Hi. Good afternoon, everyone. Thank you for joining us for our Q2 2026 Earnings Conference Call. It was another quarter of progress. To share a bit more about our strategy and everything we've been doing, I'm joined by André Farber, our CEO, Miguel Cafruni, our CFO, and Francisco Santos, the head of Midway Financeira. Just like in previous calls, we'll start with a presentation, which will be followed by a Q&A session. As a reminder, to ask a question, simply click the raise hand icon to join the queue, or you can also submit your question in writing via the Q&A icon. Before I turn the floor over to André, I have a few remarks. This presentation is being recorded and has simultaneous interpretation. The presentation will be held in Portuguese, and the English version is available on our IR website. Any statements regarding projections or outlooks reflect our management's expectations, but they do not guarantee future results. That's it. I now turn the floor over to André. Thank you, Isa. Hi, everyone. Thank you for joining us for our Q2 earnings conference call. Once again, you'll see that we delivered very strong and robust results. I've celebrated three years with the company this quarter, a period of deep transformation in which we streamlined our businesses, increased our focus, and we have been delivering increasingly better results. You'll see today that the strategy remains very consistent. We are providing continuity with no change in course. However, as we continue to generate results, we grow more and more confident. Yet at the same time, we feel like we're just getting started and the best is yet to come. This is the slide showing our transformation journey since I joined the company. We are now entering a phase II of our transformation journey, a phase of profound evolution in our customer experience. In April this year, we renovated the Barigüi store, which now features a new format, the new brand identity, everything we envision for the Riachuelo of the future. We're now preparing for the second half of the year. Starting in August, we'll carry out seven renovations and open 14 stores with the new format. The Riachuelo we'll see going forward with over 20 stores in this new format is a new Riachuelo with a new format and a new experience. This quarter was also important because we evolved our org structure. The fashion executive board has now been split into two to provide more focus and seniority. We split the board into two. We created a men's board and also a women's and children's fashion board. Now let's see our results. Again, as I said earlier, a very robust and consistent quarter with very good results across all lines. We continued to sustain same-store sales growth in apparel of nearly 8%, and we achieved this while also delivering very significant margin growth. Our gross margin reached 59.2%, up 190 basis points year-over-year. This combination is always very powerful for improving our EBITDA result. Our retail EBITDA reached a historic level of 17%, the strongest retail result in Riachuelo's history for a Q2, and it achieved 15% growth in absolute terms year-over-year. We continued to evolve the operations of Midway Financeira with very consistent and solid results. Midway had yet another quarter of progress with its EBITDA growing 7% year-over-year. Combining both EBITDA streams, we have the company's consolidated EBITDA, which reached BRL 461 million, a growth of nearly 13%, and a consolidated EBITDA margin of 17%. A very significant step forward. This is an improvement of 140 basis points versus the same quarter last year, and we also aim to grow EBITDA and net income. Our conversion of EBITDA into net income has been very strong. While our EBITDA grew 13%, our net income grew 36%. Also historic record for the Q2 of the company, reaching BRL 168 million. Let me give you more details on some of these numbers. Apparel same-store sales, 12 consecutive quarters of growth. Looking at the last quarter, we grew almost 8%, as I said earlier. Looking at the historical numbers, when we look at the Q2 of 2025, the combination of 15.8 and 7.8 represents 25% growth over two years. Looking back to 2024, the growth of those three years is 35%. This is the result of all the work we have been doing, making our fashion better, our experience better, and our processes better. The results are here for you to see. We're very proud of this. We have been achieving margin growth, also hitting a record level of 59%. I believe Riachuelo has never reached this apparel margin level in the Q2 before. We're very proud. 190 basis points increase versus the Q2 last year, and we're making improvements like a Swiss watch. We improved 190 basis points in the Q2 of 2025, and we also had an improvement of 190 basis points in the Q2 of 2024. When we look over this three-year process, it's an apparel margin improvement of almost 6%. Actually, 5.7%. This makes us stronger. We can now invest more in the brand, in stores, in our business, making it stronger and creating a virtual cycle. A very powerful combination. Growth for 12 consecutive quarters, along with margin expansion over the three years, which has made our business increasingly stronger. Next slide. Let's go back to our strategy. As I said at the beginning, there's no sharp turn here. This might seem like a repetitive slide, but I want you to understand our vision, that we continue to pursue improvement within the pillars that have already been established. Our first strategic pillar is experience. Brand evolution, product evolution, store evolution, and customer journey evolution. A very important point is the evolution of our footprint. This includes store renovation and new store openings. As I said earlier, this new phase of our transformation journey includes new renovations and new store openings that will transform Riachuelo's experience and drive more revenue. Fashion efficiency, which is about optimizing our operations, integrating with the factory, better pricing, and more robust models, has brought us the margin expansions we've been seeing historically and will continue to bring margin improvements over the next quarters. Our fourth pillar is the continued evolution of Midway Financeira. Midway is launching new products and enhancing existing products, we are very happy about it. The fifth pillar is our capital structure. Over time, we have reduced our debt. We sold Midway Mall, and the success of our strategy is measured by our ambition, which is made up of these six indicators. Since our investor day in December last year, we've been showing you this slide. Yes, it's a bit repetitive, but it shows how consistent we are. Write it down. We'll continue to strive for this evolution and to reach better numbers. This will deliver much more value to Riachuelo over time. We're now entering this new phase, evolving customer experience. Yesterday was a special day for us. We opened our store with the renovation of the Barigui Mall store with the new format. In April this year, we had renovated the upper part of the store and the men's section, and now we have completed the second part of the renovation with the women's section. I'd like to turn the floor over to Miguel to tell you more about the numbers. But before he speaks, I'd like to show you a video of our new store. The new Riachuelo concept has gained a new chapter. With the opening of the women's floor, Curitiba has become the first store in Brazil with the full model. Fashion, architecture, technology, and service working together to create a new experience. The first of many in Riachuelo's new phase. Thank you, André. Hi, good afternoon, everyone. It's a pleasure to be here with you. I'd like to start by talking to you about our retail performance, and I'd like to provide more clarity and transparency on where this consistent gain is coming from. This quarter, we delivered a historic margin of over 59%. Half of this expansion, almost two percentage points, continues coming from operating our model better, seeking efficiency, capturing efficiencies in the supply chain and in our factory. We have these other two verticals, strong initiatives we are undertaking in product, focusing on core products, which is performing better. Our winter collection also performed really well, and it added about half a percentage point of margin to our business and another 0.4 percentage points of margin comes from better execution of our pricing strategy, improved supply chain management, and our markdown levels. Retail EBITDA, we reached a historic level with over BRL 340 million in EBITDA for the quarter. If we go back a few quarters, we see a very consistent sequential evolution with an EBITDA margin of 17%, almost two percentage points of EBITDA margin expansion in the quarter. The quarter grew 15%, so we remain very strong in our core retail segment, largely driven by what we mentioned, top line consistency, gross margin expansion, good expense control, and a good response of our EBITDA. Let's move on to our financial services, starting with the credit portfolio. In the quarter, we reached BRL 6.2 billion in the portfolio, and we continue to perform very efficiently. This percentage shows how much revenue we extract from the portfolio, and we remain at a very solid level. The strongest growth comes from products we've been investing in and accelerating portfolio growth with better ROI. Basically, the loan book reached BRL 1.1 billion, surpassing the one billion mark this quarter. Let's talk about our delinquency rates. I'll talk about FPD later, but delinquency for cards and loans remains very controlled. We are very diligent and responsible in our portfolio management. We are increasingly refining our models, increasing the team's seniority, and strengthening our Midway teams. We are also operating at historical levels. Looking at short-term card delinquency, the two gray lines in the loan book, which is the portfolio that is growing, as well as long-term loans and cards, they are all within a normal seasonal pattern. Comparing periods, we also see very controlled and responsible levels. In our opinion, the next slide is what reinforces this point the most, which refers to FPD. We remain very responsible, diligent in operating the way we do within our financial terms. We always bring you the behavior of our new FPD index. This strongly reflects the quality and maturity of our credit models. For cards, over the quarters, we can see an all-time best historical performance in this indicator of FPD at 13.5%. When we look at the track record, again, we see a very good and consistent behavior in this indicator. Similarly, the loan portfolio is growing, but within our risk appetite and our refined credit models also showing consistent behavior. Let's look at our consolidated performance, looking at the group as a whole once again. Starting with the company's consolidated EBITDA, a very powerful number here, over BRL 460 million in EBITDA for the quarter, with growth in both segments, 15% in retail and 7.2% in financial services. A record of consolidated EBITDA margin of over 17%, an expansion of almost 1.5 percentage points in EBITDA margin. When we look back to the very beginning of the transformation, we see that our EBITDA was less than half of this figure. This is very strong growth, and we continue on this transformation journey, breaking records and delivering results very responsibly. We continue on this path. Let's look at our income statement. We're very proud of how our net income is ramping up. As André mentioned, we are increasingly working on initiatives to convert EBITDA into net income. This quarter, EBITDA grew close to 13%, while net income grew 36%, reaching almost BRL 170 million in the quarter. Looking at the track record over the last three years, it's a very strong and positive evolution. We can see our LTM net income for all Q2s of recent years. An important message here is that the LTM for the Q2 broke the BRL 500 million barrier with an LTM net income of BRL 530 million as of the Q2. This is a higher net income than for all last year. We're very proud of this. We are working at a new level of profitability and return, and we are very confident that we'll continue strong on this journey. Let's talk about cash flow. It was a quarter of cash generation, another quarter with significant operating cash generation for the company. We generated over BRL 130 million in operating cash flow. As we've been reinforcing with you since our investor day, we are emphasizing the resumption of investments that are important for the long-term health of the business. This quarter, we directed a large portion of the operating cash flows towards the new automation of our DC. We are confident that we are investing in areas that will provide us with an increasingly healthier and more consistent long-term business going forward. We can see that we remain stable and controlled with the leverage targets that we set for ourselves. When we adjust our leverage here for interest on shareholders' equity, which was paid in Q3 last year, we have leverage that is very well controlled and stable, about half a turn. Net debt has been consistent, impacted by the acceleration of investments we're making. At the debt level, we show a profitable income-generating company with controlled debt, which gives us the foundation to continue investing and reaping long-term benefits for our business. With that, I'll conclude. I will join André, Isa, and Fran for our Q&A session. Thank you, Miguel. Let's get started with our question and answer session. The first question is from Danny with XP. Hi, Danny. Please go ahead. Hi, Isa, Fran, André, and Miguel. Thank you for taking my questions. I have two questions here on my side. First of all, congratulations on your excellent results. The journey you're building is amazing. My first question is about the evolution of product mix. Not only talking about apparel, because you've been talking about the evolution of the value proposition in apparel, but also looking at the company as a whole. We see consolidated numbers with impacts of the reduction in some categories. What are you preparing for the future, and up until when will the assortment adjustment be impacting the numbers? Although the profitability offsets that, I just want to understand what you are envisioning here. My second question is about working capital. Can you tell us about how this is going to evolve going forward? You talked about inventory and being prepared for the winter, but what can we expect in terms of evolution in the coming quarters for working capital? Thank you. Would you like to talk about working capital, and then I'll talk about assortment? Sure. Thank you, Danny, for your question. Oh, I thought you were going to answer the question. Danny, thank you for your question about working capital. From the beginning of our transformation journey, we've been very diligent in seeking working capital efficiency. We track an important percentage, which is capital demand over revenue. This percentage has evolved 5-6 points, going from 19 to 13. In this quarter, if we exclude some effects, we can see apparel and merchandise generating capital and a demand for Midway products with very healthy ROI. We expect this level to continue. We are seeking efficiency and aiming for quality, doing things the right way. Our inventory has higher quality. Our mix is being very precise recently. We should keep the sequence of evolution. One quarter or another, this can be a bit more positive or more neutral, but that's what we expect going forward. Not as much as we did in recent years, because we have changed a lot, but we still see room to evolve here as well. About the category mix. When you look at our strategy, we've been talking about focus and discipline and being fashion-obsessed and product-obsessed. The first thing that we changed in categories was de-investing from the technology business. When the process started a year and a half ago, technology accounted for much more at the company, with low margins. This has decreased quite a lot. We also saw that the house products, the homeware at Riachuelo is not so good. The standalone stores are actually doing quite well, performing well. We'll continue to invest in the standalone houses. At Riachuelo, we decided that our focus should be on fashion. We adjusted the mix, giving more space to fashion products rather than homeware. Fashion has much better margins than homeware and technology. The combined retail margin grew 3.1%. That's how powerful this strategic change is. We are now focusing on the fashion category, which brings better margins, and our EBITDA grew. The process will continue for some time until we complete the whole transition. It will take another one to two years with some transition in technology and homeware to be done. We believe that the numbers will continue just like they are right now, improving the combined results of the company. Okay, that was very clear. Thank you for your answer, and congratulations on your results again. Thank you for the questions, Danny. Our next question is from Eric with Santander. Hi, Eric, please go ahead. Hi, everyone. Thank you for taking my questions, and congratulations on your results. In your earnings release, you mentioned the evolution of apparel gross margins, can you give us a breakdown about the levers that were more significant in this expansion? Can you help us connect that to the ambitions that you mentioned in your investor's day of expanding gross margins in apparel? This quarter, you had relevant expansions, does that change the potential you see within your ambitions? Considering the competitive landscape, you think that a part of this can be used to focus more on prices considering the level of expansion that you have been able to deliver? About Midway, what do you have in mind for other products, not focused on in-house sales, you had some consigned credit this quarter. Can you tell us about the growth opportunity for Midway as well? These are my two questions. Thank you. Hi, Eric. Thank you for your question. I will answer the first one about gross margins and the breakdown of the levers, then Fran can talk about Midway. About gross margins. Once again, we showed you a slide showing clearly where this margin expansion is coming from in these last 11 quarters. Half of the growth we had this quarter came from the evolution in our operational model, in the strengthening of our integrated supply chain with a make or buy project, making this a leaner business, a more agile business. You choose the product well to position it in stores and also with efficiency in our factories with a healthy share of what is selling well. We had another two important effects this quarter. First was the product mix. We prepared better this winter than last winter, the collection was very precise and well-priced and well-developed. The product team did really well, this was something that brought us margin growth. The FX rate that was more favorable this quarter. Our fashion is increasingly higher quality and connected to consumers. Of the 1.9, half came from these effects. The third effect is the advance in the use of intelligence and data in our pricing strategy. We have an in-season markdown strategy. We're being very smart and careful in these processes. We think that some of the levers are already closer to a score of six or eight in a scale of zero to 10, but we are confident that we'll continue expanding margins. Of course, in one quarter or another, the numbers may go a bit up or down, but we continue disciplined to extract the most of each lever. This discipline makes us look ahead into the future. We're not looking only at the here and now. We're strengthening our brand and our channels, and this has been giving us a sequential same-store evolution. We'll continue capturing the margin levers for some cycles to come. Hi, Eric. Thank you for your question. About Midway. When we talk about the adjacent products, you can see an intentional growth in the loan operations. Loan is doing really well. The new waves have had very good FPD levels. Delinquency is very well controlled. Revenue is growing slightly below the portfolio. That's because of the better profile of customers we've been attracting. We relinquish yield, but that is replaced by quality. We are very happy with that, and we expect to see that continuing looking forward. About consigned credit, like you mentioned, this is the initial phase of the product. It still accounts for a small share of our portfolio. We are still working on refining the model and the operation. The first results are positive. We're happy with what we are seeing. We see great potential here. The ramp-up should be gradual. We will adjust risk and return. The first signs are indeed positive. We see potential in this product. Thank you for your question. Great. Thank you for the answers. Our next question is by Gastin with Itaú. Hi, Gastin. Hi, good morning, everyone. I have two questions here on my side. The first is about gross margin, which has been a highlight in your results in recent quarters. Miguel, you talked about the levers. That was quite clear. I'd like to understand the state of achieving the full potential of those levers. We try to talk about that every quarter. You keep on evolving. Can you tell us from 0 to 100, where are you? Is there a lot to come when it comes to gross margin? That's my first question. My second question. You talked about the winter, André. I just want to connect the dots. A year ago, you were 100% transparent. You said that you did not have a good winter in 2025. You prepared for a better winter season this year. The comparison is better for you this year because of that baseline. I feel like you have invested more in winter products this year. My question is, now that the winter is virtually over, you still had some sales in Q3, was that a positive highlight? The revenue of winter products, was it relevant also in Q3? Thank you. Thank you, Gastin. These are great questions, they can help us explain our business. Last year, our winter season was not very good, this year, yes, we prepared better. Part of the growth we see this year is related to that. We still have some cold weather to come, I think that we'll still see some results in the coming months. This year, we had different effects. The World Cup effects. We estimate losing 3 percentage points in Q2 because of the World Cup effect. What we made in the winter season was offset by the World Cup effect. Of course, there are always other effects coming, this question helps us give more color on how we manage the business. There is always something new coming up, and we have to prepare. I think that the key word here is to be quicker and have a more integrated fashion with a factory that participates quite a lot. That's our third pillar, fashion efficiency, and we always see opportunities to improve. Yeah. About margin, if Miguel wants to add anything after me, please do so. Yeah, for many quarters, we've been delivering margin growth, and this is the result of many actions, many activities. Of course, there's no silver bullet. That's actually the result of many different actions coming together. People ask, Is it over, or do you see more potential to growth? Well, we grew 1.9% three years in a row, 5.7% in three years, but we still see opportunity to grow there. As Miguel said, some of the opportunities have already been explored, but we always see something new coming up. I think that Riachuelo's margin still has some room to grow. It's hard to say how much we're going to grow. 1.9% would be great, but we cannot promise that. Yes, there's a lot of work to do. We have not reached the full potential yet. Excellent, André. That was very clear. Thank you. Thank you, Gastin. Our next question is by João with Citi. Hi, João. Please go ahead. Hi, thank you, Isa. Congratulations, everyone, on yet another quarter of robust growth. I have a few questions on my side. The first is to you, André. I'd like to understand what you're thinking. I know that your focus here is on Riachuelo and not the competitive landscape, we had relevant changes in May with the exemption of the federal taxes for cross-border players. In the past, we noticed that many companies and the industry were facing this challenge to compete with these players. How will you differentiate your value proposition here and make sure that this tax exemption will not affect your path that has been very consistent in apparel? A second point. I think that the cost issue is clear, Miguel, what other low-hanging fruits can we find at the factory or elsewhere? I don't know whether there is anything related to dynamic pricing that you can comment on and that can help in retail gross margin. We know that the FX is favorable now, I'd like to hear about the moving parts for gross margin and what are the opportunities that you still see that might not be low-hanging fruits, but that are still existent. Thank you. Thank you, João. Okay, you're asking about what we have in mind, me and the board. Riachuelo is 79 years of age. We will celebrate 80 next year. We always look at the future with optimistic eyes. We want to keep on investing in our evolution. The economy has changed, but we are always investing to be better. We are always investing in the future and in our teams, in people development, in stores, our product portfolio, our factory, technology, DC. We continue believing that this growth mindset is what makes us stronger. Regardless of what happens, we want to be prepared. We want to be stronger and stronger. On the other hand, we know that we have to be prepared for possible economic changes that may come, and the best way to be prepared for them is strengthening our muscles and having greater margins. We have a long-term view, but we also have flexibility in the short term, and that's how our mind works. If we need to adapt, we're ready to do so. We have an agile structure, but always looking at the future with optimistic eyes. Now, about the tax exemption for cross-border players who've been growing for 12 consecutive quarters. In August 2024, they changed the rules, but we had already been growing, and we continue growing. We think that we have this tax asymmetry in Brazil that should not be happening in the long run. Even with these asymmetries, we've been seeing growth in five or six of the last 12 quarters. Although we have this competitive disadvantage, so to speak, we continue to strengthen our model, and we have become more relevant to consumers, and that has sustained growth. That's what we see, and there's no other option. We cannot stop. That's what we'll continue to do, but hoping that this asymmetry can end someday because it's simply not fair. Now Miguel can talk a bit more about costs. Thank you, João, for your question. We don't see low-hanging fruits now, and we haven't seen them for some time. I see strong dynamics here at the company focusing on agenda, methodology, discipline, and execution. We are currently challenging ourselves. Whenever a lever comes to a better level, we start thinking about the new wave and how to achieve the full potential of each opportunity. This makes us confident. We have over two dozens of initiatives, of groups focused on extracting the most of our factory and of the chain as a whole. Of course, we have a verticalized chain, so we focus a lot on our factory. What doesn't come from our factory, we can focus on pricing and markdown. Since last year, we've been testing some different methodologies and algorithm data, AI, to perform better pricing, looking at sell-through and specific windows of markdowns, rather than doing them very aggressively by SKU throughout the period. We are confident that we'll continue extracting sequential margin gains looking forward. Maybe not as much, but considering our ambitions, we continue disciplined and confident that there is still margin expansion to be achieved with pricing, markdown, levers, and factory efficiency and productivity, strengthening our value proposition in products like the D-Ultras, which I'm wearing right now, and André as well. We are disciplined and responsible, and we think that we can improve gross margins in the future. I'm sorry, Miguel. Low-hanging fruit was not the right term. I'm sorry. This quarter, you had almost one percentage point in gross margin gain from internal captures. Maybe not low-hanging fruit, but internal opportunities. Opportunities in-house. Almost half of the gross margin gains came from internal opportunities. Do you still see opportunities in-house? That was my question. I think that your answer was clear. If you allow me, one thing that people have been asking is about the short term. We had a good discussion with you about July and the World Cup effect, do you see any changes or should we expect a one-off effect in the beginning of the Q3? Hi, João. Thank you for that. Actually, we cannot give you any details about the Q3 results, but we can tell you that, yes, the World Cup had an effect. When the World Cup started, we saw a drop in flow, in traffic at our stores. When Brazil was eliminated, it improved a bit, it only improved dramatically after the final, which was on July 19. Yes, the World Cup had an effect both in June and July. You saw our results, and the good news is that when the World Cup ended, the world went back to what it was before. Yes, that's something we can share with you. We had 40 days of World Cup with a lot of interest, and that's expected. That is something we see every four years. Okay. Thank you so much, and congratulations again. Thank you. Our next question is by Isa with UBS. Hi, Isa. Hi, Isa. Hi, team. Congratulations on your results, and thank you for the opportunity. I know that you're tired of talking about gross margin, I have a follow-up question because indeed, you achieved a great level. I have a very specific question. Maybe we see opportunities to grow even more than expected. It's clear that there are still many fronts and many things to be done internally, operations, product, pricing. At the end of the day, is that actually above what you expected? Because I remember on your investor day, you said that you were working to deliver an expansion of one point per year, this quarter achieved a great level. Of course, Miguel talked about the seasonal effects and that the numbers may vary one quarter or another, this has been very satisfactory. I would like to hear about your expectations. Are you seeing more opportunities than you thought at first? Now a question to Fran about Midway Financeira. You are accelerating portfolio growth. Your levels are healthy comparing to your history and considering the macro scenario we're in right now, I'd like to hear from you what the dynamics are like because personal loans and consigned loans are growing a lot, this is only the beginning of the journey. Do you see a lot of space to grow? The credit or the credit card portfolio is 5x bigger than that. We see the deterioration of some NPLs there. Can you give us more color on the evolution of these lines? You said that the less than 90 days is well controlled, we see that there has been a deceleration of some cards quarter-on-quarter. Can you tell us about the quality of the new cohorts that you've been attracting, coverage rates, if this is satisfactory? I just want to hear about this also considering the uncertainties we see for the coming months with the elections and other effects. Thank you. Well, Isa, that was a long question, anyway. About margins, it was a great quarter, like you said, 1.9 points of expansion, and we see possibility to continue with this expansion, maybe not as large because this was indeed a very good quarter, and I think that will be closer to our ambition from now on. We continue disciplined to going after these levers, I'd say we would be closer to our ambition going forward. It was a very strong quarter. We had other effects, like the winter season and other effects in our factory, our own chain, looking forward, we think we'll be closer to our targets, also with space to continue ramping up. Now, Fran, I turn the floor over to you to talk about Midway. Okay, Isa, I'll talk about cards. I think that's a great question. If we look at the new cohorts, we see controlled FPDs at the lower historic levels, close to 3% FPD, and a good level of credit granting. We've been talking about that in recent years. We've been creating a good model and attracting customers with a better risk profile, and this improves the health of the base. The card portfolio has a longer duration, we have customers who have been with us for a long time. We see that the short NPL is very well controlled, even in the long one, which is more under pressure, if we look at up until 180 days, we see that it's almost stable. There is a bit more pressure on customers that are overdue for more than 180 days, they come from older cohorts. These cohorts have been losing share in our portfolio. In recent years, the cohorts are performing almost 30% better than those of the past. The growth is pretty much in sync with inflation. We are improving the quality of the cohorts, the pricing, and profitability. We believe this is appropriate for the scenario. If nothing changes, we think that this is a good base for us to improve the health of the portfolio and until we can see the macro scenario improve later on. Okay, that was very clear. Thank you, everyone. Thank you. Our next question is by Nicholas with JPMorgan. Hi, Nicholas, go ahead, ask your question. Hi, Isa. Thank you for the opportunity. Well, I had another question about gross margin, I would like to understand something about the factory. The difference in margin between an item produced by you or a third party was about three points. Has this changed in recent quarters? Is the factory being more efficient now because we see improvements in gross margin. Maybe is that because the factory is closer to the top of this range, or you have been unlocking even more improvements that are now reaching 6 to 8 points? Now about capital structure. You said that you have other initiatives, maybe You can tell us about what we can expect about this in the coming year. Thank you. Hi, Nicholas. This is André speaking. I'll start answering the question about factory, then Miguel can talk about capital structure. While we've been working with a better integration of the factory and our commercial team, in the first cycle, we increased the volume at the factory, that in itself brought much more margins to the factory. Now, with the full factory, the margins have been even better, but the numbers are still six to eight. This hasn't changed much, but we are now working on the make versus buy. This is a fine-tuning of what is to be sent to the factory or not based on quality and cost. That's indeed fine-tuning because we have over 100,000 SKUs, so our evolution is now focused on that. Looking ahead, we think that we can still generate more efficiency at the factory, in the last cycle, we focused more on make versus buy than on factory efficiency. If you plan better and if your gears are well-oiled, the factory can operate better and have better margins. This is what we've been doing. We still see opportunity, we are now focusing on which products should be sent to our factory or not. Miguel can talk about capital structure. Sure. Hi, Nicholas. Thank you for your question. The fifth pillar of our strategy is capital structure. We've been working strongly on improving our ROI, not only through operations but also focusing on the capital structure employed, we made developments last year. The first was selling the mall. That helped us to monetize and focus on our core business with an asset that contributed to the results and was very well priced, that was an important movement. Also last year, we did an agreement management of all of our debts. We got all of the debentures and issued a new debenture going from a cost of DI plus 1.9 to DI plus 0.95, that was great efficiency. We also repositioned the company at a healthy profitability level, this also can come from tax shield, we have other fronts in the capital base to work on, like having a better turnover of assets, using them to reduce the burden on our cash, improve our operational model. Last year, we started launching our first FIDC, this is a year of full potential that can benefit us greatly. Yes, we still have many levers in this fifth pillar, we should continue improving our ROIC and increasingly converting EBITDA into net profit, like we mentioned, in addition to the operational part. Okay. Thank you. That was very clear. Thank you, Miguel and André. Our next question comes from Ian with BTG. Hi, Ian. Hi, Isa. How are you? Good afternoon, everyone, André, Miguel, Francisco. I have two questions here. I think that my colleagues have talked about most of the topics already, I have two questions that are more outside the box. The first about the new store concept, the Incrivelmente Brasil concept. Can you give us more colors on the productivity level that you see in margins, can we talk about that in this new concept? Now talking about investment and capital allocation, I would like to understand the investments you've been making in DC. What other infrastructure are you adding? What is the stage of the investments in the DC of São Paulo right now? Hi, Ian. Yes. I'm missing a margin question here. Oh, you can talk about that if you want. We firmly believe that the company can stand out with product and experience, and the store is key for that. We worked throughout last year on the pillars of our brand. We relaunched the brand in October, November last year, and we developed a flagship store that was launched in December, the pop-up store in Pinheiros. This was the first store of the future of Riachuelo, a store that will reveal our experience in the coming years. We had no store there, we opened a store with a new format, 250 sq m in size. It's hard to compare, but we had great feedback from consumers and good numbers. We cannot compare them to anything. In April this year, we did the first renovation, actually half of the renovation, which was to renovate the men's floor in Barigüi Mall in Curitiba, and yesterday we opened the women's floor. This is just the beginning of the process. The men's floor results have been great, but since this is only one store, I don't think we should talk about numbers, but we'll be able to measure now the results of the women's floor as well. We're very excited about that. This quarter, we'll start an expanded pilot program with seven renovations to happen throughout the months, and we'll be able to share more results in the future once we understand the impact of these other stores. We believe that the new format will offer a better experience with our product and our brand, and we expect growth to come from that. We're going to work hard and cross our fingers to reach positive results in the coming quarters. Now, Miguel, would you like to talk about logistics? Sure. Margins or logistics? Logistics, okay. About the DC infrastructure, and thank you for your question. Yes, we talked about that on our Investors Day. We have a fully automated DC. It's been working like that for over 10 years. We've been ramping up volumes and accelerating the company strongly in recent years. We saw that probably in 2028, 2029, because of the digital growth and the centralization of the digital inventory in the Guarulhos DC, we felt a need for a greater leap in automation to be more agile and quickly. When it comes to investment level, I'd say we are in second stage. Last year, we did first stage. This quarter, we did second stage, but there is a third stage yet to come next year. We are still ongoing with this process. We are not yet benefiting from the agility of the Guarulhos DC. We'll probably be able to benefit from that in the Q2 or Q3, Q4 of 2028. We are investing. This is second stage of investments. Next year, we're going to have third stage, but the benefits will only come in the beginning of 2028. Actually, the Q4 of 2027 or beginning of 2028. Okay, thank you so much. Thank you. Our next question is by Lorenzo with Bradesco. Hi, Lorenzo. Hi, Isa. Good afternoon, everyone. Thank you for taking my questions. I have two questions. The first, I'd like to understand your thinking for SG&A, especially retail SG&A. When can we expect a better dilution of expenses? Up until when will you continue to reinforce your structure? Now about cards. We saw the Riachuelo card and the upfront payment gaining share in sales at the expense of third-party cards. We want to understand the drivers that would explain this increase in your card share. Are there any new drivers affecting this? Thank you. Thank you, Lorenzo, for your question. About SG&A and dilution, in the beginning of the journey, we did a new repositioning. In the first year or 18 months, we got between one and 1.5 in leverage, and we saw this as a healthy level for us to aim for at the long run. We always look at the long run. It would be easy to say, let's capture in the short term to focus on this, but that's not what we're doing, and we're being very disciplined and deliberate, intentional here. We want to keep on planting seeds to make sure we achieve our ambition of continuing to accelerate the fashion chain with products and experiences. Last year, we relaunched our Riachuelo brand, and now we're starting this new journey focusing on point of sales experience. We do not look at the short term when it comes to dilution gains, because what we want is long-term consistency and continuity. We want to continue capturing the same store evolution at the company. We think that we are now at a level that can help us continue accelerating our business going forward. Margin gains and EBITDA will improve as a result. We see that this current configuration has been bringing great results in the last 12 quarters, and they will continue to do so in the future. Yes, the ambition slide shows our targets and what we value. We talk about same-store sales, apparel, and margin expansion, but not G&A dilution. We talk more about conversion of EBITDA into net profit. These are the levers we've been working on that will generate value. About cards, we don't have a shared target for cards. What we do is to improve experience and improve the credit models so that we can approve better customers with a better risk profile, and that increases approval. We see a good sign here is that card customers have a better recurrence in the stores and also in our e-commerce channels. This improvement in share is because of the improved experience in stores. If you go to a store and you buy with a Riachuelo card, things are much smoother than they used to be. You can buy only with your taxpayer number, and you can use facial biometric recognition to do that. The clients see a good value proposition, a great cashback program, and they feel encouraged to use the card. Also, we have different credit models. The FPD of cards are at the lowest levels. We can approve customers. Considering even with this macro scenario, we do not have to stop credit granting. These two things, a good credit model and a good value proposition, make the share of our cards to increase, bring in benefits to Midway and to retail. We do not have a target. It's just a consequence of our actions, but we're happy that this has been growing slightly. This helps both businesses. That's very clear. Thank you so much for your answers. Thank you, Lorenzo. This concludes our Q&A session. If you have any further questions, our IR team is available. I turn the floor over to André for his final remarks. Thank you, Isa. I just want to thank you once again for being here with us, for helping us grow our company. This was yet another quarter of excellent results, and we're very proud of that. As I said in the beginning, I feel like we are starting a new phase of our transformation. The first phase was focused on adjusting the company, evolving the teams, cultural evolution, process evolution, and now we'll start to see a different Riachuelo with new stores, new formats, renovations, and opening of stores. I think that we can boost our experience. I'm looking forward to this new phase, which will bring positive results. I see that our team is more mature and aligned to make this happen. We have a genuine feeling that we've done a lot, but we're only beginning. There's still a lot of good things to come. We continue dreaming about the future and working really hard. I'll see you next quarter. Thank you once again for joining