Americanas SA

BOVESPA:AMER3

Q2-2025 Earnings Call

[Operator]

Good morning, everyone, and thank you for standing by. Americanas S.A. earnings call to discuss the company's results for the first half of 2025. Before we get started, I'd like to highlight that we have simultaneous interpretation available on the platform. [Operator Instructions] Please note that this video conference is being recorded and will be available on the company's Investor Relations website, ri.amicanas.io where you can also find the full earnings release. Presentation, both Portuguese and English is also available for download on [Operator Instructions].

We remind you that the information presented today as well as any forward-looking statements that may be made during this call regarding the company's business outlook projections and operational financial targets are based on the beliefs and assumptions of Americanas' management and on information currently available.

Forward-looking statements are not guarantee of performance as they involve risks, uncertainties and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions and other operating factors may affect Americanas' future performance and lead to results that differ materially from those expressed in forward-looking statements.

Today, we have the following company's executives, Leonardo Coelho, CEO; Camille Faria, CFO and Investor Relations Officer; and Fernando Soares, COO I'll now hand the floor over to CEO to start the presentation. Mr. Leonardo Coelho, please go ahead.

[Leonardo Coelho, executive]

Thank you. Good morning, everyone. I'd like to start by thanking all our clients for one more quarter yet another quarter you that dropped by at Americanas with us. I'd like to thank everyone that participated in one more quarter that we delivered within the deadline, in particular, the stores team, CD, distribution center and logistics that are everybody united and committed to recovery of Americanas and also our partners that are were paramount to value to us. The year of 2025 continues to demand discipline from us in the management because of the challenging macroeconomic environment in Brazil and in the world. And even so, Americanas continues to deliver consistent financial and operational results, showing sequential improvement quarter-over-quarter from the execution of that strategic road map that we presented in 2024 that started in 2023, but was implemented in '24. And all the other initiatives of efficiency, operational and financial initiatives that were presented by the team and are ongoing.

Our second quarter 2025 results demonstrate our previously stated commitment quarter-over-quarter growth on a comparable basis and with one more quarter following that guide and considering the timing of Easter that will happen in the second half of the year with changes in comparable basis -- we're going to discuss this quarter in a sequential way for you to understand the effect and to show comparable basis in '25 over '24. As said, respecting the train of thought in a very honest to be able to compare.

Looking at the first half of '25, we surpassed historical figures for the Easter event. So our operation and financial efficiency strategy led to improved costs and expense management on the commercial strategy with a focus on higher-margin categories and more recently with like current products, recurring products we had, we expanded our gross margin in physical stores mainly. And another highlight that you see today, this presentation is the performance of the area that we call customers and partners platforms, the PCP.

It's the client intelligence and monetization of our stores that is one of the drivers for the business. And it's like mounting for more share our results, contributing more to our total results. In operation, disciplined execution of store footprint optimization sales area showing the first signs of contributing to higher gross revenue per square, Guided by our purpose of making lives of Brazilians easier.

We've been advancing steadily in improving store service, which has a direct relation to the identification and the knowledge of our customers and allow us in, I may say, to offer more intelligent and targeted promotions to over 50 million customers targeted at their needs regardless of the channel interact with us. As we have been the digital has now a different characteristic. It becomes an extension of our knowledge from the client with a value proposal centered in the omnichannel idea, especially the online to offline O2O and third-party sellers to enhance the experience. Thiago will show you later how we've been dealing with the channel to put that channel to work together with the physical stores.

Moving on to Slide #2, the agenda. All those movements that have been made boosted the semester financial results, which Camille will now present in detail. And afterwards, Thiago and Fernando Soares will talk to you to hear from the actual operating team -- they will bring you some more details on our main operational projects. Camille, floor is yours.

[Camille Faria, executive]

Thank you, Leonardo. Good morning, everyone. Thanks for participating here. Moving on to Slide #3. As we have mentioned before in our release and Leo talked to guarantee a better basis of comparison between the 2 quarters. As we said, -- last year, Easter was in March and this year was in April. So all the analysis and comments will be -- talk about the first half of the year as a whole.

So on Slide #3, we show the evolution of GMV for physical stores as well as same-store sales performance semester. And as you can see in the graph, the physical GMV has been steadily improving over time, demonstrating consistent stores sales growth, growth in the -- so between the first semester of '23 and the first semester of ' 25, the indicator grew by 21%, reflecting the effectiveness of our commercial strategies and the advances in store. Besides that in the first semester of '25, the same-store sales continued to show growth up to 2 digits, 11.8% in comparison to the same period last year, boosted by Easter's strong performance. We talked about that last quarter, and we're going to more color on that. That's the main event of semester. We posted approximately 16% growth in same-store sales in '25 to '24, along with an increase transaction volume.

The company also continued with the strategy of reducing exposure to electronics. And we talked about that in earnings calls to the lower margins, higher logistics challenges and a weaker alignment with our customer value. we believe that those results show the capacity of the company, the ability of the company to generate organic growth even in this more challenging macroeconomic scenario, reinforcing the effectiveness of our commercial strategies and the improvements in our store management, including better supply that reduced stockouts. We've been showing our products in better displays. We have a more suitable assortment and improving the service to our clients.

Moving on to Slide #4. Now let's recap the numbers of the Easter as we showed last quarter. This Easter, this year, we reached a new sales record for the event in Americanas. We reached over BRL 1.2 billion with a market share gains exceeding 50% of the retail segment according to data from Nielsen. And this Easter event accounted for around 17% of total company revenue for the semester, what emphasizes the importance of that to our results.

And we cannot fail to mention the Mother's Day with physical stores as the main sales channel for that event. and it showed a growth in both sales and units sold versus the same date, Mother's Day last year. And this event today, the highlights were home, the department home, personal hygiene, personal care, beauty that resonated well with customers in line with the trend of valuing promotional kits for the occasion. And we believe that these results underscore our efficient execution during the period despite a challenging macroeconomic environment for the sector.

Moving on to Slide #5. Let's talk about profit and gross margin. There are 2 graphs in this slide. Looking at the bottom graph, consolidated profit had a decrease of 14% versus first semester '24 with a gross margin of 28.7%, a decline of 5.2 percentage points for the same period last year. But this comparison in the graph below is impacted by extraordinary events that were recorded in the first 6 months of '24. And we mentioned that at the time that had a very positive effect on that margin.

And notably remark the BRL 300 million from the late supplier rebates and around BRL 85 million from tax-related events. If we exclude those one-off effects in '25 and '24, we go to the graph above, which we can show the consolidated gross profit margin pro forma without those extraordinary effects. Without that, they go up significantly, up 11.2% gross profit in absolute values and the margin goes up by 1.9 pp.

This result reflects the performance of the physical retail business, which is showing solid operational improvements and greater commercial discipline, capturing category management initiatives and we talked a lot about that, the establishment of a new store planogram developing smart assortments to each store, each location. And we implemented some pricing levers that were smarter and the increase [indiscernible] in sales also contribute positively to our profitability throughout the time.

Moving to Slide #6. Now we're going to see our expenses in our EBITDA -- so in parallel with commercial efforts that we have mentioned in the slides, the company continues its work on cost and expense management and some initiatives on operational efficiency that combined with the gross profit increase shown on the previous slide shows like continuous improvement compared -- so led to a significant rise in adjusted EBITDA for the first half '24. So alongside our commercial efforts, excluding depreciation and amortization, it totaled BRL 2 billion in the first 6 months of '25, a reduction of 4% compared to the same period of after sequential reductions in previous year.

And beyond this absolute reduction, we also had dilution of those expenses as a percentage of our revenue, representing 9.7% in net revenue, a reduction of 1.8% in relation to the same period of last year. And it's the first time since the beginning of our crisis that our indicator is below 30% reflects our continuous improvement and all the efforts of the company to efficiency in all the lines of this G&A.

So in the bottom chart, we show the adjusted EBITDA, and I'd like to remind you the concept of EBITDA adjusted. It's the one that we exclude all the effects, all the positive or negative effects of impairment assets, haircuts by the judicial reorganization. Everything is in a different calculation. So in those graphs, we present the adjusted EBITDA ex IFRS that is after payment for the rent.

So the adjusted EBITDA for the first half of '25 was BRL 339 million positive compared to BRL 268 million last year. It also reflects a positive impact of BRL 160 million in tax settlement agreements that we had some agreements and roughly BRL 100 million from late ICMs excess credits and other tax-related during the period. And in the first semester of '24, the adjusted EBITDA was also positively impacted by operational extraordinary events, more than 25 as we show you.

And those effects included the recovery of BRL 300 million, as I mentioned before, and tax related around BRL 160 million. So if we exclude all those extraordinary effects, pro forma adjusted EBITDA would have improved by BRL 231 million in the first half of '25 compared to the same period last year. Adjusted EBITDA after the payment of rent ex IFRS 16 showed improvement in the period going from negative BRL 237 million in the first half to negative BRL 170 million in the first half of '25, improvement of BRL 67 million.

And again, if we exclude the extraordinary events, the improvement would have been BRL 257 million semester over semester, highlighting our progress and driven mainly by better event execution, optimization of expenses as we show in the chart of SG&A and our ongoing efficiency program. And to illustrate this progress a little more clearly, we're going to remember our recovery log since '23 to show some key financial indicators and our continued the first chart on the left, you can see the same-store sales that show growth consistently over time, up 14.5% in the first half of '24 1.5% in the first semester of '24 in comparison to '23, showing evolution and then maintaining strong growth of nearly 12% in the first semester of '25 compared to '24.

Pro forma gross margin, that's the one that excludes the effects of late supply rebates and temporary tax events also continues to expand. You can see on the right graph that presented a 6.1 percentage points increase between the first half of '23 and the first semester of '25, showing almost 30%. So beyond that, the optimization efforts on cost and expense that resulted in a nominal reduction of 31% in SG&A amortization from first semester '23 to first semester '25. So we were down 31%, and we significantly reduced the percentage of net revenue in the period of that revenue going 12.2 percentage.

So the adjusted EBITDA ex IFRS 16 has shown a steady upward trend from negative BRL 1.7 billion in first half '23 to negative BRL 17 million in the first semester of '25. So BRL 1.5 billion is an improvement almost. And all those movements reinforce our path of consistent and sustainable growth and something that I failed to mention very quickly talking about EBITDA. Previous slide at this first semester for the first time, we had at this first -- as the second quarter of '25, a positive EBITDA. There are 2 main points here, seasonality Easter improves a lot the semester. Sometimes we have some events as agreement with BMF, but it's worth mentioning that a positive impact since 2023.

Moving on to Slide #8. So let's talk a little bit about capital structure. Nothing new here in relation to the quarters. We finished the first semester of '25 with a gross debt of around BRL 1.9 billion that is essentially our debentures that were issued as part of the judicial recovery plan plus BRL 54 million in short- and long-term loans from our subsidiary, [indiscernible].

And below, just to highlight, our debentures have maturities like 4 to 5 years and a 2-year interest grace period starting July 2024. So we start paying interest in the third quarter of '26, as you can see at the bottom section of the slide. And the company's total liquidity reached BRL 2 billion at the end of the semester, consisting of BRL 775 million in cash and equivalents and BRL 1.2 billion in credit card receivables. So this way, in June 30, '25, our cash and equivalent was credit card receivables exceeded our financial debt by BRL 103 million. So instead of that, we had cash of BRL 103 million.

In addition, just to be intellectually honest, we consider the financial debt of the company, all the liabilities remaining from the judicial recovery that is essentially that settlement with suppliers. Just a small percentage of our creditors were not paid and we divided. So when we present at present value, those debt are registered at BRL 459 million. They are recorded under suppliers -- but here, we talk about that because they are not may pay, but there are also some obligations to creditors who opted for restriction option 1, general payment, which at present value closed the period at around BRL 16 million recorded other long-term liabilities in our statements. So considering the remaining liabilities from the judicial recovery plan, the net debt is approximately BRL 372 million at the end of this semester.

So moving on to Slide #9. Let's look at cash flow. On this slide, we show the position of cash and equivalents plus credit card receivables between December 31, '24 to June 30, '25. We ended '24 with a combined balance of cash equivalents, marketable securities and credit card receivables totaling BRL 3 billion. By the end of June '25, this stood at BRL 2.1 billion. We include in this balance cash equivalents and marketable securities from AMI, which are not consolidated in Americanas cash position and they recorded other assets associated with held for sale in our state.

As we said last earnings call, due to typical seasonality of retail, the liquidity levels in December tend to be higher because they reflect the concentration of our sales in the fourth quarter and include events such as Black Friday and Christmas. So we finished the year with lots of cash and receivables because we have just finished Black Friday and Christmas.

The second bar on the chart represents adjusted net income for noncash effects BRL 327 million and was positively impacted by the tax settlements, federal tax settlement agreements reached in the second half -- the second quarter of '25 to reduce the company's tax liability by join them programs offered by state and federal government. The third bar, it's important to explain that to you. The negative BRL 688 million shows the variation in working capital and it is caused by seasonal effects inherent to the business dynamics since the fourth quarter is when we have major high sales events like Black Friday and Christmas. And in those moments, those events, we have better term negotiations for payments [indiscernible].

We finished the year in general with a lot of balance in cash and receivables and with accounts payable because we have higher terms with our suppliers to pay. And so -- we have a low inventory balance and accounts payable, very, very high as well. And what we have to do is to resupply the inventory, pay all the vendors and then we normalize our working capital.

The fourth bar represents lease payment variations totaling BRL 479 million that are not reflected in adjusted net income due to the IFRS 16 accounting rules. And those are the financial highlights for the semester.

With that, I give the floor to [indiscernible], our VP of Clients customers and partners that will give you some updates on projects in the area.

[Unknown Executive]

Thank you, Camille. Thank you, Leo. So I'll tell you a little -- those are the 4 pillars, the 4 strategic pillars that we've been working in the last months, focusing on the first pillar zooming in. Why is it called a passion for the customer. It's because we're building a company center focused on the customers. So we've been advancing 3 major initiatives to transform our relationship with customers. The first one is the loyalty program. It's called client A under development and will be launched in the fourth quarter of '25. It will be the central link between our channels, offering personalized benefits and encouraging currency.

The second lever here is CRM, our CRM platform. to turn data into intelligence, enabling increasingly relevant and offers. So we want hyper person. That's what we aim at. And we have been improving a lot towards that.

The third lever here is financial services, and we've been designing and implementing solutions cards, insurance, credit to boost profitability and create additional value across all the channels. It had been explored in a latent way, but we've been accelerating that and the launch of the card recently shows us in our numbers.

So moving to more detail. Please go to Slide #11. So we've been changing our operational model between the structures of the business. Historically, our 3 business units stores, e-commerce and the platform of services and part they used to operate separately, each focused exclusively in its -- on its own results.

Now we've entered a new phase with the customer at the center of all decisions. I'm talking about the second semester of '25. While this may sound a little obvious today, it was not like that here inside the company, and it represents a deep transformation in our modus of Rani, integrated teams, unified data, aligned metrics and coordinated investments. All of that focused on the same goal

Moving to the next slide, summarize that here, we're basically building an integrated ecosystem. So our 3 business fronts now operate as a single ecosystem where each customer touch point strengthens the relationship with the client and enhances profitability. So how can we operate that with an integrated multichannel traffic generation with a coordinated customer acquisition with performance media support to expand reach. And we've been working a lot on our traffic monetization, offering noncore, core, like insurance, card credit at the right moment and through the right channel, maximizing value for both the customer company. loyalty, as I've said before, the program client A will connect every channel offering benefits and driving quality engagement in every interaction to repeat sales, repeat purchase. And CRM as an intelligence driver data and personalization platform, delivering hyper relevant offers exactly right time for each customer profile. And now I'll hand it over back to Fernando, our COO Actually, I'll give the floor to Fernando Soares, our COO, to comment on improvement, our physical operations.

[Fernando Dias Soares, executive]

Thank you, Thiago. Good morning, everyone. It's been a long time that we've been talking about the store as agonist, the lead character of our strategy of our business. So this pillar is called better store. Best store, it tries to balance best service for the client and efficiency -- operational efficiency. And those are words that used a lot slides. So moving on to the next slide, please. So I'd like to start at the right side of the slide that shows the purpose that we designed in the operation of the store.

So our purpose is to be a Class A operator, a reference store operation. And the first part of the strategy is to have the client in the center, the customer in the center, the right assortment, the right price and a very, very polite service. So we've been investing a lot in like more associate presence in the stores, guiding our customers. The second pillar is like more attractive and efficient store with optimized sales areas with patterns like standardization and planogram and our associate our operators as owners and having the sense this perspective of owners and understanding the variables in the store with a bigger sense of responsibility.

And I'd like to highlight some indicators that are part of the individual target of the teams, for example, or even the control of cost in store. And we have superior results and reduction of this strategic basket that we brought operations brought an increase of 14% for sales per square meter and a reduction of our operating cost in 's very, very important. And the levers that we use are on the left.

So we reduced like brakes with new process control in stores, a new plan in stores and some products and the reduction in cost, power costs. So we've been controlling stores expenditure. And we are closing some stores that are and we are optimizing the areas and we reduced the cost of occupation and energy and inventory. So with the project calorie which we divide our stores with some partners, strategic partners. And of course, we are renegotiating the rental agreements, taking into consideration locations and potential for the stores.

The fourth pillar is the productivity of our team. We reduced turnover, and we increased the productivity of our associated store in almost 19%. And I'd like to highlight the over 1,000 sales campaigns, and we -- we are trying to energize our team. It's like talking to the customer every day. We have some logistics initiatives here, optimizing the shipping and increasing the productivity of our distribution centers. So we have a very high discipline in operational costs and stores are involved with that. Team is directed to deliver 2 things at the same time.

With that, I can give the floor back to Lee.

[Leonardo Coelho, executive]

Thank you, Fernando. Well, that was what we wanted to show you. And I think we can move on to the Q&A session.

[Operator]

Now we are going to start the Q&A [Operator Instructions] -- our first question comes from , investor. brought the following question.

[Unknown Analyst]

How is the judicial [indiscernible]

[Camille Faria, executive]

Thank you, William, for the question. Well, the judicial recovery has been executed essentially in 2024. So we refinanced, reprofiled our debt we changed our credit report from BRL 4 billion -- BRL 42 billion, I'm sorry, to this debenture of BRL 1.8 billion that we showed you at the presentation BRL 475 million with liabilities with other suppliers within the plan recovery and we executed everything at the end of '24. And today, we live normal life. Of course, we are under the seal of the company under judicial recovery. We live a regular life with respect obligations, but 99% focus on the operational recovery. The judicial recovery and reorganization is just a bureaucratic issue that we have to be accountable for and creditors, but we wait anxiously looking forward to finishing this chapter of our history, but we finished everything basically.

[Operator]

Our next question comes [indiscernible] from investor.

[Unknown Analyst]

He said Americana might become market chain.

[Leonardo Coelho, executive]

Thank you, Angelo. I will take that later. The most direct answer we can say is no. We have a journey that serves other necessities of our clients like joyful moments indulging in middle class and P&C that go to our stores. So we don't have a location for -- and part of our mix is also present in supermarkets, but the value proposition is very different. And I think that some of our journeys can be incidentally equal to markets, but we have main points services categories and the discovery of items that are Americanas, and we are going to keep doing that in our stores.

[Operator]

Our next question comes from [indiscernible].

[Unknown Analyst]

Is there a plan to seek or implement a basket of exclusive proprietary products?

[Leonardo Coelho, executive]

If I understood you correctly, you're talking about proprietary brands, right? If it's that, we have lots of exclusive brands that are for water basic plus for some other different categories. So we have that today. Of course, there is a strategy and as we evolve our improvement journey of operational improvement journey in our stores with more optimized displays. And we have this planning to show our exclusive brands, make them stronger in our stores and aligning them with client A strategy strengthening our proprietary brands.

But today, even Americanas having its own brands, almost 30 proprietary brands that are sold in our stores, we are still using lead brands in their segments, and we're going to keep doing that, keep following that strategy.

[Operator]

Our next question comes from Guilherme investor.

[Unknown Analyst]

And he brought 2 questions. In relation to the current portfolio, is there a big proportion of stores in exit? What are the other criteria used to close those stores? Talking about HNT, Americanas expect higher proposals face more challenging scenarios.

[Leonardo Coelho, executive]

Yes, there are stores as every retail, but it was significantly reduced since last year for 6 months of this year. The criteria we have is to put all of them in the same cluster, compare them with similar stores and act on each lever of renegotiating agreements with the number of headcount in stores, margins. We look at those stores and compare to similar store and act on the levers to try to that store in a different cluster with more profitability. We've been reviewing that weekly, and we've been improving a lot -- if I might just emphasize what Fernando said that I think it's very important. We have today a store portfolio that is in majority made by healthy stores, but hasn't always been like that.

The portfolio that has been developed by Fernando and the team since the second semester of '24, it has been able to recover the efficiency and result generation of many -- most of the stores. But we still have a very pragmatic approach to sit down, try and understand what we can do internally to improve the stores, discuss with stakeholders that are very important like the landlords to try and make those stores profitable and attractive. And in such cases that -- in which we cannot do that, as Fernando said in the presentation, we are going to close the stores. That's simple like that.

We have a plan of opening new stores, and I have mentioned in the last calls. At this moment, this plan is a little suspended because of macroeconomic challenges and uncertainties, but not necessarily related to company's financials. It's an internal decision. Even the unstable scenario, we can postpone that project of opening new stores. In summary, we are as any normal retail, we're going to open or close stores depending on performance, quality –

[Camille Faria, executive]

So I'm going to take this opportunity if you allow me to merge with the next question about the sale of HNT and how that sale can impact Americanas. The first question. I can see that. So I can see the question. So let me talk about that. Yesterday, we released to the market the statement that we are trying to sell HNT because it's part of the judicial recovery plan. It's not a surprise to anybody. We guide this bidding process M&A processes are very long.

We don't want to be pressed by time. So we resumed the process. So in relation to the expectation of proposals, we believe we have a very valuable asset. It's a local brand in that's very important in Sao Paulo, too. So it's an operation that might be attractive to many different clients, but we also understand that this scenario is challenging, a macro scenario. Of course, it affects and food industry has appreciated in the last 2 years. So we understand the challenges. We don't have an expectation.

We are looking at that very realistically. We know the quality of our assets, but we understand the scenario, but we believe in the quality of our assets to attract buyers. So that sale can impact Americanas. That will impact positively once the plan says that the resources from those sales will be used mandatorily to settle that. So of course, it will impact positively since every resource will be from that, we reduced the negotiation of the judicial recovery plan, this asset was one of the negotiated with investors because when we restructured the company, we said that our core business in Americanas that complements with digital channels and shows value to the customers of Americanas.

This is our core. This is what we want to focus 100%. And we believe that is not part of that core business anymore. So we don't see synergy so strategically, we believe that the best solution here is to monetize this asset. And if we receive a good proposal that is aligned to the value that we believe the asset has, of course, we're going to use that to leverage our operation.

[Operator]

We received a question from investor. How is the work in reapproaching investors for the company?

[Camille Faria, executive]

Okay. I'll take this one, Bernardo. We've been gradually -- in summary, we pass through a period in which the company has been by investor because at the beginning of the crisis recovery many hopes and speculations the role of that is in the hands of trade events. And we've been seeing that the consistent evolution of our results has reawakened the curiosity and interest of institutional investors in relation. We can see that investor exposing itself invest. Quarter-over-quarter, this relation will change because we've been presenting improvement. So it's step by step, but we believe that gradually the results we've been presenting with consistency over the next quarters, it's going to increase this interest.

[Operator]

Our next question comes from [indiscernible]

[Unknown Analyst]

How is the Gallery project? How is it going? How many stores have been implemented? And what's your prediction for '25? Is it going to be implemented at Americanas Express as well?

[Leonardo Coelho, executive]

Project Gallery has been implemented. We have in stores almost 10% of our basis with 3 partners in operation. And we have a decision criteria for like the partners that enter there that adds value to our stores. So we've been having lots of success in smartphone financial services. So it makes sense for our customers. So as I said, we have 3 partners operating with a pipeline of 3 to 4 new partners that might join us at the end of the year. The idea is, okay, let's move on from pilot to a business platform for next year.

[Operator]

Our next question comes from investor [indiscernible] focus on chocolates, and sweet. Is it a strategy that pays off in the long term? Because I'd like to see Americanas exploring other categories like electro and house appliances.

[Leonardo Coelho, executive]

Thank you for your question, Leonardo. Let's divide that in 3 parts. and is related to the indulgent journey that we mentioned earlier. And we believe that it's part of Americanas attracts people and traffic. It's a strong category, and we are doing. We talk about portable appliances. And this is a category that has been growing inside during the last week, we had sales relevant sales for coffee makers, coffee machines.

And just to give you some numbers, iron, we saw about last week about everything we sold last year as a whole. So it shows that the relationship with the local suppliers has been reinforced and we've been able to build together some marketing campaigns and sales to make our stores attractive and it aligns with this long-term plan. So all the other categories like beauty, personal care, hygiene all those cleaning that's the category that has been showing steady growth. So we want a store that shows products that satisfy those journeys that we can find and we presented in the latest releases in the last releases. In relation to household appliances products.

Traditionally, Americanas was not seen as a good strong seller of household appliance, especially white lines and screen mainly. We didn't have and we don't have a clear value proposal categories since those products are multiple, sell that in our digital channel. So the logistics are very complex. The risk of damage in stores is very big, very high. So we don't see that category on the long term.

[Fernando Dias Soares, executive]

I'd like to take the opportunity to say that this category is a fortress of ours. categories, we are leaders of the market. So it's very important to work on that with the industry, talk about new products, display. Why is that so important to us? Because we've talked very quickly about the layout of our stores. So our stores are being built and optimized see that category in the middle of the stores. So the client will go there and see what we've been doing with clean and affordable household, beauty and hygiene, that's a new assortment. But this category helps a lot with the stores, but there's a second here that the role we have in like fining categories in our customer project. So if our client is well served with chocolate can be stimulated to interact with everything that we've been showing in our stores. So I think it's the beginning of a journey that passes through that fortress, that category that I call fortress that will bring good ahead.

[Operator]

We received the following question from investor Leon. The physical commerce, the retail brick-and-mortar had expressive growth in the third quarter of '24, while e-commerce reduced almost 50%. How to balance revert that fall in digital and channels in '25?

[Leonardo Coelho, executive]

It was a very good question, Leandro. I'll try to be pragmatic here. You're looking at Americanas thinking about a big marketplace with big, many sellers as we had before. That design, that model as a big marketplace with many sellers competing with each other and with all the other players in the segment in Brazil. That strategy was abandoned and communicated in a very clear way. We changed the location of our digital.

Thiago showed a little the evolution of that and showing the structure, the whole structure centered on the client and the customer in an agnostic way see the channel. So we changed the design of this digital channel to make it work on our fortresses as perceived by our customers, which are those strong points, store capillarity, the variety of our assortment. So I want the digital to use the physical store as a basis for its service. I'm talking about ship from store and takeout at store. So this is our digital location.

The digital as a big marketplace with hundreds of thousands of sellers generated a loss for that company. In general, it was anchored in a value proposition that was a multi comparable products with like a very reduced margin sold with low interest, free shipping and cash back. So we were paying for the client to buy from us. So we redesigned that and we changed the perspective of the digital.

From a perspective of sales, it's, of course, way than the old marketplace. But on the other hand, when we consider results and value generation for Americanas and for its shareholder, the digital that we've been building is infinitely more profitable than the other one we had. I hope I have answered your question. If I didn't, please complement that. But I thought that was my answer.

[Operator]

The Q&A session has now concluded. So I'd like to give the floor back to the final remarks of the company. Okay. Let's go.

[Leonardo Coelho, executive]

As we could see in the answers here in the presentations of Camille in my presentation, Fernando and Thiago, we continue in a growth and sustainable trajectory and we want to keep this rhythm focusing on the core structure of our business such as sales operation agility and quality, the use of artificial intelligence technologies and improve our enforce the company and mainly the efficiency in cash generation and cash management without excluding any opportunity to expand our assortment and add new services as project.

So we've been distant from the restructuring phase of Americanas and more focused on structuring projects to generate value for strong retail as Americanas is. So in parallel, we've been identifying opportunities beyond our core business and recognizing, as I mentioned before, that our nationwide footprint is a major advantage for any transformational move that we focused on profitability and sustainable growth. And recalling what we talked about last quarter, the picture of the result we presented is just one frame in the film that tells in a very responsible and careful way.

Camille and I have been very careful when we compare with previous quarters, and we are trying to be cautious disclosing the strategies, but very, very fast in implementing them. But in a careful way, respecting the history of Americanas, which will soon celebrate its 96th anniversary in Brazilian retail. We remain committed to our purpose of making people's lives easier, expanding access to products and services, doing business with long-time partners as well as new partners in e-commerce that see value in Americanas in nationwide.

And we are still generating a very positive impact through thousands of jobs, especially in stores and distribution centers. And we have this characteristic and being the first employer forming quality personnel and in a company that develops its team in the continuous way. It's a main focus of our team to keep developing our team members. That is the true driving force behind the transformation we are leading and we would like to thank them. So this is my final remarks. Thank you, everyone. Americanas.

[Operator]

Earnings call for the first half of '25 has now concluded. Thank you for participating, and have a very good afternoon.