Good morning. Welcome to SBF earnings video conference. Today, we will be going over the third quarter results and the performance for the first nine months of 2023. With us today, we have Pedro Zemel, CEO, José Salazar, CFO and IRO, Daniel Regensteiner, Director of Corporate Finance, and Luna Romeu, Investor Relations Manager. Please note that this event will be recorded, and during the company presentation, all participants will be on mute, listening in. Following that, we will begin the Q&A session exclusively for analysts and investors. We'd like to clarify as well, that any statements made during this teleconference about SBF's Group business outlook, operational and financial projections and goals, reflect the beliefs and assumptions of the company's management based on currently available information. Keep in mind that these statements involve risks, uncertainties, and assumptions as they pertain to future events, and therefore depend on circumstances that may or may not unfold. Investors should be aware that general economic conditions in the industry and other operational factors could impact SBF's future performance, leading to results that may significantly differ from these expressed in these forward-looking statements. I'd like now to turn it over to Pedro Zemel, who is going to begin with his presentation. Mr. Zemel, you have the floor. Good morning, everyone, and welcome. Welcome to the Q3 earnings video conference 2023. Thank you for your time and your interest. In our agenda today, I'll start with a brief introduction, giving you an overview with the most important messages for the quarter. Then I'll turn it over to Salazar, who will deep dive into the figures of Q3 2023. And then I'll be here available with my team for the Q&A. We invited analysts from banks, who will be able to ask their questions using the microphone. Other participants can use the Q&A feature of the platform to send in your questions in writing. We will answer as many as possible live, and otherwise, our IR team is going to be available for the other answers. So let's begin. Before looking at the figures of Q3, I'd like to zoom out a little bit and frame our discussion today. We experienced an important moment of growth in the company, and we believe that we really delivered important growth over the past few years. The IPO was held in mid-2019. So it's been four years ago, with the pandemic in between. In 2019, the company that went public was Centauro, had the revenues of BRL 3.2 billion and BRL 8.6 billion LTM, in terms of revenue. An important share of that was the acquisition and development of Fisia's business. Centauro also grew by nearly 40%, actually 38%, to be more precise, which was very important. Now, a company that, as I mentioned, in the past 12 months, made BRL 8.6 billion. Now our efforts focus on being able to extract the best net income and the best cash generation of this BRL 8.6 billion revenue. We understand we are not yet there in terms of efficiency. We will be migrating from a growth phase into a profitability phase and cash generation phase. So this is where we are gonna focus our efforts so as to increase net income and have cash generation that are proportionate to our sales now. So this transition for one phase to the next requires adjustments, and we've been adopting a number of adjustments in the past quarters, working on the required steps to adjust inventory size, investment size, and SG&A size. And we are happy to see that in Q3, these efforts and work start to reflect on our results, but our P&L and balance sheet. The quarter figures show that our net income in Q3 2023 was BRL 1.8 billion, 22% higher than the same period last year. The EBITDA was BRL 169.4 million. This ex-IFRS adjusted figure. It's a 77.4% growth over Q3 2022, and net profit also ex-IFRS, adjusted of BRL 70.5 million, which is 52.5% higher than the same period in 2022. That also, with the important dilution of expenses, 4.4 percentage points lower than the same period last year. So this was important for the results. Even with the need to still invest part of the profit in inventory reduction, using discounts and accelerated markdown approach, and we've been working on that since the beginning of the year. So we've been able to be profitable and deliver results despite this need of this scenario, and we are happy to see that that has reflected on the figures. The results are much better than the past quarter, but still, we see this as a continuity of what we've been doing. We are working on this transition from growth to profitability. There's this period that of adjustments, which is inevitable, and the adjustments start to yield results in terms of figures. At Centauro, excellent work's being made in increasing profitability. This is a big challenge for Centauro. Centauro has had better margins. It was better in 2019, for instance, so this is what we want to achieve again in the future. Not maybe not next quarter, but that's what we want for the near future. The team there did outstanding work, starting with a very sound work in the brick-and-mortar stores, looking at growth. The quarter was complex, given the World Cup. We launched the Brazilian jersey, the shirt, last year, a little bit before Father's Day. That was important for the results. Then the team adopted a number of adjustments, so that could go on as extracting value from this channel. In the digital channel, profitability was recovered. Also, hard work was done to adjust freight subsidies or shipping subsidy, and being more aware in the use of paid media as well, so as to improve profitability and ROI. Also trying to use multi-channels to make the channel more profitable as a whole. Multi-channel approach is important for our results today and future outlook. Centauro has 225 stores in more than 100 cities and 26 states in Brazil. So we need to be able to make the most of this network so as to offer better services to customers and also to become more profitable at the same time. So this is an important avenue to pursue, and the metric that we see there is the Click and Collect share of sales, which is the modality with higher profitability and higher NPS, and it grew by 8 percentage points when we compare September to January. There were adjustments early on. We corrected course earlier this year. We adjusted systems and processes so that we could again grow this channel. So for the remainder of the year, this is also our focus, and next year as well, making Centauro more profitable and investing in multi-channel approach as differentiation. So the results at Centauro was good. Now on to Fisia. We still have the same strategy, and the results have been very positive. I also wanted to zoom out a little bit here. The transaction closed in December 2020, so less than three years ago. And then there was the pandemic and all of the turmoil, so a lot has happened. So I just wanted to point out what this team has been able to build over these three years very quickly. And just an anecdote, but I think important. When this transaction was announced, the relevant fact was announced, we mentioned that the net revenue of Fisia in Brazil in 2019, so before this transaction was closed, had been BRL 1.9 billion. In 2019, Fisia had a net revenue of BRL 1.9 billion, and in this quarter alone, Q3 of 2023, the net revenue was BRL 1.1 billion. So that's a testimony to the fact that Fisia's been able to really develop its business in less than three years. So we planned to do that, and investing our channels within digital and also stores. So that's also the result of hard work and effort, with some hiccups along the way. Because of the SAP migration and the deployment of the e-commerce platform, and in Q3, finally, the logistic efforts of nike.com and the new Fisia brand, now working on 100% of the orders coming in from nike.com. That's since September. The operation is flowing seamlessly in their warehouse, with capacity to ship 70,000 items a day. That fortunately, it's been using good part of that capacity because the digital channel is doing well. In Q3, Fisia grew by 42.5% when compared to the same period last year. Part of that, because of markdowns, there were price reductions and discounts to reduce inventory, and of course, that has potential impact on sales, positive impact. But also because of the investments we made in the digital channel, and also in the growth of stores. In the past 12 months, we opened 19 stores. Fisia today operates 43 stores in Brazil, and 19 of them were opened in the past 12 months. We are very happy with the Fisia figures for Q3. This is the result of a continuity of efforts that started three years ago when the operation was closed. Now, looking at cash flow and the balance sheet, we see that the key in Q3, we reduced inventories by BRL 120 million. Usually in retail, there is inventory increase. So this is Q3 against Q2. Usually, there's an increase in inventory at this time of the year to prepare for Black Friday and Christmas seasons, and we reduced by BRL 121 million because we wanted to manage a healthy level of inventory. There's still some ways to go, but that was expected, that was on plan. We still need the seasonality of Q4, so as to bring the inventories to healthy levels. But Q3 is along the lines of what we had planned, and we are very happy with this BRL 121 million reduction in inventory. That, combined with a number of measures regarding payment terms, minimum payment installments, maximum number of installments, and adoption of fixed payment method. So a number of initiatives led us to generate BRL 115 million in operating cash flow, and last year, in the same period, we used up BRL 70 million. So that helps us reduce the company's leverage from 3.35x Q2 2023 to 2.98x in Q3 2023. So that's as of September. And with Q4 seasonality and the adjustments I mentioned, we expect to be back to historical levels by the end of the year. So this was just an overview of the big picture. Also wanted to let you know what we expect. So Q3 results were, of course, much better than Q2, but this is a work of continuity. We've, we went public and we grew, there was a Fisia position, Fisia grew, Centauro grew, and, we are now just adjusting things so as to be able to increase, net income and cash flow from this large comprehensive operation. Adjustments are required so that we, we'll be at this good expense level, and also we will put inventories to healthy levels to this with this new moment of, income generation. So this is what we are going to go on doing in Q4 and 2024, focusing on profitability, net income, and cash generation. Just like in Q3, also in Q4, we expect to have a higher than normal discount level because we are committed to bringing inventory down to healthy levels. But we believe that what we delivered in Q3 indicates that we found a way through doing this SG&A adjustment, proportionate SG&A adjustment, to have healthy results in spite of this need for markdowns. Now our guards are up because Q4 for retail is the most important in the year in terms of sales and profit. There's Black Friday, there's Christmas, and we will focus on that, deliver what is required by the end of the year. So eye on the ball and delivering the earnings and cash that we expect in Q4, and also keeping on working on key projects. I'm proud to see, our team's ability to deliver results and at the same time, delivering on a very well-led project for the new warehouse. Also investing in multi-channel and delivering short-term results, and at the same time, building for the future and the coming years' results. This was Q3 very briefly. I'll turn it over to Salazar, who will deep dive into the figures, and, I'll be back with you for the Q&A. Over to you, Salazar. Thank you, Pedro, and good morning, everyone. I'll give you more details about the main items in the company's P&L. 22% growth, as Pedro mentioned, YoY. Well distributed, along the different channels. An important point here is to so, so consistency in physical, digital growth, that's very important. Of course, Pedro mentioned that we are also decreasing inventory, but that shows that we've been able to do that, and at the same time remain adequately profitable. We start to feel a recovery in the wholesale market in Q2. There was a low in wholesale orders, but now we see a recovery in wholesale orders, and there was a 20% growth year-on-year. Brick-and-mortar stores, in general, for the two businesses, had a robust performance. That includes Centauro along. Again, especially considering the last World Cup was held. So these channels are ready for growth and also adjusting so as to become more profitable even with the discounts. This is a breakdown of our EBITDA, which reflects a number of efforts. We see Fisia contribution increased by 41%, even if margins are under pressure. There are two main reasons for that. First, strong work on SG&A, and with recovery of growth, a dilution of fixed costs in some channels, such as wholesale, for instance. And another important point that I should mention here is that with the inventories back to healthy levels, the seasonality benefits the company, because I'll be selling inventory that I was there in the first half of the year, and most of them I've paid royalties already, so that also has a positive impact on Fisia's figures. At Centauro, the e-commerce profitability, as Pedro mentioned, and also cost adjustments that were really strong there. So as to face this moment of the market with more discount. And non-allocated SG&A, which is the support teams for the BUs, we also see hard work in expense reduction over the first half of 2023. So the efforts were everywhere at the company, efforts to... In this period where we are working with greater discount because of inventory, but that is offset with these efforts of expense reduction. So that's very disciplined execution of expense management. So, in the company, we look to find all of the opportunities that could be found. And also, of course, we're always looking for more opportunities, but we've been able to execute on them. Without neglecting long-term results, we didn't do anything that would be just a chicken run in terms of expenses. We are really concerned with the longevity of the organization, and we are working hard on expenses, but with a focus also in the mid and long runs... So this is our net profit breakdown. The net profit, net income growth was led by better operating performance. There was a 74% increase in EBITDA. Financial expenses were higher, both basically because of highest net debt. The net debt is higher than what we would like to have because of the higher inventory levels, but we are reducing that. And of course, when the company becomes more profitable, you can't have your cake and eat it, and therefore, you're gonna be paying more taxes than we paid last year. So again, we begin with the deleveraging that we are expecting next year, actually, not next year, for the next quarter, actually, there will be also a lower pressure on financial results as well, and this is an important point. Some cash generation figures. This is also something that Pedro pointed out in his presentation, Q3 against Q2. We see the net debt variation of BRL 39 million, roughly, when last year in Q3, the variation was BRL 195 million. Why is it smaller? Well, basically because of the company's operating cash flow. When we should be using cash to grow in Q4, we are actually adjusting working capital and inventory and working on expenses. There's also dividend payout in Q3, early in July, and financial expenses slightly higher. So that's the result of the cash generation efforts. So there's a BRL 185 million improvement in cash flow when compared to 2022. So that, this is yet another sign that the execution discipline is being achieved. Of course, of course, there's still Q4 ahead of us, which is just the most important quarter of the year for retail. But again, highlighting what Pedro said, this is all aligned with the plans we had for Q3. So this is just a backup slide. Just skip over that, and this is Fisia's P&L, showing you Q3, 2023 compared to Q2, 2023. And there are some important points to be highlighted there, and there were some questions about Q2. First is, is that operating leverage grows naturally as the company grows. Second, that we start to see the effects of royalty timings. And the first half of the year, we were under greater royalty pressure because of our higher inventory levels. Now, we are doing all of the adjustment of inventory, which is going to go on in Q4, so there's going to be an impact on royalty expenses. There is a decrease in fixed expenses at Fisia, as I mentioned earlier. Also, there was a concern in Q2 regarding our discount level, if maybe it should be higher over the year than it was in Q2. But in Q3, we gave fewer discounts, actually, regarding when we compared to the Q1, which would be the ideal margin. So comparing the markdowns in Q3, they were smaller than in Q2. There's still logistics effects that are reducing our inventory costs. We are also getting this expense line right, so also smaller pressure in Q4. Also there's the warehouse duplicity, which is against us, but as Pedro mentioned, there's the warehouse project that finalized in September, and this also decreases the pressure on this expense line of— So Fisia will again recover a better profitability level, more in line with its business than it was in Q2. Now I'll turn it back to Pedro. But again, I'd like to stress, as Pedro mentioned, that we have Q4 ahead of us. We're doing everything according to plan, but still, Q4 is ahead of us with two important seasons in it. Thank you, and back to you, Pedro. Thank you, Salazar. So we've been in touch with some funds that gave us feedback on our video conferences, so we adjusted a little bit our Q&A. So first, we are doing a video conference instead of just a call, and, the sell side analysts will now be able to ask their questions, using the microphone. So that's for the sell side analysts. For the other participants, we ask you to please send in your questions in writing using the Q&A feature of the platform, and, we will answer as many questions as possible today during the call, and the ones that we're not able to answer here, will be answered by our investor relations team after the call. So let's have a look at, who wants to ask questions. Good morning. So the first question is Irma Sgarz, Goldman Sachs. So you can ask your question. Good morning, and thank you. I'd like to understand your inventory adjustments. I know that it's an ongoing effort, and it's likely that in Q4, it's going to be a big revolution. When do you think your inventories will be on balanced levels? And then, as of when can you normalize your markdown levels, and the other lines of procurement and working capital? The second question is, this wholesale channel, of course, was less important during this inventory adjustment, but you said that there was a recovery in Q3 after hitting rock bottom in Q2. But I'd like to learn more about the health of this channel, or in other words, how is it that we can imagine the breakdown between channels in 2024 onwards? I know that the DTC overall will become more important, but the wholesale channel also plays an important role, so I'd like to hear from you about that balance. Thank you. Thank you, Irma, for your questions. So I'll start, and then Salazar and Daniel can add on. So, so regarding inventories, our expectations, and I'll mention the risks later on, but the expectation is that we will be back to normal inventory levels by the end of this year. And then next year, we will be planning a more, quote, unquote, "normal year." So what needs to happen for that to come true? First, procurement needs to be the right size, and it will be because this is a decision that was made months ago, and we adjusted procurement for the second semester. The second, which is the risk that we are not going to be achieving our goal when we expect, is Q4 sales, which are huge because of Black Friday and Christmas. So I mean, CMV leaving the company, and this is something you don't control. So we are working to limit any excess, and we hope that this is going to be materially possible. Because next year and onwards, the profitability goals we have are not would be not supported by the markdowns we are offering now. And your second question about wholesale channel. It's important to mention that the wholesale channel suffers the impact of this pricing scenario. That's not healthy for Fisia's partners who are under great pressure as well. This changing in scenarios, and the demand that we all expected was going to be at a different level this year when compared to last year, also led to increased inventories, actually, for most retailers, and everyone's dealing with that. For us, most important thing is to adjust the channel to its right size. So when we get the sales expectations right for the channel, then we will adjust logistics and expenses to for the channel accordingly, and then we will be able to have a profitable and healthy channel. So the challenges in this transition period, looking forward, we think that this channel will improve gradually and not overnight. Inventory levels and the chain as a whole be adjusted gradually, and with that, gradually, the channel grow. The coming quarters, we don't expect the wholesale channel to grow significantly. Growth is coming from stores and nike.com. Well, further down the road, when inventories are normal, this can become a very important channel. There's a number of consumers or customers that only buy Nike through these partners. So these are—they are important partners for us because their geography coverage and the type of customer that they serve. So—and our relationship with these partners is very important for this year's success. Thank you. Thank you, Irma. Danniela Eiger, XP, you can ask your question. Good morning, and congratulations for the call and the video conference. Now it's much better. Congratulations for this change. I have two questions. First is about your leveraging dynamics. You mentioned that the expectation is that it's going to be levels according to your historical levels by the end of the year. So what are the main levers for you to achieve that? You mentioned your procurement adjustments and risk, then, for Q4 demand. So if you could tell me more about working capital, inventory, supplier, receivables, and in operations, what to expect. I think that would help me understand what the risk level is. And the second question is about profitability dynamics. So I'd like to hear from you more about this year's gross margin and, what was the impact of, lower, what was the impact of lower taxes as a percentage of your gross revenue? And you also mentioned that you still need markdowns, but how do you see the situation going forward as the channel is going to be increasingly helpful in your channel mix? Thank you. So, Danniela, in answer to your first question, there's a number of levers, so let's talk about some of them. The first one is reducing our purchases. We decided to reduce purchases because we wanted to reduce inventory. We adjusted until the end of Q3, and for Q4, the holiday collection, we did a more stringent adjustment. So that's already a given. That's the first point. The second point is expenses. So we expect that results will improve when compared to last year because we are cutting down on expenses, and there were expenses in the first half of the year that will no longer be there. Also, in Q2, there were royalty expenses, for instance, we will no longer be there. So that's also a given. Also, tax credit seasonality at the end of the year is a given. There'll be higher sales in Q4 and better performance because I will scale up and sell more, and therefore, there's going to be more tax credits. So the assumption is that that's going to happen because of this natural seasonality. So overall, I know that there'll be higher tax credits. That's also a given. What else is a given? So, as Pedro mentioned, steps we took in terms of receivables, we increased the minimum installments. We decreased payment terms that used to be 12 months. It's no longer. Also, in Q3, we started offering fixed payment with 5% discount. It was very successful. So you give 5% discount, you can work on your gross margin to offset that discount. And so it's positive for cash flow, even if not on overall results. So that's all given. So what's not a given yet is precisely the most difficult part, which is Q4 sales, because there are two important dates, Black Friday and Christmas. So I'd say that everything we could have done has been done, and we already see the results. Our ambition now is for a specific Q4 sales. And as to your second question, I don't know if I understood your question, but I think Daniel understood your question, so I'll turn it over to him to answer your second question. Thank you, Salazar. If I understood your question correctly, you wanted to know how taxes benefited Fisia. So we deployed SAP last year, and we started then designing our own shipping routes in Brazil, and we did what we call import corridor. So receiving our imports through Minas Gerais, and enjoying, therefore, a tax benefit that Centauro was already receiving, now Fisia is receiving as well. So with that, we reduced the taxes paid, and that's improved profitability. So now Fisia enjoys the same tax benefits that Centauro already had before, and that's a very good effect. That's. Thank you very much. That was precisely my question. Thank you, Daniela. Maria Clara Infantozzi, Itaú BBA, BBA is going to ask the next question. Good morning, Pedro, Salazar, and Daniel. Thank you for taking my question. Congratulations on your performance. I'd like to ask about Fisia sales. We were positively surprised, especially for wholesale for Fisia. So how do you see the inventory health of the most important partners of that channel? And in case they are healthier, the promotions at Centauro also should improve in Q4. But thinking about Fisia, I'd also wanted to ask you if, given the focus on improving inventories for Q4, if you're going to be aggressive in your promotions than you were in Q3. And also, if you could give more details about sales dynamics in Q4 with the Black Friday and Christmas, if there's anything you could share with us. Thank you. Thank you, Maria Clara. So you asked about wholesale, you asked about Centauro's margin dynamics. You asked about our discounts and for Fisia, and fourth, our expectations for Q4. Okay, so four questions. First, we don't expect that in Q4, all of the inventory issues of retailers who are Fisia's customers will have been sorted out. They have not been in Q3, they won't have been in Q4. It's a gradual process, so we don't expect that this problem has been solved, and then the wholesale channel will take off because the retailers are demanding product. It's a gradual process, and it is expected to remain gradual. We don't expect this issue to have been solved by the end of the year. What's the impact of that on Centauro's margin? Centauro is also contributing to reduce the industry's inventory level, which is going to still be important in Q4, gonna be there in Q4 as well. Inventory levels are high for all of our Centauro's partners, and Centauro is part of this solution. That help us increase sales and decrease inventory, just like we did in Q3. So again, I don't expect that Centauro's gross margin will not be impacted by the markdowns, just like we saw in Q3, actually. And your third question... There's an important impact of sales volume in Q4, and we are working on some variables, our ability to generate gross income and profitability, and to decrease inventory at the same time. So Q3 is a good indication of the balance we've been able to strike so far. So again, I don't expect any drastic or dramatic changes in this strategy, in this design before 2024. But then we expect to gradually reduce markdown levels and drive the market into a healthier dynamics. And finally, Q4 is going to be the topic of our next earnings call. We are here focusing on what we can control and manage and preparing for Q4. I'm very optimistic regarding our execution capacity. And so let's see what the Black Friday and Christmas demands will look like. But our teams are ready. There's a new warehouse, it's working properly and well. The stores are Rede Centauro and Cias Centauro, many stores, and everyone is excited. It's a challenging time in retail, but it's the best time of the year in retail at the same time. So I'm happy with our preparation, and let's wait to see what the results will be. I think I've answered your 4 questions. Did I, Maria Clara? Yes, you did. Thank you very much, Pedro. Thank you. Gabriela Ferrante, Safra, will ask the next question. Good morning. I have two questions. You mentioned that your markdown levels in 2024 is going to be lower than this year, but what about Q4? What level of markdown are you planning? In Q3, markdown was lower than Q1. And also a question about new stores. Are you planning on opening new stores in 2024? Thank you, Gabriela. So for Q4, we go along the same trend this year. We need the markdowns, just like we had in Q3. The difference in Q3 is that we could already see SG&A adjustments that were also adopted over the year, but now we see the impact on results. So we see that it's possible to deliver on performances in spite of the markdowns. And we still need the markdowns and the sales volume of Q4 for us to get inventory to healthy levels and to generate the cash that we expect this year. So it's a gradual process. In 2024, with healthier inventory levels and healthier buy, it's going to be much easier for you to buy correctly so as that you can manage your markdown on a healthier level. But that's as of 2024. As to opening of new stores, we will open new stores looking at opportunities in the market. But in terms of pacing, our priority in the following year is profitability and cash generation. So in that regard, we might slow down the opening of new stores when compared to the past few years. And Centauro is going to work really hard on profitability for area and multi-channel. And Fisia, after this surplus inventory is solved, there is opportunities for Fisia to be more efficient in working capital so that we can have higher return on invested capital. So Fisia is going to reduce inventory, and we'll have projects, and we will do it smartly. So the number of stores that we open is not be as many as in past years, but we are open to new opportunities, and we will, oh, yes, open new stores if they're good business opportunities for the company. So, about Centauro stores specifically, do you expect it to close down stores so as to improve the profitability of the other ones? No, we're not planning on doing that. We are not planning on shutting down any stores. But looking forward, we don't plan on. In the short run, we're not planning on shutting down any store. We look at the quality of the projects. During the pandemic, there were some shopping malls that weathered the prices, but shopping malls that didn't weather the prices so well. At the same time, inflation was high. Many contracts were adjusted to IGPM, which is the general price index, and that had an impact on leases. So we were able to renegotiate leases in most malls, and that, combined with high interest rates and the expectation that stores needed to be more profitable to support the working capital that they require, led us to shut down some stores earlier this year, Centauro stores. But the portfolio is healthy now, and we are not planning on shutting down any additional store. Well, we keep our eyes open. We are not. Our business is not that of shutting down stores, of course, but we are always monitoring our portfolio, and we work hard for the stores to be profitable and to generate value. But in case they don't, of course, we review our plans. Thank you for your questions, Gabriela. Vitor Fuzikawa, Santander, will ask this next question. Good morning. My first question is about inventory quality. Do you use any metric? Do you know, for instance, average age of inventory items? Or more qualitatively, do you have any metrics for your inventory? And the second question is about the company's SG&A. You made adjustments, but do you still see room for further adjustments? Because this could be an important profitability, profitability driver for you. Thank you, Vitor. So first question about inventory quality. Very good question. Well, there are two points there. First is a structuring element. Most of our inventory is not perishable. Of course, there's some dated items, for instance, the jerseys of soccer teams, but most of our inventory is not dated or perishable. So we've never had problems with inventory quality, but rather of surplus inventory. There was too much inventory, too many things in our inventory, not, not a problem of quality. And the second question: we've been very careful in designing our discount approach, and we've been using markdowns to. We have higher markdowns in older items. So we want to reduce inventory, but also at the right place, so that we can get 2024 started on a healthy inventory level. So we are looking at that. And also, you asked about SG&A. We're still looking for opportunities. It's an important driver. We are. We, we're looking for opportunities to be more profitable, and, it is inevitable that we put on greater pressure on our SG&A, greater scrutiny on everything we do. That's always going to be an ongoing effort. I believe that Q3 has shown the results of the adjustments we adopted earlier, but this is going to go on being an important point for us in Q4 and 2024 and 2025 as well. Our objective is to become increasingly efficient, and as I mentioned earlier, we want to turn the growth we've seen in the past few years of up to BRL 8.6 billion in revenues in the past 12 months; we wanted to turn that into a last line result that is consistent with that. So SG&A is an important point for us and remains. Thank you. JP Andrade, Bradesco will ask the next question. Good morning, and congratulations, Pedro, Daniel, and Salazar. I have quick questions. One is about suppliers. Is there any adjustment regarding suppliers, or is this level you have today standard going forward? In terms of royalties, how do you see Q4? Is this recurring royalty expenses, or is there anything to be expected other than that? Thank you, JP, for your questions. You asked first about suppliers. There is the effect of our inventory adjustments, so we are buying less. So we're buying less, and that has an effect on suppliers. We buy less, and then we stop making payments, and then you see the effect on cash. So I'm not benefiting, benefiting because I'm not buying. So when inventories are back to normal levels, we will be buying regularly every quarter, and the supplier account will go back to normal levels as a consequence. And also, Daniel, the commercial terms we have with our suppliers have not changed. I still pay Nike in the same terms. Centauro is paying its suppliers in the same payment terms as always. So after this situation normalizes, we'll go back to normal levels. As to royalties, Salazar mentioned in his presentation that we pay royalties to Nike when the products are delivered and not when we sell them. So when you receive and then you sell, royalties will be consistent with sales, which is not what is going on now, because we were buying a lot, that was our inventory and so we were paying royalties more than we were selling, and now it's going to be the opposite. We're gonna be paying less royalties when compared to our sales. So we expect positive effects on our results Q4, and then everything's back to normal in 2024. Thank you, and again, congratulations. So with that, we end the Q&A session. I'd like to turn it over to Mr. Pedro Zemel for his final remarks. Thank you. Thank you, everyone, for your questions. I think we answered all of the questions, but in case we haven't, we are available to verify additional questions later on. Thank you everyone who's been together with us along this journey. So all of the investors, shareholders, the board, the management team. This has been a challenging year, but everyone has kept their cool and executed and delivered performance despite of the challenge. Challenges will always be there, but this execution capacity makes me confident that this company will achieve its goals, and will grow its profitability and its cash generation in the coming years. Thank you for your attention and for your time. And do get in touch in case you have other questions. Have a great day. SBF's earnings video conference ends now. Thank you very much, and have a great day!