Thank you. Good morning, everyone, and thank you for joining us at another earnings conference call.

I will start with the highlights of the first quarter. We started 2026 with a same-store sales of apparel of 4.8%, which represents a 22% growth in net apparel revenue over the last two years.

At the same time, we also delivered a significant improvement in apparel gross margin, which reached 55.5%, an expansion of nearly 1 percentage point. The beauty category continues to gain relevance and is growing at a faster pace, posting an increase of approximately 16% in Q1.

This dynamic of apparel margin expansion combined with a higher share of the beauty mix in the company's portfolio resulted in a 2.3 percentage point expansion in merchandise gross margin for the quarter. Digital growth was also a highlight, with a 29.2% increase in website and app sales year-over-year.

This led to an increase of 1.5 percentage points in penetration, which reached 7% of total sales in the quarter. We also continue to invest in our main growth levers, and as a result, CAPEX for the quarter was 51% higher year-over-year, totaling 61.2 million BRL, with a primary focus on technology, logistics, and a higher number of store renovations.

Our financial discipline, characterized by efficiency in our investment strategy and continuous deleveraging, also contributed to a 77.7% increase in pre-IFRS 16 adjusted net income for the quarter, reaching 12.6 million BRL. Finally, we ended the quarter with an ROIC of 20.9%, 2.8 percentage points above Q1 2025.

On the next slide, I want to share a bit more detail on our performance for the quarter. In order to do that, it's important to provide some context.

Like we discussed in our last earnings release, we had a temporary imbalance of our product pyramid, particularly in the volume of entry-level products in Q4. In December, we identified the problem, and we mentioned this in our earnings call, and we moved quickly to rebalance the assortment.

The goal was to rebuild our product structure, and we executed this process with great agility. At the same time, we accelerated merchandise receipts due to an earlier Carnival and sped up our collections renewal process.

As a result of this rebalance and specific anticipations, we saw a gradual increase in product availability in stores month after month, which was accompanied by a progressive improvement in sales performance. Furthermore, Test & Learn, combined with our commercial intelligence hub and dynamic pricing models, contributed to greater collection accuracy.

This set of initiatives allowed us to once again improve our gross margin for the quarter, achieving an expansion of nearly 1 percentage point in apparel. More importantly, these results reinforce our confidence in the execution of the Energia C&A initiatives, and we remain convinced that there are still many significant opportunities in-house to continue this journey of increasing our productivity per square meter.

About our transformation journey, we want to share with you our main achievements under Energia, which has now entered its final year of execution. Starting with the product pillar, we continued to evolve consistently in the company's key categories, with technology playing an essential role in collection development.

Product development is no longer exclusively a creative decision. It now incorporates the use of market data and customer behavior, with tools that use this information to guide our professionals, from creation to the final assortment planning process.

This allows C&A to have an even greater relevance for our customers, increasing the accuracy of our collections. For example, we have consistently adopted the Test & Learn model, which means testing smaller capsules, learning quickly from customer response, and scaling only what works well.

That is exactly what happened in Q1. We accelerated collections and scaled to stores what we tested in the past and achieved great results.

As a consequence, we had good performance in key women's categories as well as in our first winter collections, which arrived in March. Another important advancement is dynamic pricing 2.0, which continues with the maturation of its algorithms, bringing even more value within the life cycle of our products.

Finally, the beauty category continues to gain relevance in our portfolio, with a value proposition that complements our apparel core. This category grew by almost 16% year-over-year.

Now moving on to the omnichannel journey, I will start by talking about the offline part of the journey. We strongly believe in the potential of our store base.

It is now a strategic asset for our productivity. As we opened the new Energia store concept, which continues to see significant growth above the company's average.

The highlight has been the consistent increase in customer traffic. This new concept is now being implemented in all new store openings and renovations of the existing store base.

Our focus is on elevated customer experience through a clearer, more inspiring fashion presentation, with an even more seamless journey. This approach has consistently shown productivity improvements, with a higher conversion rate, and better brand and product perception.

As disclosed in our CAPEX budget for 2026, we expect to carry out 20 to 25 renovations in 2026. To date, we have already started the renovation process in 12 stores, with grand reopenings expected between the second and third quarters of the year.

Regarding new stores, we continue prioritizing the quality of our locations to ensure a higher success rate for those investments and new store openings. The strategy remains focused on high-traffic locations that align with our brand profile.

For this year, our forecast is to open between 10 to 15 stores, and in Q1, we had four stores under construction, two of which have already been opened in the state of Santa Catarina. Now moving on to the online journey, which has been a highlight for us.

We believe that digital is not just a sales channel, but a key part of our customers' omnichannel journey. We continue our digital evolution based on three fronts: first, better customer experience; second, greater operational efficiency; and third, greater integration with the physical stores.

We continue to make continuous progress in navigation experience, speed, and personalization of the journey. Last year, we made great advances in usability through the implementation of new tools and the intensive use of AI.

For example, product search and recommendation have had a neat impact on conversion and customer experience. The app also contributes to a closer relationship with our customers, not just in a transactional way.

For this reason, it concentrates more engaged consumers, with a higher purchase frequency and greater repeat rate. We continue to consistently advance the development of new digital functionalities.

A highlight is the Home for You feature, the personalized virtual storefront that increases offer relevance for customers. Another tool is the AI personal shopper, which enables a more contextual search and a more efficient conversational journey that leads to higher conversion rates.

A stronger integration with brick-and-mortar stores, we are intensifying the ship-from-store model, an initiative that has contributed to expanding assortment, greater efficiency in inventory usage in stores, and increased sales conversion. Furthermore, the increasing use of data, AI, and automation has strengthened our operations as a whole, not only through more precise product recommendations, but also through greater agility in customer service, elevating the client's experience with the brand.

We are now working hard on the payment step on the website and app. Our focus is to streamline the purchase journey and reducing friction at the point of conversion.

Moving on to brand and relationships, we continue working to strengthen our brand positioning, highlighting our connection with the customer as a brand that is connected to our consumers' real lives. This consistency is key to strengthen brand recognition and emotional identification with our customers.

It's worth noting that we have been part of the lives of millions of Brazilians for 50 years now. Precisely for this reason, we chose to start our celebrations with jeans, which is one of C&A's most iconic and recognized products.

We started strong. We were present on the red carpet of the 2026 Oscars.

Yes, the Academy Awards, one of the most influential stages in global culture, with a dress created from jeans pieces from our collections, in an event that marked the start of our Jeans Week in March this year. As part of this celebration, we continue with an innovative approach by placing the intelligence of an editorial perspective at the center of our product creation, through an initiative that values the role of fashion editors as curators that translate trends and cultural repertoire into relevant collections for our customers.

Just like we did last year, we were also one of the supporters of Todo Mundo no Rio, which took place this past weekend with Shakira in one of the largest music events in the country, gathering over 2 million people in Copacabana, all in contact with the C&A brand. This is how we enter the third year of the Energia C&A cycle, very clear about the continuity of our growth journey.

We are already looking ahead to the next strategic cycle. We are mapping out opportunities, assessing strategies and formats that allow us to advance on a journey of consistent growth.

Spoiler: in this context, we will launch in May our new athleisure brand, ACE, with a store in São Paulo that will serve as a pilot for this new business format. Now, I turn the floor over to Laurence.

Great. Thank you, Paulo.

Good morning, everyone. I will continue now with the presentation, focusing on our financial performance for Q1 2026.

Starting with net merchandise revenue, net merchandise revenue reached 1.5 billion BRL, an 2.1% increase year-over-year. In apparel, we delivered same-store sales of 4.8% in spite of the high baseline level of Q1 '25.

On a two-year basis, net apparel revenue grew 22.7%. As Paulo already mentioned, net beauty revenue increased 16% year-over-year.

Now moving on to merchandise gross margin, we continued to consistently expand apparel gross margin, which increased .9 percentage points this quarter due to a more efficient sales management. Additionally, the quarter had an important component of collection renewal that contributed to this margin expansion.

It's worth noting that throughout the quarter, we used dynamic pricing, as well as targeted promotional initiatives to ensure inventory renewal while preserving profitability. As a result of the dynamics from telecom went down and the consequent higher share of beauty products, our merchandise gross margin expanded 2.3 percentage points year-over-year.

Moving on to the next slide, let's now talk about operating expenses. In Q1 2026, pre-IFRS 16 SG&A totaled 717 million BRL, up 4.6% year-over-year.

I'd like to highlight that despite the execution of the Energia initiatives and the strengthening of our structure, we managed to keep expense growth in line with inflation and below the growth of net apparel revenue, which is our core category and which accounts for over 90% of our merchandise revenue. On this slide, what I would like to remind you is that the company still has two significant comparative base effects that are likely to continue in the coming quarter and that will impact expense dilution.

First, the end of the revenue from the Bradescard partnership, which ended in Q2 2025. The second effect relates to the lower revenue resulting from the completion of the telecom category wind-down that occurred in Q3 2025.

About C&A Pay now, we continued to position C&A Pay as a relationship lever focused on supporting retail sales. As a result, we delivered 6.1% growth in the portfolio of up to 360 days and reached 9.4 million cards issued.

Its share of retail sales reached 26.7%, which is 2.5 percentage points higher than in Q1 '25. At the same time, we have maintained a more selective credit policy given the current environment and high interest rates.

As a result, delinquency indicators such as NPL 90 and net charge-offs on the portfolio continued to improve. NPL 90 reached 14.2% on the portfolio of up to 360 days, an improvement of 4.3 percentage points against Q1 '25.

At the same time, net charge-off on the portfolio of up to 360 days reached 2.9%, a reduction of .8 percentage points in the quarter. Regarding C&A Pay expenses, we continue with tight control, which allowed a 21.8% reduction in the segment's SG&A year-over-year.

As a result, operating income reached 23 million in the quarter, up 18% year-over-year. Now, I'll briefly talk about the delinquency indicators.

The idea here is just to share with you that the main indicators, such as NPL 90, net charge-offs, and coverage, continue to show improvement and are quite healthy. Now let's talk about adjusted EBITDA.

Our adjusted EBITDA for the quarter reached 116 million BRL with a margin of 7.2%, which represents a 6.3% decrease year-over-year and a .5 percentage point decrease in adjusted EBITDA margin due to the operating deleverage we have explained earlier. Next slide will focus on pre-IFRS adjusted net income, which reached 12.6 million BRL in Q1 2026, up 78% year-over-year.

The adjusted net margin grew .4 percentage points, mainly due to the financial deleverage caused by the reduction in the company's debt level. Moving on to the next slide, capital allocation and investments.

Total CAPEX for Q1 '26 was 61.2 million BRL, up 51.5% year-over-year. This reflects the execution of our 2026 investment plan.

Investment in renovations grew by 37%, reflecting the start of the Energia concept rollout with 12 renovations currently underway. We also began investments in the Northeast DC and in automation processes for the São Paulo and Santa Catarina DCs.

It's important to note that despite this CAPEX acceleration, LTM ROIC reached 20.9% in Q1 2026, 2.8 percentage points compared to Q1 2025. This reflects the company's discipline in capital allocation.

About working capital, we had an 8-day increase in the cash conversion cycle, mainly due to we have a different product mix now without telecom, and we have the recomposition of entry-level product assortment, and also early receipt of winter products, which contributed to this effect. It's also worth highlighting that inventory aging is healthier than last year.

The cash consumption in Q1 is mainly explained by the performance we had in Q4 2025, given that approximately 70% of Q4 sales are collected in Q1 of the following year. All right, to wrap up the financial data, we'll now move on to the last slide, in which I will comment on the evolution of our debt and liquidity position.

We continue our process of financial deleverage, and as a result, we delivered another reduction in the company's financial leverage, which reached .1 times compared to .5 times net debt to EBITDA ratio in Q1 2025. We also informed the fourth share repurchase program adding up to approximately 5% of floating shares.

The goal is to add additional value to shareholders and optimize the company's capital structure. With that, I finish my comments on the financial performance, and we can now move on to the Q&A session.

Good morning, everyone. I have two questions on my side.

The first is about sales. I think there's been a lot of discussion among investors about the winter dynamics this year considering what happened last year.

Can you please tell us, I know this is only the first month of Q2, but based on what you've seen so far and on your expectations for Q2, considering the high baseline last year and a very strong winter, we would like to understand your take on sales evolution. Also, I would like to hear from you about the gross margin dynamic.

You drew attention in Q1, but you also have a high inventory. Will you need more markdowns to reduce inventory?

Will that hurt your margins in the coming months? If you can tell us a bit more about your gross margin dynamics and how structural gains can help with this turnaround.

Thank you.

Hi, Gastim. Good morning, and thank you for your questions.

I will start by speaking on the winter dynamics. This is an expected discussion for this time of the year.

I usually say, and you probably are tired of hearing, that winter is a movie and not a picture. It's not a snapshot.

We start with assortments in March, and we work with higher volume through September. It's a journey.

Of course, we are constantly comparing the journey with last year's. Depending on weather, whether it's warmer or colder, which will impact the dynamics and the results.

What is our take on this? We are actually quite confident.

I understand that our winter collection is probably the best winter collection of all time, and it didn't come out of the blue. It came from a strong work on the Test & Learn methodology that we started doing last year.

There are many things that you see in stores today that are lessons learned at the end of the 2025 winter season. An example, last weekend in the South of Brazil, the level of sales explosion in times like this really strong.

Very confident, and I believe that we are going to have a second quarter that can be just as good as, or even better than Q1. Of course, the temperature has an impact.

Of course, there are forecasts that are flexible, of course, it's not written in stone, but this will influence the short term. I like to look at the whole picture.

When we look at Q2 plus Q3, I would say we are very prepared for the story. We started Q2 with an exceptional inventory level.

We have many campaigns that are underway, like we did last week with Todo Mundo no Rio. This strengthens the visibility and clarity of the C&A brand to consumers.

We are optimistic. Of course, we are aware of what's happening in the market with this whole discussion on debt levels, but we are very prepared to play this game.

Based on the experience we have in recent rounds, we can have a great performance at the level we've been achieving so far.

Great. That was very clear.

Now, Laurence, if you could talk about gross margin and what actually happened in Q1 and the recurrent structural gains from now on.

About gross margin, I think Paulo commented on that. It reflects the inventory freshness, the recomposition of inventory in Q1, with the positioning and the confidence we have, as well as the signals we saw when the temperature dropped, reassures us that we can maintain our consistency of gross margins in Q2.

That's very clear. Thank you so much for the answers, Paulo and Laurence.

Good morning, Paulo and Laurence. I have two questions here on my side.

The FX rate. I think that the real has appreciated, and you talked about the winter season inventory.

Can you tell us about the FX impact on gross margin from now on, with our pricing elasticity? Does it make sense to be a bit more aggressive in pricing, or maybe absorb gains of a more favorable FX rate so that you can capture more gross margin?

Now, can you break down the sales performance by warmer and colder regions? Looking to the South, Southeast, compared to the Northeast and North of the country, is there a great difference in performance among those regions?

Thank you.

Vinicius, thank you for your question. About FX, there are two things I'd like to comment on.

The FX rate right now facilitates the margin of imported products. However, we do have hedging policies that end up giving us more stability throughout the process, regardless of whether it's going up or down.

We have more stability when it comes to this. Now, you saw what happened in Q1.

At the end of the day, we understand that gross margin is very much connected to how accurate and precise the collection is. When it comes to this, I would say we are in a good position to have a resilient gross margin.

Now, about the breakdown of the performance by region, warmer or colder regions. Again, there's a cold spell where the temperature drops in a colder region, like São Paulo or the South region, the sales performance explodes.

This can completely change the performance of the quarter. In warmer days, these regions face a bit more challenge, especially when we compare to the previous year.

Because temperatures impact performance, there is no doubt about that. In the Midwest and Northeast, the influence is not so great.

When we hold campaigns like we did in March, the Jeans Report or fashion editors campaign that we held, with the editors working as curators, this really boosts performance of warmer regions. It all depends.

I cannot see any upward or downward trend in those regions if we focus only on this early winter season, it's too early to talk about major trends. I feel reassured that we have had a positive response when there's a cold spell in colder regions, and there's also resilience in the all-year collection in warmer regions.

Thank you, Paulo.

Good morning, Paulo and Laurence. Thank you for taking my question.

Looking at consumers, despite improvement in assortment and mix throughout the quarter, I would like to understand the traffic dynamic at stores. How customer flow has been, and how much of this sequential improvement comes from execution, and how much comes from a better flow dynamic?

Now about inventory, thinking about the qualitative part of all of this, how you are prepared for a reaction in the winter season, I want to understand your reactiveness when it comes to inventory dynamics and inventory building throughout the winter season.

Thank you for your question. I'll start with consumer dynamics.

Q1 was not characterized by an increase in flow. There has actually been some stability in customer flow.

What boosted our growth more was our commercial evolution, our commercial proposal, which evolved. We have to understand what happened in Q4 and Q1.

When the macroeconomy starts to make pressure on consumers' income, they go after more versatility and promotions. This is a very characteristic combination that has been happening now in early 2026.

We continue to see consumers who are conscious about price and value, and very interested in promotions. If you go into the stores, if you took a picture of the stores compared to one year ago or two years ago, you will see a more intense price communication, drawing consumers' attention, saying, "Oh, look what a great deal you have here," or "Look at this very versatile item."

This is a more intense conversation we've been having with consumers, and we don't see any changes in the short term. We believe this will continue to be a reality while interest rates are at this level, and families' debt levels continue high.

I think we've had a good performance, and this was very welcomed by customers with a good perception of the value of our collections. Now, about reactiveness in the winter season, we started doing this last year, and I would say we have two main factors impacting here.

The first is very short term, which is the understanding of what cold spell is, and we know that for each location, we have a pre-organization for each store depending on where they are located, and also based on temperature forecasts. The way we display our collections to consumers may vary depending on that.

When we know there's a cold spell coming in the South, we prepare the store for that cold spell, the way we display our products in-store changes, and this makes all the difference and compromises. Going back to your first point, less dependence on a higher shopping mall traffic.

The second point is related to the collections' reactiveness per se. In the all-year products that have the higher turnaround because of the warmer temperatures that may happen at a certain point, we now have our chain and systems prepared to trigger new orders or deliver previous orders faster so that we can react in the different fronts where we operate.

Winter products reactiveness is lower because the winter base is imported, the cycles are longer. However, for the first time, I'd say we've been able to react faster.

Of course, the cycle is longer, but with the Test & Scale methodology, we've been able to test some products last year, and we scaled them in 2026. That is increasing our confidence in the precision of our winter collection.

This is what I have to say about winter season reactiveness for now.

That was very clear. Congratulations on your results, Paulo.

Hi, good morning, Paulo, Laurence. Thank you for taking my questions, and congratulations on your results.

I have two questions. First, thank you for your spoiler about ACE, a São Paulo store.

Can you tell us more about the idea of this concept? You tried this movement with a double door a few years ago.

Two years ago, it was earlier than this whole health and wellness movement. Can you tell us more about what you're planning?

Are you going to test one store and then try to scale? Is that going to be connected to the C&A brand, or is that a more separate brand?

Can you tell us more about that? My second question is about the product pyramid.

You made some adjustments, I know it's quite clear, but I want to understand your take on a longer horizon, that brand positioning, because you focused very much on product improvement and quality improvement that pays for this price readjustment, but also to reflecting the value of the brand. You also tried to continue with this in Q4.

We saw some restrictions from consumers, but thinking one year ahead to complement the sales evolution by square meter, what can we consider in terms of a product pyramid, and the strategy between the different categories? What will be the main levers to sustain this productivity improvement in stores?

Thank you.

Thank you, Dani, for your questions. I'll start with the spoiler.

Like I said, it's a spoiler. I won't be able to answer all your questions right now, but we're working to get together with investors at a strategic point in time, these share to give you further details about that.

Like you said, we've had an evolution and a highlight in this category since the beginning of the Energia journey. As part of this evolution, the collection evolved, and the value perception evolved, as well as the product development.

The category perception improved as a whole. Based on that, we ran a few tests with double doors.

The test started with one store, and then we expanded, and we now have some stores with a double door concept. We learned even more about the athleisure dynamics.

We are now undergoing a third phase, which is a more independent path before C&A. We have a new format in May.

We will invite you all to come and visit to see this new format, and we believe there is a significant opportunity here to, based on the lessons we learned and the response we got from our consumers, explore this journey. We're going to have this pilot, and in our Test & Scale philosophy, we will see what works well, make adjustments if need be, and then we'll scale if the potential that we believe is actually there.

This is only the beginning of the conversation. I wanted to incite your curiosity, but that was on purpose, and we will invite you all to the opening of this store now in the month of May in São Paulo.

As soon as we have more details, we will get in touch with our investors and analysts to tell you more about our ambition with this business. Now, you talked about the product pyramid.

I would say that since the beginning of the Energia strategy, our goal was to have an evolution in our brand perception, collection perception, and value perception. In the last two and a half years, we explored the possibility to change the assortment strategy in different categories, and this was very successful.

Of course, the macro context was harsh as a consequence of the high interest rates that we're seeing. We saw a change in consumer behavior, which became more restricted.

That's what happened in Q4. We rebalanced the offer, and now we are pretty much thinking about versatility and value perception, and the reaction came right away.

We knew how to correct them, and we made the corrections needed, and we are now much more precise in our offers. Now, looking ahead, the opportunities in terms of value perception will continue.

We will continue to explore and expand these possibilities. We will adapt this to the different store profiles, the concept stores will have more assortment of these products, whereas stores in more popular locations will have a bit less.

This is part of the dynamic assortment concept that we've been working on. We want to have a different assortment by store based on the needs and preferences of that customer base of that region.

The opportunity is there. We will continue to take that into account, but of course, we adapted our strategy to the macroeconomic environment.

Great, that's very clear. Looking forward to visiting the new store.

You'll get an invitation.

Hi, good morning, everyone. Thanks for taking my question, Paulo and Laurence.

Can we talk about costs for the second half of '26 and first half of 2027? The FX rate has helped, as was already mentioned in a previous question.

The macroeconomic condition, we saw the prices of some raw materials, especially polyester and cotton, under pressure. We also have pressures on logistics that can impact the costs of imported products.

Do you expect cost pressures, and in the medium term, what can be done to offset that and maintain gross margins? Thank you.

Thank you for your question. The cost dynamic per se, like you just said, this is all very recent with the crisis in Iran.

That has led to an increase in oil prices, and the synthetic materials that are byproducts of oil are having a greater impact on this pricing adjustment. This is all very recent, very new, and we don't know how long this is going to last.

We've had good conversations with our suppliers, and we don't see any major impact or major threat to margins right now. Of course, we'll keep track of this over time, but right now, our margin at the end of the day doesn't suffer much because the FX rate helps, but the polyester cost goes up, one offsets the other.

The coming months will be decisive in the understanding of how resilient the FX is or the prices of synthetic materials.

Excellent. Thank you, Paulo.

Good morning, everyone. Thank you for taking my question.

I have two questions. The first is about Q1.

Can you please tell us about the dynamics in Q1? Did it start slowly and then accelerated in March, or how did it go?

The second question is about digital. I would like to understand profitability of this channel, and how it has evolved in the last 12 months.

Thank you so much.

All right. We don't talk about the monthly numbers, but I think it's important to talk about our reality.

We ended Q4 with a homework to do, which was to rebalance the product pyramid, especially our entry-level products. That's what we did, starting in December, but that was intensified throughout Q1.

Of course, this had an impact on our growth curve, which was progressively growing throughout the quarter. That's the greater clarity we have when it comes to the sales evolution throughout Q1.

Now, about digital, I think this is something we can also see in our gross margins. This was not growth at all costs or at the expense of buying traffic.

This growth was a consequence of a better experience level and greater integration with physical stores, as well as customer experience evolution with more personalization and technology embedded in our more seamless journeys, which impacted the conversion rate directly. This is the main factor in our performance in Q1, and we're very confident it will continue in the coming quarters.

About profitability, we had zero impact. We did not fund this growth with margins.

This is a personal belief we have. We want this channel to be a channel that adds value to C&A, rather than just attracting flow.

We want sales with margin.

Thank you, Paulo.

Good morning, everyone. I will talk about something that was already mentioned, but I want to have a different perspective.

Looking at Q2, we're used to seeing C&A outperforming the rest of the market, had a good recovery compared to Q4. It had an adjustment, but looking ahead, what are the main levers that will reassure C&A to regain share?

Is that really reactiveness, or is that related to credit origination? We see a higher penetration of C&A Pay this quarter.

If Desenrola 2.0 would help in your strategy, what gives you confidence about share gain? Now, at the expenses, we saw SG&A per square meter accelerated compared to last quarter.

How can these moving parts impact the expenses for the rest of the year? If you have any guidance to give us.

Thank you for your questions, João. I'll talk about Q2 and the levers, and Laurence will talk about expenses.

At the end of the day, our playbook remains the same. We are focused on the Energia initiatives, and we still have many opportunities here in the category element.

There are categories that have had their assortment expanded and their participation in physical stores expanded, and that is increasing sales per square meter and our productivity. That will continue to be a growing focus for us this year.

Now, about reactiveness, that's another key element in our game, especially in turbulent times. The more turbulent the times are, less we can make mistakes, and the more we have to be able to react, and that will bring consumers closer to us.

Test & Learn, Test & Scale, and offer consumers what they want. C&A reactive model will increase that effect.

Now, another element is the experience dynamic, and I would like to focus on two things: first, renovations. Renovation will be an important driver for growth in H2.

The Energia stores have been bringing a clear leverage to us. That will be an important lever.

The other one is digital. The advances we saw in Q1 were not by chance, and this is not going to stop.

It will continue throughout the coming quarters, and this will bring another growth driver. The third element is that we're celebrating 50 years of C&A in Brazil in 2026.

We've been communicating this to our audience. Communication is another key driver for 2026.

We have fashion editors, jeans campaign at the Oscars, Todo Mundo no Rio, and we have other surprises, including Rock in Rio, which we have already announced. The brand will be more top of mind for this celebration, always focused on the celebration of the 50 years of C&A in Brazil.

That's a very important element. If we face some headwinds because of the macroeconomic environment, we'll focus on Energia to offset all that and boost C&A's growth.

Q1 was a small sample of everything that we'll see in the future.

All right, João, thank you for your question. I will start talking about SG&A.

We talked about this briefly, but the main issues related to SG&A in Q1 was the greater volume of products processed in logistics, and that was mainly due to the recomposition of the product base, P1 and P2, the process of normalization that we saw through Q1, and the commercial strategy to bring winter products earlier. P1 and P2, this base recomposition required more processing, and the cost that was a bit higher as well.

These are the main factors. Of course, when you look at dilution, the baseline for the Bradescard revenue last year and also the revenue from cell phones last year and that went down, telecom also impacted expense dilution in the quarter.

An important point here in this study that Paulo mentioned and that we've been talking about, C&A moment having strategic clear initiatives in this last year of Energia, strengthening product, strengthening journey, both physical and digital. At the same time, we've been working on to reduce structures, processes, adopt technologies.

We've been working hard to improve productivity while we build something new. I think it's very natural to see expense control to have a positive impact in the bottom line, but here at C&A, we go beyond expense control to make it feasible for us to have top-line levers and other initiatives.

That's our mindset, and that worked for this line item. Yes, we believe that even with the advance in new stores, this quarter we have seven new stores that were opened in Q4 2025, but even with the new initiatives strengthening all these different areas and all that, we still believe it's possible to have some expense dilution for 2026 as a whole.

That's our aspiration in our worldview.

Let me just add something here. I forgot to talk about C&A Pay.

We are not going to risk credit more than we do today. We've been very cautious in our operations here, and we have seen evolution in all of our delinquency indicators and quality of our portfolio.

The increase in C&A Pay penetration has come mainly due to the loyalty of our customers. We see more use of C&A Pay and the transactions at C&A and repeat purchases from C&A Pay customer base, and we will make even more efforts to make sure that share increases, but credit will not be a way to just increase sales.

That's not part of our equation right now.

We can also add something here. We continue with great technicality when it comes to credit-granting and impacting approval rates.

We're very loyal and faithful to our credit-granting models. We do not intend to abandon this.

We want to continue with our loyalty to our architecture of tools for credit granting and credit recovery. Another point of your question is we do not have very high expectations about Desenrola 2.0.

There are renegotiation channels that are already working. Serasa, Boa Vista, there are channels already available for this type of renegotiation.

We take part in all of these initiatives, and we'll take part in Desenrola 2.0 as well, but we have low expectations when it comes to this.

Great. Now, it's great to see customer repeat rates at C&A Pay.

What about the average ticket of the group? Can you tell us about that?

It's clearly higher. That's the beauty of our C&A Pay model.

Good morning, Paulo and Laurence. I have two questions.

Paulo, you commented on several aspects related to Energia and how this has driven store productivity gains, which has been a highlight for you in recent years and also in Q1. Can you tell us about that difference in productivity of the new stores compared to old stores that are still to be renovated?

That's one question. Now about C&A Pay, I know it's a loyalty tool.

Do you have any other initiatives being added to the credit product, like cashback and gaining penetration to increase customer loyalty, frequency, and also average ticket prices?

Thank you for your questions. About productivity, we are actually talking about three stores with different profiles, and the goal is that we could learn from how each profile would react.

In all three of them, we reached double digits. Some a bit more, others a bit less, but all of them double digits.

This is above C&A's average. Everything we've seen so far is very exciting.

This is what makes us feel very confident about this lever moving forward. I think this lift is very clear.

About C&A Pay, we've been using promotions to boost C&A Pay, as we've been doing. Cashback is something we announce sometimes, not 100% of the time, but yes, we've been trying to find ways to make the consumer benefit portfolio better, if you pay with C&A Pay.

It has to be better to use C&A Pay than any other payment method whenever you come to C&A. That's the philosophy behind this, and the team has been testing different dynamics, and we've been able to attain an increased penetration of our card in these purchases because of these Test & Scale.

Excellent. Thank you, Paulo.

Hi, thanks very much for the question. Most have been answered, but I guess given that you announced the share buyback program to take the opportunity to hear how you're thinking about capital allocation.

This buyback is bigger than the ones you've done in the past, how you're thinking about the sizing versus other potential areas of returning capital, and along the same lines, any updated thoughts on what you see as the right capital structure, leverage levels for the business over time? Thanks very much.

Thank you for your question, Andrew. Laurence?

I think that the buyback program has a very clear goal, which is to increase the value, or create added value to shareholders with the buyback and canceling of those shares. This is very clear considering share holder return and capital structure adjustment, considering the clarity and definition of the value needed for investments in 2026, and also given what we will do in 2026, the plan that was approved for 2026, and the expected cash generation for 2026.

Given the opportunity and the minimum return required for all of the capital allocation projects, we understood that it was the ideal moment for capital allocation, and we decided on this buyback. Because of that, and Paulo also mentioned that we are already working on a new strategic cycle, and we believe that from now on, cash generation will be enough to execute our investment plan in the coming years.

We will keep a close eye on capital allocation, and mainly a capital structure at the company from now on.

Very clear. Thank you.

Thank you all for joining us.