Good morning, everybody, and thank you for your presence in our video conference to disseminate the results of the first quarter of 2026. In this first quarter, we have observed an scenario that's very selective for consumption in the domestic market and in the international market a little bit challenging, with geopolitical conflicts, exchange rates fluctuation.

In the domestic market, we have observed a rationale of consumers that have been suffering with high economic living costs, especially for the low income people, high interest rates, high indebtness of the population, and also using of the bets and gaming habits, and that's been making the consumers to have less income available for consume, especially for nonessential items. In this context, on the first quarter of 2026, reflected an adaptation of a mix of products and categories that we sell and the channels of distribution where we sell our products.

We also observed with focus in keeping operating resilience in the company, having a very strong discipline and controlling our expenses, as we are going to show later. We also focus on the adaptation of a mix of products and categories that are more accessible, and channels with more sales like self-service channels and direct services, and we also trust in the robustness of the company, its soundness, with the robust cash flow, and keeping the continuity of remuneration of our shareholders.

Based on that scenario, on the first quarter, it grew to 27.5 million pairs. This growth comes from the domestic market that's growing 9.3%, while the domestic market recedes 16.4%.

When we talk about domestic market, our growth comes from the brands of Division 1. The brands that grow in volume are Ipanema, and the male segment, Rider, Cartago, and Mormaii.

Our net revenue decreased 3.2%, reaching 683 million reais, and in the domestic market, the retraction was 1.5%, while in the international market, it was 7.8%. The gross profit decreased 12.7% for 230 million with a gross margin of 43.1%, a decrease of 3.6 pp.

The decrease in gross profit is connected to a commercial sales of a mix with less value-added products. It's less revenue per pair when compared to the first quarter of last year, and a decline in the COGS.

It didn't went down with the same comparable to the gross profit, and it went up to 59.1 million the adjusted EBIT with the margins of 9.3%, 6.1 pp. The net result is 122 million, a decrease of 24% and also a decrease of 5.3 pp.

Now talking about the performance of the domestic market, what we observed in the Division 1 brands is that they are growing in volume in 11.9%. They also increasing gross revenue.

It's 0.4% growth in revenue. This growth is sustained by the more accessible categories and brands that are more accessible such as Ipanema, and the male segment, Rider, Cartago, and Mormaii.

We also present a growth in selling in the channels with the high-service channels and indirect channels, and the selling has been impacted. It grew 11.9% in volume, but it was impacted by these two channels that sell more products with more accessible prices, with less added value.

The other lines of Division 1, they are also showing decreasing volumes and in revenue. Talking about Melissa now, we observe a more challenging environment with less flow in the stores, which impacted in a negative way the sell-out in volume.

It decreased 12.7%, and because of this weaker sell-out, we also have a decrease in the selling, similarly a retraction of 12%. We can observe the brand preserving its value strategy and growing in gross revenue per pair in 18.3% 7.8%, and a very strong performance of Melissa in the online channel, where it grows 18.3%.

Because of this growth that's very robust of 18.3% online sales of Melissa in the domestic market, they represent almost 20% of total sales in the domestic market. We end this first quarter with 476 store 36 stores when compared to 419 in the first quarter of last year.

When we analyze the external market, the international market is a little bit more challenging, with geopolitical conflicts. These conflicts, they are causing ruptures in logistics and increasing freight costs, what's being causing delays in deliveries and impacting the performance of sell-out in seasonal markets, where the hot season is not the whole year, it's just a few months.

When we have delays in shipping, that will compromise the sell-out, and we have observed competition with Asian products, not only in Brazil, but in all of the markets where we are present. China is coming strong, selling their products in other markets other from the United States because they are not selling there anymore, and that's been impacting our exports.

We have a growth revenue in exports of 2.5%, and this growth in gross revenue, it's a result of a better mix of products sold. Melissa is being more relevant, growing in volume and revenue, and a continent where we have a very positive performance is the North America.

If you look here at the e-commerce performance, you can observe volume and increase in GMV, 14% in volume, GMV 18%. They grew, even though that the number of sessions is 2.5% when compared to the last year, it's a smaller number.

Gross margin is stable in 68.9%, a small decrease of 0.1 pp. The recurring EBIT coming from our online sales grew 17% for 2.4 million reais.

We observe the general sales online compared to the total sales in the domestic market, they grew from 6.8%, they are 8.2%. When we observe this indicator of Melissa only, we can see that total online sales, they represent 19.7% of total sales of Melissa in the domestic market.

Here you can see the gross revenue graph. You can see what grew and what decreased.

This revenue decreases 3.2%. The volume of the domestic market adds 4.8 million 48.5 million reais, decreasing for 56.5.

As I mentioned before, it because of a mix of less added value, especially Ipanema. The volume in the international market decreases 30.4 million, and price and mix with this mix of Melissa growing and strongly in the international market, we can add 35.1 million reais.

The 10% that has been more valued in comparison to the first quarter, with this change, we have a decrease in the revenue of 18 million reais. Our COGS here, as I mentioned before, our COGS has a gross margin.

Decreases 3.6 pp, representing 56.9% of the net revenue when compared to 53.3% in the first quarter of last year. This impact is related to labor.

This negative impact is directly connected to the mix with more accessible categories. We have smaller margins in this categories and a smaller revenue per pair and a smaller decrease in our manufacturing costs.

Additionally to this effect of a change in mix, we also have an impact in the payroll. We started with the first installment and last year and this year we have two other installments.

Checking our expenses, we are highly disciplined in controlling our expenses, where our recurring expenses, they are stable. They had a small growth of 0.1% when compared to the first quarter of last year.

When we observe our total expenses, they decreased 12.6%. Our sales expenses decreased 9%, and our administrative expenses, they grew 4.8%, highly influenced by this payroll.

This decrease of 12.6% of total expenses, it's highly connected to the restructuring of DGB that we did throughout last year, and then they are showing their effects now. Now evolving to the EBIT, it decreases 13.1%, going to 47.8 to 41.6.

The two variables here that impact this decrease in EBIT is the net revenue and COGS variation, because all the other factors, except from a small variation in G&A expenses, all the other factors, they contribute for this increase and EBIT. Adjusted EBIT and EBIT, we have a variation of 17.5 of nonrecurring items, and out of this 17.5 million reais, 13.5 are connected to the payment of an agreement with the IRS, and we had the understanding that payments abroad related to licensings there are no transfer of technology.

The IRS understood different than us, and then we had to establish an agreement to balance this new understanding of the IRS. Apart from this extraordinary charge we have, we also have 5.2 million DGB, this 6.4 million, and obsolete inventory also impacted.

This is our financial results. It was 17% smaller than last year, reaching 73 million reais.

The major impact in our financial outcome is a smaller profits in our financial applications because of an average balance of 26.7% that's declining when compared to last year. That comes from the extraordinary dividends of almost 1 billion reais that we announced last year.

If you remember, the 978 million reais, we made four installments with that, and out of this four installments, two out of them were paid, 400 million in January, 200 million in March, another 200 million in June, and another 178 million in September. Because of this smaller cash balance, we had a 17% decrease.

When we adjust the real estate projects because they ended up impacting our EBIT and our operating results, that is not part of our operation, but it's part of the remuneration of our balance of applications. This is the results that impact equity in our financial outcomes.

The adjusted one is 74.7 million reais, a decrease of 13.7% when compared to the same period last year. Our portfolio that we call alternative investments, they used to have 978 million reais in March this year.

100% of this amount is allocated for projects of real estate development. When we observe this portfolio since the beginning, it has a profitability of 281.4% of the CDI.

Based on all this numbers, as I mentioned before, it was 102 million reais. We have 25.5 a reserve for fiscal incentives, 17 million for IRS for taxes and fees, and then we have 56 million for legal reserve, and 2 million reais were destined by the legal reserve.

We have 55.7 million reais. The management proposal is to distribute this 55 million reais, 25.7 million reais as dividends, and 30 million reais or 24.7 net as IOE.

This amounts will be paid to our shareholders on the June 10th, 2026, for the shareholders that had shares from 21st of May 2026 onwards. It's ex-dividends from 21st of May.

What I had to say was that on this first quarter. Now I'm open for a Q&A session.

Good morning. There is a big level of discount.

What do you think about a program of rebuying these stocks?

Good morning, William. Today, we have this program.

It's open already, but it's much more related to rebuying stocks to actually go to our program of stock option. Grendene today cannot rebuy stocks because don't have autonomy.

We don't have an accumulated profit because we redistributed our profits, 100%. We cannot do this action unless we don't distribute dividends anymore, and then we can rebuy our stocks.

Good morning. The company had a strategy of prioritizing the profits to volume, but now in the first quarter of 2026, we saw a difference, a change for products that have less added value.

What can we expect for 2026 because of this action?

Thank you for a question. Based on this strategy, our strategy reflects the market's demand.

Our clients demanded, and this comes, like I said before, Ipanema and also the masculine segment. We still have products that are more expensive, that have more added value.

Actually, we're producing more of these products of more added value, but the consumer, especially the low-income consumers, they have less income to purchase. What we decided to do, it reflects in the sell-out of this product, and of course in our selling, it's a bigger amount of products that are more affordable, but we keep producing products that have more added value, products that offer more comfort, products that are softer and lighter.

At this moment, the demand is for products that are more affordable. Thank you.

Good morning. Thank you for presentation.

My question is, after the process of taxes over dividends, how does Grendene see this, and what would be the ideal for the year of 2026?

We are not changing the policy of dividend, we'll keep distributing whatever is needed to do, our sell-out is not going to be changed in relation to other situations.

Once again, thank you so much for your presence in our video conference, our video call. Thank you.

These were the results of the first quarter of 2026. If you have any further questions, our team is there to answer your questions, whatever questions you need, and so have a great weekend.

Thank you so much. The video call of results of the first quarter of 2026 by Grendene is over now, and the department of Investors Relationship is there for you anytime you need.

Thank you so much for your participation, and you all have a great day.