers will normalize as well. No guidance in relation- We don't have any guidance regarding the level of this, because it will really depend on the need of each of our suppliers. If they want to have prepayment or not, it's their decision. We offer them this facility. It's in a win-win relationship that will work for everybody. As interest rates decline, there might be a slight recovery. There was some recovery from March to June, but there should not be any significant change in the short term in terms of demand. Pedro, we had an improvement in inventory turnover in the average term of purchases as a whole. That had an impact. [Foreign language] Yes, very clear. Great. [Foreign language] Thank you, Pedro. [Foreign language] Thank you, Pedro. [Foreign language] Next question, Felipe Reboredo with Citibank. Please go ahead, Felipe. [Foreign language] Good morning, Beto. Good morning, Fabrício. Thank you for the Fabrício. Thank you for the opportunity to ask my question. We are in Citi, and we want to better understand the evolution in 3P. We showed 1P was a little bit more shielded and had the focus on a higher ticket products. How does it communicate with a core 1P and Magalu? Does it compete with the core products, particularly items greater than BRL 1,000? Another point is about monetization of 3P, so to speak, of a higher ticket 3P. Is it easier to monetize this kind of seller, particularly in take rate negotiations or fulfillment? That's about it. Thank you. [Foreign language] Thank you very much for the question. I'll begin by answering. Well, we did some strategic planning for the next 3 years, and we pinpointed 200 families of products which are absolutely complementary to the ones we currently work with, traditional families. We provide codes to the size of these families, their relevance for Brazilian e-commerce. Eduardo already gave us some color about the size. On top of that, we are working. The growth of these families, these are families with low share, and we want to replicate the share of traditional families. We're speaking of tickets above BRL 200, not only above BRL 1,000, BRL 200-BRL 1,000. That's the great opportunity to expand and replicate share above BRL 1,000. That's what I mentioned in my slides. These actions act to These actions act to one another. About 1P, categories were very rational. [Foreign language] ... in January, some adjustments were made to the table, which reflected in the result of the second quarter. Now we have an impact in the second half of the year. Now some new adjustments in our orders and some reductions for Parceiro Magalu platform to make sure we have good monetization for the second half of the year. Like Fred said, it was hedge, and now we have collection announced to the market, and we're trying to model collections from when the common customer we also work with Labs. Fatala worked a lot, talked a lot about the ads platform. We work now that we expand inventories to other platforms, and it will be a strong driving force for profitability, no doubt about it. As for cross-border, if you think about the upside, we see it as an opportunity trying to explore it and support our strategy. Our strategy is higher ticket products, fast delivery times, so it's an additional opportunity based on what we already have. Crystal clear. Thank you for the answers. [Foreign language] Eric. Next question from Gustavo Senday with XP. [Foreign language] Hello, good morning. I have 2 quick questions, one regarding non-recurring expenses. We saw the quarter-over-quarter evolution of that amount, I'd like to understand from you, what do you expect looking forward? Should this amount normalize with the integration of Hub Fintech? A follow-up question on take rates. It caught our attention in the pass along of take rates this quarter. I'd like to understand from you, any specific category that is room for increase, and in what categories have you made adjustments in the last quarters? Thank you. [Foreign language] Good morning, Gustavo. Thank you for the question. I'll speak about non-recurring expenses. Let me just elaborate a little. Most of these, BRL 155 million, most of that were concentrated on the 2 integration processes. One that has been completed and uneventfully, the integration of a payment institution. You know how complex that can be. It took months, it involved a lot of people from many departments in this integration of Magalu Pagamentos with Hub Fintech. The other one that was, so to speak, a little more costly so far, it is related to the integration process of the logistics companies that I mentioned. You can observe we have a subsidiary called Magalog, that posted a relevant negative result this quarter, and this is already the result of this integration process, which is going to transform all of them into one single platform that is a lot more streamlined, efficient, scalable, and providing services to all of the companies in our ecosystem with a number of benefits. These are almost investments that were made. Of course, we post them as non-recurring expenses, but actually, both they are not going to happen again. The integration processes, like I said, 1 is already complete, the other 1 will be completed soon. A smaller part of all non-recurring expenses is related to what we call capacity adjustment expenses. We reviewed, we revisited our DCs. We closed 1 between March and April in the south. We closed another 1 between June and July in the northeast. We closed down some cross-docking units where there was some overlapping, in mind with no impact whatsoever on our efficiency ratio. We're delivering actually faster and faster. We also made a capacity adjustment in our corporate team. If you put all of these adjustments together, we get to this amount. Last year, we also had non-recurring adjustments in the 1st half, and then in the 2nd half we didn't have anything, so we have no guidance in that regard. In the past, we also had some non-recurring revenues, so... and we excluded those, so we exclude non-recurring expenses. If there is any type of non-recurring expense, we'll always adjust for that, exclude that, so that we, we can present the results in the, in the right way, in the most transparent way for our investors. These expenses are not recurring. They are non-recurring. They belong to the past, and for the coming quarters, we expect to continue to evolve and to, to improve our operating results, to execute on our strategy, and so on and so forth, as mentioned earlier. Regarding take rate, I'll turn the floor to Eduardo. We don't have a table per, per category. We have a table of commissions, which is partly variable and partly fixed. Lower ticket categories have a higher commission. We had made some adjustments in January, now in July we made some other adjustments to increase this fixed amount from BRL 3-4. This is going to be repeated in the second half. In the Parceiro Magalu program, we also made some adjustments in the take rates, in the commissions. As mentioned before, we have the evolution of ads. We'll see how monetization will evolve in the future. Perfect. Thank you very much. Thank you, Gustavo. Our last question comes from Joseph Giordano with J.P. Morgan. Mr. Giordano, go ahead. Good morning. I have one last question. Going back to working capital, we could see a significant improvement, which accounted for the gross part of the cash generation of the company. I'd like to hear from you, what would be the next drivers to improve working capital, or is this kind of normalized? My second question has to do with restructuring. Last year there were some store restructuring, and this year some internal restructuring. Do you see any opportunities to revisit your pool of stores, considering a great focus on digital ads? Because that's an easier venue to get monetized. Hello, Joseph. I'll start speaking about working capital. Well, we continue to reduce our inventories marginally. A good part of the reduction took place last year and beginning of this year. If we compare with the peak of inventory in the end of 2021, inventories were reduced by BRL 1.5 billion or more in the total value of inventories. As Fabrício mentioned, our stockout level is at a very healthy level. We have a sound inventory level versus a surplus inventory. Naturally, we'll always try to improve inventory turnover. This continues to be one of our obsessions at the company. We see more room in increasing sales than in reducing inventories. Of course, we can have some efficiency gain. We had a number of internal initiatives to always pursue to operate in the most efficient, in the best way possible, possibly continuing to nominally reduce inventories. This should not happen in the short term. As Fabrício mentioned, we have the second half. We have Black Friday and other events, Pretty soon we're going to be receiving products for those festivities in the end of the year, Then we'll reduce inventories again, as it normally is. In this inventory supplier relationship, we see more opportunities on the side of inventories rather than on the side of suppliers, because with suppliers we have already increased those, and we have an average term of purchases, which is quite healthy. In addition to this inventory over supplier ratio, we always try to optimize our working capital line items. We have an opportunity to increase the offsetting of taxes. In the last two years, well, we accumulated some taxes. In this year we are kind of flat, stable, and slightly offsetting some taxes, and we have a working plan to accelerate monetization of these taxes, naturally, organically, via expanding the margin and via sales increase, and so on and so forth. We have a strong focus on these lines and an opportunity to improve a lot by year-end and generating a lot of cash as it relates to our working capital. Now I'll turn to Fred to speak about the stores. Morning, Joseph. Thank you for the question. Regarding the physical stores, we have made some adjustments in the last two years. The bulk were Marisa kiosks, in terms of volume. This is a dynamic process. We are always evaluating issues related to rent. Most of our brick-and-mortar stores where we have opportunities to improve profitability are in new stores, in Rio, in new markets, and they're still in a maturation phase, and unfortunately, they were created in a bad phase of high interest rates. We had just opened the stores, and they were caught in a counter-cyclical moment of the market. It doesn't make sense to close these stores now that we expect interest rates to fall, just like in the past. In all economic cycles, declining interest rates is something that is helpful. I showed a high correlation with the category of durable goods online, but particularly offline, because credit is related to consumption at the physical stores. With lower interest rates, we started giving more credit, and we started selling more, and that's very important for our operating leverage. We believe that with this declining interest rate cycle, that should last many, many quarters looking forward, this will have a super positive impact, not only in the result, in the reduction of prepayment rates, but also in terms of store volume sold. I believe that this is going to be super important for these units. This is very dynamic. We're always looking into this. I'd like to highlight that to us, stores play a role in the ecosystem. They are not just a standalone sales channel. 45% of 1P sales go through the stores. 30% of 3P sales go through stores. A lot of the new sellers come in through the hunting teams at the stores. The stores do play a role in the Magalu ecosystem. We built an operation which has, in 3P, the same characteristics that was super important for us to be winners in 1P, and the stores play a significant role in that. Perfect. Thank you very much, Beto and Fred. We are now ending the Q&A session. I'd like to turn the floor to Fred Trajano for his final statements. Mr. Trajano, go ahead. I just want to thank everyone for joining our earnings call. Have a great day!