Good afternoon and welcome to our earnings call to discuss the results of the fourth quarter of 2025 and the fiscal year 2025 as a whole. Before I start my presentation, I would like to cover a very direct perspective.

Two years ago, when we started our transformation plan, many would question the viability of the Casas Bahia. Today, with R$3.8 billion less debt and a leverage level of 0.4 times EBITDA over debt, nine quarters in a row with operational improvements, this situation is behind us.

The moment of just survival is behind us. The fourth quarter of 2025, as you will see throughout this presentation, we delivered a record GMV of over R$13 billion, an 8% growth.

Our online channel accelerated more than 20%, driven by our 1P strategy and the opening of new channels just like the partnership with Mercado Livre. At the same time, we are gaining share in our core categories, where the right pricing positioning yielding more than 3.8% in market share in television, more than 3.8% points in appliances, and a gain of share in all our core categories.

Our adjusted EBITDA grew 38.1%, leading to R$1.8 billion in operational cash flow in the company in the fourth quarter. Again, it's important to make a note here.

I know you noticed that EBITDA was below the market expectations. We gave you full disclosure of non-recurring events, and I want to be transparent.

Our gross margin reflected a stronger growth in the online channel, which brings a different margin structure. This is a conscious strategic decision by the company.

We are building scale in our digital channel that, combined with Casas Bahia Ads, Marketplace, 3P, and financial services, our online carnê will yield a higher value generation to shareholders than using the physical store margin in the short term. Our credit continues to be solid even in this challenging scenario.

We're going to see the best level in two years, and the portfolio grew 7% with record production in 2025, more than R$10 billion in clean credit, where our proprietary credit model that is very advanced, and a stable default level. Each one of our more than 1,000 stores is a logistics hub, which is certainly a differentiator for our online channel.

They're also experience stores and a credit store. These assets, our digital competitors cannot replicate.

We will be a relevant partner for every digital player that wishes to gain national scale in the country. The message I have for you is simple before we start our presentation.

We delivered what we promised in terms of capital structure and operational discipline. Now, with this solid foundation, we have as a priority to transform this improvement into positive net income.

We are sure about the path. We have identified the lever, and the execution is ongoing.

At every quarter, you'll be able to see consistency in execution generating results. Next slide, please.

Now, I would like to cover two important milestones for 2025. The first being the consistency in execution, a robust execution that reinforces the power of this brand and our competitive advantages, commercial scale, logistic infrastructure, and our credit solutions that allow for this company to deliver consistent results at every quarter.

The second one, a transformational one, has to do with the structural reduction of our debt level. Two great plays in 2025, one in the third quarter in August when we did our first debt conversion, and the second one in the market that was concluded on December 31st.

We achieved a reduction of more than R$3.8 billion in our net debt, which gives us cash outflows over R$7.7 billion over the next five years, which is transformational for the company and will certainly unlock improvement in different operational activities, including our negotiation, giving us more flexibility for promotional actions and for operational strategies. Next slide, please, we go over the highlights of the fourth quarter.

These are very relevant highlights. We've already mentioned this, but to reinforce our record GMV of R$13 billion, 100% from the core, focusing on our main categories and much better results we had twice with the core, with a better margin, growing EBITDA, and a generation of operational cash flow that is stronger, R$1.8 billion in the quarter, with a liquidity balance also evolving to R$3.4 billion.

We had the beginning of the partnership with Mercado Livre, which has been contributing with great lessons for us, encouraging. We are getting traffic of customers to see our brand in Mercado Livre and migrating to our app and website.

We gained total market share, 0.6% in total market, which is relevant, and in the categories, more than 3% points. The reduction of our debt level was transforming, reduction of our leverage was transforming, and the growth of our credit portfolio with a stable default level reinforced our discipline.

Now let's take a closer look at GMV in each channel. Physical stores, same-store sales of 2.6% in the quarter.

We have to remember two points. The fourth quarter of 2024, it was a strong comparison base.

We had growth of 16% in same-store sales at that time, which certainly impacts the fourth quarter of 2025. When we have a challenging macroeconomic scenario with higher default level at families, this put pressure at the base of the pyramid, which tends to go to physical stores, and that has an impact in sales.

Our discipline in credit also delays the growth in sales in physical stores. We believe that physical stores will start to present a more robust growth once we see an improvement in the macroeconomic scenario.

We're not going to grow at any cost. We have a commitment with the bottom line, with profitability in our stores.

On the online channel, with 25% growth, and I would like to highlight that for five quarters in a row we have been presenting growth in our online channel. Mercado Livre started in November 2025, but it represents less than 5% of the total company's GMV, we're growing in every channel, which is also our operational leverage.

We'll be start talking about the cash margin that percentage margin is lower, but it certainly contributes to the operational leverage of the company, distribution of fixed costs, and the better generation for shareholders. 3P, very strong, which reflects our audience.

We are destination store for the purchase of appliances, technology, furniture. Here we grew a lot in the fourth quarter of 2025 as well.

Casas Bahia becoming an important channel for the full industry of appliances, with an additional assortment to our core. With specialized players, we need to offer all models for the categories.

The models that generate a return as 1P, we acquire, and the models that we're still uncertain about the return, we choose as 3P strategies. When we reach a certain volume metric, we then transform it in a 1P model.

Now let's go to the next slide to discuss our main business to generating value in the company, our credit, our Buy Now Pay Later, our carnê. R$6.6 billion in our portfolio, generating R$10 billion in 2025, a milestone that's also very important.

Just a few years ago, we were producing R$300 million a month, and now we are at R$900 million a month, some months going over R$1 billion. A very powerful growth even with all the discipline in granting credit, keeping default levels below 9%, line we have committed to, with a controlled [PDD?]

, quarterly loss under control, and growing production. Obviously, an improvement in the macroeconomic scenario will allow us to open this tap a little bit further and generate more growth to physical stores through our credit product and in the online channel.

Over the quarter, we reinforced our online credit structure, which gives us even a bigger addressable market with the similar profitability of the physical stores. We do see huge potential to keep on growing credit.

Now, on the next slide, I just want to reinforce the company's capabilities, how robust our mathematical models are when it comes to granting credit to consumers. Look at default level, looking at the blue line, 8.6% indicator over 90, comparing the same indicator with similar products.

The red line is the total market of over-the-counter credit, which had improved a lot from the first quarter 2024 to the first quarter 2025, and now we have reached 17.2% in our level, it remains stable. Credit card installments also 300 basis points worse, in our term remains stable.

Showing that yes, there is a demand for credit, but we are not going to accelerate this process till we are comfortable that we're growing this keeping the right default level without running to unnecessary risks. Now, with a better capital structure, we're going to keep this discipline, we keep improving with consistency in the long term, quarter after quarter, without looking for a major leap overnight.

Now, I hand the floor to Elcio on the next slide, we can discuss the relevant transformation in our capital structure. Elcio, please.

Thank you, Renato, and good afternoon, everyone. Thank you for coming.

Many positive highlights in this quarter as we've just heard, but without a doubt, the most relevant one being the decisive step in the transformation of our capital structure. Different from previous quarters, I would like to start with this topic specifically.

Starting in August '23, when we launched our transformation plan, we have seen that the capital structure has become a key point in our management. Since then, we have gone through several evolutions as we have evolved our operational performance.

Over the last two years, we have had several examples of advancements in our debt profile, the most relevant one being the one we concluded in December 31st last year with the renegotiation of the terms, the issue of debentures. Let's go to the next slide.

This is the most relevant picture of all. Renato gave you some details, but our operations in December, combined with the first conversion of R$1.6 billion done in August, truly transformed structurally our balance.

In the second half, we reduced our net debt from R$4.95 billion to R$1.13 billion, meaning a R$3.8 billion reduction or 77% of the total in just half a year. In terms of financial leverage, we end the year with 0.4 times compared with 1.9 in the third quarter 2025 and 2.2 times in the second quarter of 2025, meaning a much more comfortable level, very different from the situation we had in the recent past.

Another data to help us understand the size and magnitude of this transformation, R$7.7 billion in savings in cash over the next five years of the two, actually from the tenth issue we did. I just wanted to record our thank you to all stakeholders who have contributed for this transformation to be possible, especially to our debenture holders who participated in the operations throughout the year, but also to the banks, credit insurers, shareholders, vendors, and customers who have trusted and continued to trust us.

Let's go to the next slide, now. Here we see our amortization schedule for financial debt on the left side, the previous schedule, and on the right-hand side, the new schedule after the transformation.

The transformation between the two graphs is quite visible. I just want to clarify that for 2026, R$146 million that we see here have already been liquidated.

We don't have any relevant debt, financial debt, to expire in the next five years, which brings us another perception, and it is another structural change in the company versus what we previously had. This transformation has hit many different dimensions that we would like to share with you, because certainly they will impact the operational benefits that Renato mentioned.

When we talk about R$7.7 billion of savings, cash savings, in the next five years, these are the direct impacts coming from this operation. On the next slide, it becomes clear that there will be other benefits with this new balance.

For example, we have already renegotiated a reduction of almost 4 percentage points in most of the funding lines for our credit. These are benefits that come forth from this transformed balance profile.

The idea is to reduce even more financial waste in the company from now on, with a lower risk, obviously. We are already see this impact even before the announcement of this new balance.

Watching this structures, we already see the capture of this benefit at a lower cost considering the risk level we have. We also announced to the market the migration of R$1.4 billion from short-term revolving lines for a two-year term line.

With that, we reduce the risk of short-term refinancing, bringing predictability and stability for the financial management of the company. Just from this operation, we have a pro forma.

It is still not fully executed, and it's not part of the fourth quarter, of course, but a short-term debt level that drops from 59 to 28%. In absolute terms, this short-term debt is now R$1.2 billion, comparing with a liquidity of R$3.4 billion we have presented.

Lastly, this improvement in our capital structure is not a conclusion, actually, because this is a continuous process, and now we start a new moment with focus on other areas to keep reducing financial waste and providing different structures so this balance becomes even more robust. We have gone through a very formal stage, and we are starting another one, the stage of optimization, flexibilization, we can gain even more cash with a more flexible balance.

We've mentioned this before. We do that, consumer financing business, quite well, but we are have other fronts in terms of suppliers that we can also monetize our ecosystem.

Now, let's talk about the second chapter of our results. Perhaps one more slide.

In parallel to this transformation in the balance, we are delivering our ninth quarter in a row with margin expansion. On the left-hand side, we can see revenue numbers, and we like to show you this slide because it clearly shows the evolution quarter after quarter.

I'm not going to repeat what Renato already mentioned, we saw an expansion in revenue with record GMV in the fourth quarter. On the right-hand side, we see our gross profit of R$2.7 million and a gross margin of 31.5%.

A highlight is our SG&A. The lower left-hand corner has a percentage of revenue dropping 1.3 percentage points year-over-year, highlighting the operational leverage and the discipline in expenses.

Despite the growth in revenue and the inflation of more than 4% in the period, operational expenses in nominal values have remained stable, and this is a challenge we have posed for this organization recurrently, how we can capture deficiencies because they're still many to be captured. This is a slow, gradual process, going down to the details of every process.

Our adjusted EBITDA has reached R$826 million with a 29% growth versus the previous year, and it's important to mention many of you actually highlighted the positive impact here. At the same time, we have this migration online with slightly slower margins, but we'll keep advancing that as we evolve credit and services here as well.

Next slide. Here we can see the comparison, the annual comparison from our results.

The same idea applies. We see this consistency in growth with our gross margin a little bit above 30% and a very well disciplined SG&A, which is converting operational leverage into our adjusted EBITDA, with a year-over-year expansion of 1.6 percentage points.

I just would like to highlight our net loss in our adjusted net loss when it comes to income taxes. We suffered a negative effect of R$1.45 billion when it comes to differed.

Every year we do studies on the balance of our income tax, how over time, from future taxable incomes, we can use this fiscal credit over time. In our baseline scenario, the realization of this credits happen in an horizon under 10 years, very much in line with the term we had last year.

However, in the geopolitical landscape we have right now with a heightening of uncertainty, we have done some stress tests. In these simulations, we consider the macroeconomic premises that were more adverse.

In our business, when we think about macroeconomic premises such as interest rates and inflation, they impact not only financial expenses, but it comes all the way from the top line, impacting default levels, credit, and our net results. In a moment with growing interest rates, we have this financial impact on the business.

As we see this scenario with lower interest rates, we also reap all the benefits in all our business lines. Now, for this new scenario, considering the geopolitics of today, in a very conservative and cautious way, the company recognized a provisioning of 1.

[unclear] 04 billion. This adjustment doesn't have a cash effect, zero cash effect, pretty much changed the economic generation of the company.

In the future, as we evolve with our results and as the scenario becomes clearer, we could also reverse that provisioning as well. Net losses at the quarter was R$1.5 billion.

If we exclude this specific effect from the deferred income tax, that loss would be R$79 million, but we reported R$3 billion in the adjusted one, R$1.5 billion. Now for my final slide before we open for questions, last but not least, we had R$1.8 billion in the generation of free cash flow in the quarter, an increase over the last year.

In the actual results, R$2.2 million, the largest cash generation of the company in the past few years. On the right-hand side, we can see the trajectory and even the EBITDA numbers on the bottom just to show you that, little by little, we have this growing trend with a big focus on our management and our commitment to find efficiencies.

Capital allocation remains the same. I think we are past an important stage, and it was a requirement to get over that, we get to this second stage that Renato will now comment on.

We have gotten this far, and now we are working for a more recurrent profit profile with a very positive cash generation. Considering the size of this company, it's important to take a step-by-step approach when it comes to those changes.

Renato?

Thank you, Elcio. Next slide, please.

Another one. For the take-home messages, I just want to recap what happened in 2025.

2025 was a very intense year with a very challenging macroeconomic scenario, and also challenging in the microeconomic scenario in everything we needed to do in the company. It was a year with great deliverables when we look at the transformation in our capital structure that Elcio mentioned, combined with a record GMV level, growth in EBITDA, growth in credit, with default levels under control, and operational cash, and the full transformation in capital structure again.

This was truly a year that made us certain about our ability to execute. By the way, I would like to thank our team and all the stakeholders for supporting this journey.

Next slide, please. Now I want to focus on what's to come when we look at 2026.

What can we expect to deliver? First, I'll say it again.

We delivered everything we promised in terms of operational discipline and transformation of our capital structure. We proven to have a strong execution, and now we have a solid foundation, and our priority is to convert all these improvements into a positive net income.

Once again, we have clarity on the goal. We have clarity on the path, on the levers necessary to get there.

There are many levers. We have a large two-year program that we call [unclear] that will transform this company, but in a simple way of this slide, we have three main levers.

First, improving our financial results with a reduction of financial expenses. We have already transformed our balance, and now we are working to reduce our spreads, increase our credit limits, which is a very positive for our stakeholders, that will lower our CAPEX, monetizing assets.

There have been assets that did not have advantageous monetization for the company, and we are changing that, increasing with suppliers. This is already happening, more suppliers, which allows us to have a more favorable negotiation.

We have more players fighting for the same market, optimizing the stock turn, and the drop in the interest rate, which has a direct impact and it also has an indirect impact which is much greater than the direct one, contributing for the improved retail sales in our physical stores and the growth of our credit. The second pillar is connected to that growth, regardless of the macroeconomic scenario, we will capture operational leverage, which is translated in an expansion of our cash margin.

The cash margin that every sale will leave to the company. The percentage margin varies from channel to channel, but we will only sell with a positive contribution margin.

For nine quarters in a row, we have been delivering growth in our cash margin, in our EBITDA margin. The opportunities now in new partnerships with an increase in new partners.

Our share of e-commerce used to be in half of the store. It used to be 26, 27% of market share for our core categories in our physical stores, of course in some regions that could get 50, but others still have a lot of room to grow.

Online, we had 13, 14%. Our online market share will continue to grow.

We have a lot of operational leverage to capture those gains, with better scale, we have better negotiations, because as we sold more than planned and we grew sales and established new partnerships, this certainly improves our negotiation power with the industry to make the right adjustments for the new mix of sales in the online. It's not going to happen overnight, but we do see opportunities now with a better balance sheet, more credit, and more suppliers.

We promise the industry finally a better balance for our investments so the company's margin is protected even with a larger mix of sales happening online. Our third one, core to this company, what we wish we had done before, but now with the transformation of our balance sheet, now we have the right energy for management to focus on that, we will make great progresses in credit and services.

We have increased our portfolio to R$6.6 billion. We have adjusted our digital credit offer, but we still have a lot of opportunities of improving access, both in physical stores to increase share, as well as new leverages to bring new credit consumers toward physical stores, to our online ecosystem, to improve this whole journey that will certainly impact the conversion of this carnê, which is generating sales, profitability, and, as a consequence, contributing because there's a greater penetration of services, they can certainly contribute to more sales of services, insurance, and everything we are contributing to profitability.

These are the three main messages before questions: consistency in operational execution; the transformation of our capital structure, which is concluded; and our monetization of the ecosystem, we are preparing this to be the engine of the profitability for the company. Having said that, I would like to open for questions.

Gabriel, if you can help us organize the Q&A, and thank you again for joining us.

Good afternoon, everyone. Thank you, Renato.

Thank you, Elcio. Our first question comes from Pedro from XP.

Pedro, please.

Good afternoon, everyone, and thank you for the opportunity. Two important topics that I would like to cover.

First, it's clear that the online volume has grown a lot in the quarter. If possible, I would like for you to break down how much of that came from Mercado Livre.

I think it's less than 5% of the total GMV, but I also want to understand the economics behind that. Because initially, you mentioned that you'll be surprise on the gross margin, but that could be offset on SG&A.

Now that you have more visibility, almost five months of the partnership with Mercado Livre, do you have anything to share with us on that note? I think it will help us with margin projections for 2026.

You mentioned the levers. I imagine you're going to comment much about that in the near future.

On the other hand, considering the greater volume and in terms of capacity, what are the gaps that in your opinion still need to be addressed in terms of investment, any incremental investment for 2026 that you deem necessary, or is the company already ready to deal with this larger volume? I think these are the two questions I have.

Thank you.

Great. Thank you, Pedro, for your questions, and they are certainly essential to help us understand other pieces of this company and the profitability of our channels.

It took us a while to enter a relevant channel like this because we wanted to make sure we could have a contribution margin and that it would be generating. As mentioned before, the company's online channel and actually many channels, we have our proprietary channel, we have partnerships with other marketplaces, sidebands, loyalty programs, each of them with a different contribution margins.

Even in our proprietary channel, there are different sources of customer acquisition. We have our organic customers that bring a lot of profitability, customers via influencers, paid media, and etc.

Mercado Livre positions itself pretty much on the average of our digital channel, it's better than half of all the channels with a positive contribution margin. In terms of direct, this is direct sales via Mercado Livre, but there's also indirect effect because it brought a lot of visibility to the brand, and it generates an organic traffic to our website and app.

It's important to reinforce that all customers continue to have a direct relationship with the company, the billing, the delivery is done by us, post-sales is provided by us, it is a company customer that we can reach through different channels. This also brought us more information, of course, and created the opportunity for developing new channels because it certainly improves our ability to optimize the ecosystem we already have, and stock levels we are already available for the digital channel.

Now, going to your second question, I think there's a connection because we do see a lot of growth potential in our digital ecosystem as a whole. If you look at the agentic e-commerce launch in November, it also brought relevant additional growth.

Since week first, we achieved important results, for it having happened for three months with a consistent evolution, the average operation is above the average of our sales people. There, Mercado Livre and online and agentic are complementary to our sales team.

It's an additional channel, it's not a substitution, but it generates additional sales with a good margin of contribution. We don't see a need for massive investment in infrastructure.

We have idle capacity that allows us for this operational leverage, that's why we see the dilution of expenses. We can invest in technology, but at a level that we have already had.

When we look at the year's CAPEX, it's going to be similar to the levels we had the previous year. Again, with a focus on the digital journey, AI.

Some of them pay for themselves by high levels of productivity gains. Some levers brought 90% of productivity gain, for example, certainly improving efficiency of the company.

There are many others as well, other small, other bigger, but all with a very significant material gain.

I just would like to add, Renato, because you went quickly over this, but from the economic perspective, it's important to mention that, Pedro, we use the same stock for our online channel. Since we do the logistics, this is very important because with that, we can have a greater stock turn and a more efficient stock turn, because it's a different channel, and I can have a mix of products that I want to decide to sell here or there.

We do have that pricing tool and audience definition tool. Stock management, thinking about ROI and integrated capital, is certainly an important channel with a margin that is even better than some of our online channels.

It's pretty much average, but we can see the growth, which is the topic of the day. We need to grow with profitability.

The online world certainly brings its challenges, but as we improve our credit offer and as we improve these other channels, we can reduce the so-called detractors or those with a lower margin, and we can advance for a more adequate profitability level.

There's one more thing. Every growth as a online channel certainly helps us dilute our logistic cost because every store functions as a mini hub doing logistics, which certainly improves our competitiveness of our logistics, we become more competitive to gain more logistics services.

You're going to see a transformation this year when it comes to logistics services revenues and a dilution of the cost that really makes the company more competitive. It's a win-win and turn profits for all the ecosystem.

That's why you have to look at the contribution margin and that production that it brings to the whole. This is the business model for the company.

Very clear. Thank you.

Thank you, Pedro. Our next question comes from Gustavo from Bradesco.

Gustavo, please.

Hello, everyone. Thanks for the opportunity.

I actually have two questions. First, about the working capital dynamics of the company, especially because you ended up with a lower leverage with a more balanced balance sheet.

How is that being reflected in the relationship with suppliers in terms of terms, product mix? If you can give us more color on that, it would be great to understand how you think of that for working capital along the year.

The second question is about seasonality of this year. We have World Cup coming in the second quarter.

We would understand how you are going to work this seasonality in terms of working capital and what you think about stock investments. Perhaps if I may add another question about the online channel, it's been clear that the online channel is growing more in your four categories.

I want to understand your company's plan from now on if you're going to keep on exploring this with your partnership with Mercado Livre or organically that other types of partnership. These are my questions.

Thank you.

Thank you for the question, Gustavo. Let me just finish my notes here so I don't forget.

First, working capital dynamics, and I think Elcio can give you more details, but without a doubt, improvement with our leverage and balance, that certainly helps us because it impacts working capital and gross margin. Because again, we grew fast, and the macroeconomic scenario was very challenging in 2023.

We had issues in the industry, which impacted credit. Our negotiation many times was limited because you were buying at the credit limit that you had with each supplier.

That additional investment that usually happens in retail when the industry wants to accelerate its sales was limited because there was not much credit in the market to accelerate sales and sell more. Now, what saved us is that we brought new players, and certainly it improves the dynamics in the structural level because we've got new players in all categories.

Now we start to see a very positive impact in terms of credit improvement, credit limit from each supplier, whether through insurance or open risk, which is clean credit for suppliers that we had in the past, it basically disappeared in 2023, and now it's back, it's pretty much all suppliers, just one or two does not offers it, but we are testing approval, and it certainly allows us to have more flexibility in terms of negotiations. The limits go down in an elevator, but it goes up in a stairwell, as I often joke.

Nobody's going to double the limit overnight, but it allows us to pass these seasonality. The seasonality actually helps us take a slightly bigger leap.

Initially, the increase of credit limit allows buying more volume needs for the seasonality, and you have some buffer to have more flexibility in negotiations, getting better margins. That's how we see the dynamic over the year.

Now going to the second part of your question, how seasonality can impact our working capital. Over the year, we see it's natural to capture improvements in working capital, whether through better terms with our suppliers or greater efficiency in our stock turns, because now we have more digital channels.

We have a centralized stock for all online channels, which is certainly helps us optimize the stock. The World Cup will impact, it's just like Black Friday, but with bigger concentration in television.

Screens is our main category in Black Friday, but also mobile phones. The impact in mobile phones is not as intense as it is for appliances.

We will prepare our stock for the World Cup. World Cup is in June and July, this stock is going to be built over the second quarter.

The beginning of the second quarter, we see a growth in terms of stock levels, and possibly we're going to end the second quarter with a slightly higher stock level, which will be normalized in the third quarter. Then you start preparing for Black Friday.

It's almost like two Black Friday events in the year, with great investments from the industry. Everyone is highly excited about the World Cup, which in my opinion, is an important non-recurring event, especially considering the difficult macroeconomic scenario.

We don't see this as a positive year from the macro perspective, but we see that the company will keep gaining share, and we also see this one-off move for the World Cup, which is relevant. We estimate that the screen category is going to grow almost 15% this year just because of the World Cup.

It's certainly a relevant growth. This growth is expected to be concentrated both in the second and third quarters.

Growing your question about online channel and our strategy in terms of partnerships, we understand that our overall strategy is to be the largest 1P in Brazil in appliances, technology, and furniture. The biggest buyer, biggest seller, because this brings all competitive advantages, which is the best, biggest logistic infrastructure and the great credit portfolio.

To be the largest 1P, I have to pursue all channels. We have one big channel pulling up.

If we divide this in four blocks: we have physical stores, very important, where we have the experience, it's our showroom, a lot of credit depending on the macroeconomic scenario; online channel, our own online channel, which is very relevant with our app, chat, WhatsApp, agentic e-commerce; marketplaces; and now we're having AI. AI is already a relevant portion of organic traffic for the company, not paid traffic.

AI is still not more with media, they're starting to test that. Today the organic traffic is only organic.

The new protocol that Google has launched, the UCP protocol, will allow for a direct conversation inside AI. We are prepared for that, and we understand that our commercial scale and our logistic scale will make us very competitive in this new relevant channel that will be created.

It's better for us, because the greater the number of channels, the greater negotiation power we have. From the structural dynamic perspective, we see a very positive horizons for the company.

Someone needs to distribute the product to the customer, and we are more than ready to do just that.

Thank you.

Thank you, Senday.

Thank you, Gustavo. Our next question comes from Wellington from Bank of America.

Hi, everyone. Good afternoon.

Hi, Renato, Elcio, Gabriel. I have two topics that I would like to explore with you.

Going back to what has been already mentioned, which is the online offline dynamics. The industry as a whole this year and retailers, especially in the last quarter, saw a migration of sales from offline channels to online channels.

Thinking about your own offline channels and this migration dynamics, could you give us some color on how the market share dynamics, your relative performance, we can understand how the industry also behaved in this promotional period? The second topic would be about margins.

I think Renato and Elcio have explored this before, the online channel creates such a margin dynamic, but I want to understand what is driven by margin and what is driven by category mix. Explore the difference between a channel mix and a category mix.

Perhaps going down a little bit, we know that a very powerful SG&A control, especially when it comes to personnel costs. I just wanted to understand if we still have room for cuts or we should expect to see this level from now on.

Thank you.

Thank you, Wellington, for your three questions. They are very relevant because it will allow us to explore more the dynamic.

When we think about this migration from offline to online channel, it is happening faster than we had imagined. There's a piece of this which is connected to the macro scenario that impacts everyone.

Because again, remember that the macroeconomic scenario impacts everyone, but smaller the income, the greater the impact. Depending on the category, we have a mix of consumers with different income profiles, and that also changes depending on the channel.

We do have a migration of consumers that used to go to stores, shop, and now they see the app, nice dynamics, they see the digital credit as a channel that they can shop faster as well. This is an advantage because we can better capture those impulse shopping, because it's forceful.

I feel like buying a TV, I plan to go to the store on a Saturday, and then you go to the store, something might happen, it rains, and you don't go. Online, you think about it, you go and shop.

It helps you capture that customer who is willing to buy. On the other hand, there's a base of the pyramid who's highly impacted, they want to buy, but they cannot buy commercial conditions that they can afford.

Because today, for many customers that we require a 50% down payment, we have to require 45, 50%. We've offered 20 installments, now I'm offering eight or nine, the down payment is higher, installments are higher, and that suppresses demand.

Going to your second question, this happens differently depending on the category. If you think about people shopping for furniture, furniture are discretionary products, high added value because of the high average ticket, and the penetration is higher at the base of the pyramid.

This certainly impacts the customer. We don't have official numbers, if you go to Nielsen, we have official numbers for all technology and appliance categories, but not for furniture.

We have for online. We don't for physical stores.

We see that we're growing similar to physical stores, the share of furniture actually drops in the company. Online, the market dropped 22%.

Furniture, much more physical channel thing, but the macroeconomic impacts furniture, and that impacts gross margin. Then there's a specific dynamic with the company.

Our share is different for each category and different for each channel. When you say on average 26% physical stores, 13, 14% online, look at appliances.

I have 50% of share in the Southeast in appliances and TV, but online, I had 20. Obviously, because of the power of our brand, it's natural for these numbers to be pulled together.

We will see more growth online in the short term while these numbers normalize. Nothing's going to happen overnight, especially considering our discipline in capital allocation.

For some quarters, you'll have 2, 2.5 years of growth above market level, because the market is also growing online, because we are balancing our sales position. It's important to talk about 3P just to give you some color on the year.

3P was very strong in the fourth quarter. What we see now in 2026 is more discipline in the industry in the big sellers and also small sellers, with a lower volume.

Obviously, our arrival in Mercado Livre certainly impacts that, because we have now more visibility on the commercial strategies and the pricing of each player, and our negotiation power allows us to act quite fast to mitigate the more aggressive strategies that could impact the prices in the market as a whole. We see everyone being very disciplined, waiting for the second quarter because of the World Cup.

We have a strong seasonality both for TVs, but also appliances and mobile phones, but with a lot of discipline on 3P. I think 3P fights with 1P, and that fights price a little bit, which generates more pressure for us in the negotiation.

To avoid that pressure, we are seeing more discipline on the industry level so we can have a more rational market. This is what we expect for 2026, especially while the macroeconomic scenario remains challenging.

I think there was one more point. Oh, the SG&A, right?

Level of cuts. We're not going to see any cuts of that magnitude.

There is a gain in productivity because of the use of AI. Again, there are many things to be done, but nothing is going to happen overnight, nothing that will lead to a significant reduction in SG&A.

Thank you, Renato. Thank you.

Oh, I just wanted to add one thing that you mentioned, Renato, regarding furniture and the macro scenario. That there's a big impact on the furniture category from the macroeconomic scenario.

This happens all over Brazil. We are leaders in the sales of furniture in Brazil, and we have a plant.

The furniture category, speaking of the mix you mentioned, is the one with the large margin. As we see improvement in the macroeconomic scenario, we will see a recovery or a more significant recovery of the category.

That's why when we talk about the macroeconomic scenario, the effect for us is quite relevant in whole P&L. We can monetize and explore the benefits more once we see an improvement in the macroeconomic scenario.

SG&A is what Renato said. That's why our focus is to keep growing volume in a profitable way, with new initiatives, whether online or offline, to increase sales with a stock turn under control, we can certainly dilute that in SG&A, which is the classic operational leverage concept that will certainly impact our results.

Besides productivity and efficiency gains that will happen and will be incremental over the year.

Renato, Elcio, thank you so much.

Thank you, Wellington. Our next question comes from Gabriela from Goldman Sachs.

Gaby, please.

Hi, everyone. Thank you for taking my question.

I wanted to follow up on the Mercado Livre partnership. It's almost half of the quarter, how that is happening.

I want to understand what were the lessons, both in terms of product mix, average ticket, the customer profile on this channel comparing your online channel, and also a little bit of that, perhaps you can tell us more how that impact your customer acquisition cost. Thank you.

Great. Thank you, Gaby.

When we talk about Mercado Livre, there are many lessons and some positive surprises as well. First, we expected to see more shadows in the customer base, but we saw many new customers via Mercado Livre, which really helps us.

The customer profile was a little bit more higher income. I think lower income customers have stronger relationship with the brand.

When we look at our digital channels, we have a lot of customers who go to our offline channel, but they use our omnichannel strategy to buy to the best moment for them. They go to store, they see, they get the salesperson WhatsApp, sometimes they conclude on the WhatsApp or via app.

Mercado Livre brought an assortment coverage, and one great thing was to see the variety of SKU's. Since the beginning, we started selling without focusing on specific SKU's.

It's much less concentrated than our offline channel and online channel. Has more variety.

In the store, we have promotions for each category, you see a greater concentration in SKU's, and this is great. It helps our stock turn, it helps us to ensure a healthier inventory, and it captures opportunities that sometimes we would not be able to reach because we're talking about a very specific customer from a smaller category, because we always look at the 8.20.20 point ratio.

The tool encourages competition between sellers. You have a lot of visibility on the strategies of different players in the digital market, and that helps us adjust our strategy, both at Mercado Livre and in our own channel.

It helps us keep our competitiveness with more access to detail, which is important and positive. Another positive surprise was to see that some categories that are relevant for the company, but many times are not mentioned, for example, tires, large bulky products that we sell at a relevant volume, but they are not the core of what we do.

It is core because we have a differentiated logistics for bulky products. These sales also grew in a very significant way, showing that there is a potential for having dedicated people for these strategic items for the company, relevant items for the company, and that could have a bigger impact in our P&L.

Inside our commercial department, we have now a structure to address these opportunities and have a better negotiation, all these opportunities that are not just connected to tires, we also sell power tools, gym equipment, that we usually sell online or 3P, but that did not have such a digital reach, and now we certainly gain more relevant because we are in this platform, Mercado Livre. It generated a lot of lessons.

Customer acquisition cost, it's an advantage because it's under control. You don't make a media investment and run the risk of not having a conversion.

I pay over converted sales and in a percentage that makes sense for the company. As we mentioned, it generates a good contribution margin.

Of course, we also take advantage of the benefits from the cost of capital for funding credit card and other things that don't impact our profitability. It has been very profitable and very positive to have this partnership with Mercado Livre.

Perfect. Thank you.

Thank you.

Thank you, Gaby. Our next question comes from Lucas Esteves from Santander.

Lucas, please.

Hi, Renato, Elcio, Gabriel. Thank you for the opportunity.

I have two topics that I want to cover. First, is the 6x1 labor scale with all the discussions we see in the media over the end of 6x1 work shift.

Do you see a need for operational adjustments that you might need to do, and the financial impact that this could have on your business? If this could be transferred to price or impact your competitiveness.

The second topic, Renato, you mentioned agentic e-commerce, the AI. Which is a topic that I'm very interested in.

I want to understand how you see this, what is the potential for disruption and the migration from the offline to the online channel once agentic commerce and AI allows us to check out directly in these platforms? How you see the capital allocation because of that?

If you think about capital allocation, maybe to strengthen logistics, would make sense, because in my mind, I think every small offline seller will need to go to an e-commerce platform and will need a logistics partner, if you think about using that as a strength?

Excellent question, Lucas, thank you. Speaking of the labor-related question, this is a topic that has been discussed for a very long time.

We're not going to speculate about the impact or when this is going to happen, because this is a discussion that comes and goes. If it becomes a reality, we will need to adapt.

There is an impact, you have to adjust staff or headcount. It impacts on the compensation of our sales people, because they make variable income.

Salespeople, they have a minimum commission, but they also make a percentage of sales. If you dilute that in a bigger headcount, you'll have a smaller SG&A, with a little bit higher benefit numbers.

The impact in the operational adjustment that we need to make, and there's an impact on the sales people. We also have to think about the impact on that and their general purchasing power.

It's a very complex topic, we prefer to wait for the definitions before we can make a more assertive comment. On your second question, talking about the agentic commerce, the AI initiatives, and even the protocol that will allow all the agents to shop, because it's one thing for our agentic commerce to work for us as it works on our app, the other thing is being plugged at the different AI platforms, making customer's life easier.

Many of you already use Claude, CoWork. We do a million things via Claude.

You answer posts, you write posts, organize emails. Why not shop there?

Obviously, I do believe in a large share. I'm a great enthusiast of this topic.

I am a heavy user. There will be an audience that will choose that.

Just like e-commerce didn't kill the offline channels, AI is not going to kill e-commerce, and it's not going to kill offline channels. I think stores will remain to be a very relevant asset.

When you look at our service, for example, the vast majority of consumers who shop an appliance on the industry website, on a brand website, they first went to store to check the product. More than half of them went to one of our stores.

It's still quite relevant, the power of the offline channel, will keep on existing. Again, Brazil is a huge country with very low income levels, the need for credit for buying this products remains relevant.

Consumers, when they need credit or when they're buying a high-ticket product, even if you're going to pay in credit card or what have, they need a channel to complain to, they need a post-sales service, having a store is extremely relevant. That takes you to the second part of your question, which is logistics.

Since I got here, the first conversations we had with Chinese players, for them, our biggest asset, what sets us apart is our logistic infrastructure. This is what's going to allow this company to be successful in the future.

When they see what happened in China and in other countries, the players who had the largest logistics infrastructure ended up dominating the market. We also believe that.

When we talk about technology investment, past few years, a relevant portion of this investment goes to logistics infrastructure. That's another structural factor here that will certainly help us, because we have an idle capacity today that it allows for some operational leverage, but the tax reform in Brazil will certainly brings an opportunity to optimize this even more, which in the end gives us more incremental for growth or optimization of our infrastructure depending on the behavior of the market and depending on our ability to grow.

We do see growth in logistics, and we do see a logistic as one of the most strategic assets of this company. I believe there's a great value to be unlocked at the right time, once we decide to give visibility to our logistics business.

We have more than 100 external clients. Every quarter, we bring more 3P, 1P.

We increase retail media, our CBOs. This business at the right time, when it makes sense, we will certainly accelerate, and it will become a relevant business for this company, not just strategic and complementary, but also relevant with an impact in our P&L.

Very clear. Thank you.

Thank you, Lucas.

Thank you, Lucas. Our next question comes from Andrew from Morgan Stanley.

Hi. Thanks very much for the question.

I'm interested a couple items on your relationships with the marketplace sellers. The first just how you incentivize them to focus resources on Casas Bahia versus other marketplaces.

Is there a certain type of seller that aligns more with your marketplace than others? We know there's a lot of competition out there.

Then the related point, how you manage 1P and 3P conflicts. We know now that you're focusing on the core, there's more overlap between 3P and 1P.

Maybe if a product gets big enough, you could bring it into 1P. Curious how you manage the potential for conflicts in that channel.

Thank you.

Perfect. Thank you, Andrew.

I should answer in Portuguese, right? I'll answer this in Portuguese.

When it comes to relationship with marketplaces and how we incentivize marketplaces to focus on Casas Bahia, this was another positive surprise and another important lesson we had. Our stock depth makes a big difference when it comes to this competition for growth between marketplaces, because when they make an investment in a smaller seller, this investment brings some elasticity, and then it goes out because they run out of stock.

If you work with each seller, they have 100 TV sets, or 500, or 1,000 units of that SKU. If you go to a Casas Bahia, you have 10,000, 100,000.

The numbers are certainly much bigger. This depth of stock and the breadth of assortment allows for this investment to have a much greater return on marketplace than investing in many different sellers.

That's why there's an investment to advertise the official store for specific categories and also in specific SKUs. That brings a negotiation power to us with these marketplaces, which is certainly very relevant and brings a lot of sales elasticity.

We calibrate that, because it's the same commercial team deciding what's going to happen to each product. We balance that as to avoid cannibalization or a price war.

We accelerate one as this SKU I'll focus here or there, in a way that we can optimize profitability and, at the same time, remain very attractive to our customers. Now, on your second question, how we manage 1P and 3P sales and the competition that exists between these two products, which in reality are two big sellers in our platform.

When you go to our website, you see a TV set from a specific brand that I bought, is going to be sold, and you'll have, not the same SKU, but a similar SKU from 3P with a very specific difference, which is not always perceived by customers. Obviously, once I buy it, I prioritize my 1P.

If I didn't buy it yet, the 3P sale is relevant, it's good, with a better ROI. If I have to buy something to sell it, you don't have capital being allocated, the 3P sales are certainly very positive.

So 3P sales are not only complementary to ensure a good experience for customers, but it's also a way to maximize the returns on the investments we made. It's not a simple calculation to get to the right moment we will transfer from 3P to 1P, because of the seasonality of demand and the changes in consumption patterns, new technologies being launched.

We try to calculate that quite frequently, and there are some simulators we use to show the best levers. There is a certain level of internal competition between the area buying 3P and the area buying 1P, we can maximize the value from both types of sales, and then independently be able to compare them.

The commercial department has the autonomy to look at a product and say, "This product is selling well, I'm going to migrate it here, bring the margin along." For the accountability, they have the total revenue of the company for that category, which includes 3P.

The margin that they deliver, including the cost of capital, also includes 3P sales. It's not a trivial model, there are many variables in place, but we have some dashboards that certainly helps the team learn about that and understand the specificities of capital allocation, returns, we can optimize this in the long term.

Thank you for your question.

Thank you very much.

Thank you, Andrew. Renato, we don't have any more questions, now I'll hand the floor to you so you can close the call.

Thank you very much. I think before we close this, I just wanted to thank you for your questions.

They certainly reflect how disciplined we are in keep improving and how transparent our reports are. I just want to share three big numbers so you can all think about them.

First, 77% of reduction in our debt, nine quarters in a row of improving our operational margin, and R$1.8 billion in operational cash generation for the company in the quarter. These are not promises, these are facts, numbers that prove our ability to execute and that are certainly very relevant.

We know that the market is expecting the next chapter. The question that goes unanswered is: when are we going to have a positive net profit?

We are also very anxious to get to that chapter. Different from where we were two years ago, today we have the right capital structure, we have the operational discipline, and the monetization levers to get there.

The path is much shorter than it was before, and the complexity of execution is also much lower than what we had before. Our commitment to you is very simple: less talk, less storytelling, less concern about creating a thesis, and more results, more consistency at every quarter.

In the next quarters, we'll be delivering more details on the metrics that matter. The monetization of our ecosystem will evolve, the cash flow will be normalized, with financial expenses dropping.

With the reduction of spreads and other reductions, they will take place over time. For example, credit profile, we reduce the spread, but it's 14 months so we can replace the funding of our credit.

In the second half, the end of the year, you will see financial expenses at a normalized level. Every quarter, there will be an evolution in the bottom line, you can keep following this in real time and share the same level of confidence that we have.

The next chapter will certainly be much better than the previous ones, with the right management time now to focus on what's strategic, our credit, and the long-term perspective for this company. A new moment, much better to work here, much more fun for us as well.

Thank you for your trust, thank you for your time, and thank you to everyone who has helped us get here for the past two years, allowing for this huge transformation to take place so we can start to reap the results and show better results. Our team is available for any follow-up questions.

I wish you all a great day.

Renato, and of course, we have to invite you all to our Investor Day on the 23rd. Make sure you register on our website.

We expect to see you all there.

Yes, on that day, we'll give you more details on our strategic program for the next two years and the levers that makes us confident about profitability. Thank you so much, and welcome to our Investor Day.

I expect to see you there. We have a lot of great sales on this Consumer Week in Brazil, make sure you check out the stores.

Thank you so much.