Good morning, all. Welcome to our video conference to communicate Alpargatas's 2022 third quarter's results. Today, we have with us Beto Funari, our CEO, and Julián Garrido, our CFO. This video conference is being recorded and simultaneously translated into English. Questions today will be different. After the end of the final presentation, if you wish to ask a question, raise your hand using Zoom's toolbar and wait with the microphone closed until you are assigned to ask a question. We are going to open your microphone and allow you to ask your question.
Before proceeding, I would like to clarify that forward-looking statements that may be made during this video conference relating to Alpargatas' business prospects, projections, and operating and financial targets are beliefs and premises of the company's board being made with basis on information that is currently available. Now, I turn to Beto, our CEO, who will start this video conference. Beto, you can proceed.
Good morning, everyone. I hope you are all well. Thank you for being here for this video conference of results for our third quarter. I would like to get started highlighting our businesses by showing you our business highlights. Today, I'm going to be talking about the highlights as well as points for retention so we can get in depth a little bit into the dynamics of our businesses. Let's start out with our highlights. Our consolidated net revenue in this third quarter reached BRL 1.45 million. We're going to explain a little bit later on in detail.
There was an increase in the performance of the international operations of 15% in the volume, which aligned to what we had said in the second quarter about the phasing throughout this year. I'm going to talk a little bit more about that as well. The company has overall had a net revenue of 12%. Constant currency net profit. I'm going to talk a little bit more about that as well. In Brazil, in addition to the double-digit growth, we also grew our market share both in value and in EBITDA. We are having sequential gains in share in the specialized footwear market. It's also the third quarter in which we increase our gross margin. In Brazil, it grew 120 basis points, which was also an important advancement.
The expansion of our gross margin in our main market, which is Brazil, which took us to a recurring EBITDA of BRL 184 million, which was 70% of the net revenue, pretty much stabilized compared to last quarters, the last year's third quarter. As for the points of attention, there are five points of attention we're going to be covering today throughout the presentation. They are all points of attention related to the management and also things to be clarified to the market. First of all, we are going to be talking about the decrease of 6% in the volumes sold in Brazil. We're also going to talk about the structuring of the US operation. We are undergoing a restructuring process, as we had already mentioned, and we had a decrease of 62% in our operations.
We are going to talk about international operations, gross margin, which decreased 900 basis points. We're going to talk about SG&A increase of 13%, which excludes other operational expenses. I'm going to talk about Rothy's net revenue of 2% increase. From the perspective of management, the two points that need attention over the next quarter is the volume in Brazil and restructuring the U.S. The other three points of attention, we understand they were important in this quarter, but we understand that they are points that have already evolved as we advance in our actions and initiatives. Let me cover the points for attention right now, and after that, we will open for the Q&A. Let's start with the Havaianas Brazil operations.
As I mentioned, we had a decrease in 6% in volume, and we have a gain in the market share in the food channel of, two points in volume and 3% in value. We see again the strength of our brand. In the specialized channels and food channel, we had a sequence of gains of share and double-digit growth in the food channel. It's extremely important to mention concerning the costs pressure that we have our unit economics protected, advancing this third quarter. The revenue per pair reached 14 BRL, an increase of 19% in the net revenue per pair. 15% of that was pricing gains and 4% the mix advancement. We are seeing an increase above the inflation of our costs. Our mix contributed to 4% of those results.
Our richest mix already represents 50% of our sales. To give you something as a basis, in the first quarter, that represented 40% only. We are advancing both. It's prepared. This is very important in this environment that in which we are living in against and fighting against this scenario of inflation. I see messages that the audio was cracking. Just a second.
We are having some latency on Beto's transmission. We'll be back soon. I just ask you for one minute. For you to wait for a minute so we can get our audio and video back to work.
I think we're back now. Thank you. I'm going to repeat the information on this slide just to make sure we are all on the same page.
Once again, we are going to approach, on the next slide, the fall we had in the volume of 6%. I want to reinforce that in Brazil, we keep advancing both in volume and in value. The value growing more than the volume gains, and we also advancing in the specialized channels. We keep advancing from July on in these specialized channels with a double-digit growth. I want to emphasize that we are protecting and accelerating our unit economics of the brands. The net revenue per pair reached BRL 14, growing 19%. What is the composition of those 19% of gain?
15% comes from increasing prices into the new collection, and 4% arising from the mix, richer mix, which we saw 40% in the fourth quarter to 50% in the third quarter, showing the power of the brand, both in showing the gains in pricing as well as in the improvement in the mix. This impacts the gross profit per pair, which reached 6%, increasing 22% and reaching our recurring EBITDA per pair of 3 BRL or 11% growth. Let's talk about our point of attention for the loss of the volume. This loss in volume reflects the decrease of the flip-flops sales in the food channel. This has been suffering cross elasticity because of the inflation of all the products in the food channels.
As you know, there was a peak of food inflation in Brazil of 16%, and this food inflation is 5% over the official inflation rate, IPCA. We gain traction, but not enough to compensate for this reduction in purchasing power because people have lost their purchasing power in the food channels. What are we doing? We are trying to leverage impulse buying. Why? When people go to the specialized channels, it's a planned purchase, especially in our stores. You're planning to buy Havaianas. In the food channels, due to this reduction in the purchasing power of consumers, we have to boost the impulse buying, so we're investing more in media, especially TV. We are stronger now in the third quarter to stimulate the impulse buying of our products.
We are leveraging the celebration dates here in Brazil, such as the Soccer World Cup to come in November, as well as the gifts and promotional days such as Black Friday, which we're going to participate this year and increasingly, significant displays and extra points of sale. It's difficult to leverage this purchasing power because it needs to be recovered by consumers, but we are advancing in impulse purchases. We are increasing in our execution in points of sale, and we have a segmentation of mix focused on this specialized channel, and this is helping us to offset the losses we had in the food channel. Of course, the weighting is different and we cannot completely cover for the loss we had in the food channels. In the international businesses, we had positive growth.
We had a growth of 15% in our volume and a growth in constant currency of 12% increase, which was affected specifically by the geographic mix. In the U.S., there was an increase in distribution channels. I would like to emphasize that this growth in the volume was boosted by service level that reached 85% OTIF, plus OTIF on time in full compared to the second quarter as we commented in our last release. There was a recovery in the service levels, and we managed to follow the sell-out increase and replenish the products we sold quicker and capture on this benefit. In May, our main business units outside Brazil grew 17% in volume and 21% in net revenue, showing also our capacity to pass on price and improvements to the mix of products.
We've seen the international in the first nine months of this year compared to the first nine months of 2021. We see a growth of 5% in volume and 8% in net revenue. In EMEA, our main business units grew double digits, 11% in volume and 15% in net revenue in the first nine months of this year compared to the first nine months of 2021. I would like to highlight a few important points here. First of all, in the year to date, we have a gross margin per pair, which is protected. It's more or less in line with our results of last year, a decrease of 3%, even though there is a higher weight of Latin America in those results. However, we see a positive effect on our international EBITDA. They affect the gross margin.
However, this geographic mix is good for our EBITDA. In the year to date, we have an EBITDA margin of 17% aligned to the rest of the brand. In the third quarter, the distributing markets showed an EBITDA of 22%. They are higher than the average for the company. Why am I highlighting that? Because in the international businesses, our main business, Europe, is strong and growing our unit economics, and you see the weight of the distributors who are coming are better considering the EBITDA or the profitability with a margin of 22% in the third quarter alone. Let's go into the second point of attention, which is our operations in the American market. We worked with a few initiatives to try to reach continuous growth in 2023. Sustainable. The sustainable growth has three pillars.
The first one is inside our portfolio. We have just finished our segmentation of portfolio, which allows for a better premium division of our products. We have more drops of the products planned for next year, so we can address and explore all the selling dates we have. Since the spring to the summer, having more drops, allowing us to have more capacity to generate more replenishment with more price levels, larger price range, and we have a stronger catalog using this distinguished drops. Therefore, in the portfolio, we evolved a lot. In our go-to-market strategy, we continue to accelerate our sales through the flagship. In the quarter, we had a growth of over 30% the Havaianas.com. It's still small compared to the total amount, but it's gaining traction and accelerating.
More than that, we have an important tool to generate with the end of our transition at Amazon. We don't have a conclusion. That's still a point to be, and we have not yet made a decision. However, we still suffer from this effect. Amazon still keeps demanding what to do with the new model for 2023. Rothy's saw a growth in their net revenue of 2% compared to the third quarter 2021. $38 million of net revenue and EBITDA of $11 million. I'm going to show you how we are advancing these operational indicators later on. I'd like to reinforce that this 2% was a phasing of the initiatives that's happened in the second quarter of this year.
Last year, they only happened in the third quarter. We saw an increase in net revenue compared to the third quarter last year. Investments grew 70%, so they. As for the year's principal indicators of Rothy's, what I would like to highlight here, I've already talked about the third quarter and this quarter and the year to date. Coincidentally, it's the same. In the first 9 months, there was a growth of 34% in our revenue, $34 million investments. There was an increase of 74%. The initiatives we have are revamping the gross margin. You see that from the fourth quarter to the third quarter, there was an evolution. We have already 90 basis points in the gross margin, showing already an expansion compared to the second quarter, which is accelerating the third quarter.
It started in the second and accelerated the third quarter, and that's important. Ahead of us, because we have a rationalization of our portfolio and increase in pricing. The acquisition of clients saw a leap of 33%, reaching 2.8 million clients. Our client base, why is this number important? Because 53% of our revenue comes from recurring purchase. We have a high recurring purchases. In the stores, we went from 6 to 15 stores, and in-store sales increased 30%. Contribution of the physical stores to the net revenue went from 6% to 9%, and that helps us. The operational indicators are going in the correct directions.
In this year, we already told you we are investing to bring this business back to the level of growth and to gain scale so we can have a path to profitability in the future. These were the highlights. Those were the points for attention. Now I'm going to have Julián. Julián is going to have some more points of attention. I'm going to be back here for the Q&A session.
Good morning, everyone. Thank you, Beto. I'm going to highlight with you the highlights which are four. The first one, the first financial highlight is the gross profit. On the left side, talking about those bars, we see a growth from BRL 459 million to BRL 503 million, 9% increase in constant currency in BRL million.
We see that Brazil went from 308- 356, a growth of 15%, and the international business saw a decrease of 3%. When we look under that, we're talking about the gross margin for the quarter. We see a variation of 47.4% from 47.4% to 48.2%, 0.8 points. When we look at Havaianas, we see minus 1.2 PP. Havaianas Brazil, 1.2 PP. That made the gross margin grow 1.2 percentage points. This decrease we saw above of 3% makes Havaianas International go down nine percentage points, 9.3 percentage points. When you compare this gross margin to the previous quarter of 52.2%, there was a decrease of minus 5.7.
Brazil has been increasing, 2.5% increase Havaianas Brazil compared to the second quarter. On the right side, on the upper right side, I am going to talk about the evolution of the gross margin in Brazil. As we have been telling you from the first quarter, this is a graph by month. The graph before you, we showed you the quarters. The green line is 2022. What we see clearly is that we went from 31% of gross profits over the net sales or the gross margin to 38% and now 44% in September. A reminder, in January of the raw material inflation we had and the costs used this lower and this older stock of raw material. We improved that by increasing our purchase of raw material, rubber, and this resulted in a quarter.
We had to roll it out into the production and into our results. That's what we see. What do we see here? This benefit of this increase in the prices of material, raw material purchased is rolling out to the results. It's important to mention that because the international operations sees a delay on this effect. In this quarter, they are still using the inventory, specifically in EMEA, are looking at the inventory they purchased back then, which was that very expensive inventory that Brazil has already got rid of. It is natural to see this evolution in the inventory prices. Obviously, there is also an exchange rate effect because the EMEA bought this inventory when real, Brazilian real was valued. What we see in Brazil is going to happen as well as an evolution in the international businesses.
There is this delay in the international and of the exchange rate effect. As Beto mentioned, this is geographic. The USA in gross margin has a higher percentage because of our distributors. Of course, when I look at the EBITDA, my lower line, this is positive. Especially the APAC and LATAM growth shows improvement to the EBITDA because there is not this SG&A cost as if we were operating directly there. Let's look at our next highlight. It's the EBITDA. What I would like to emphasize here is a comparison between quarter-over-quarter. How one quarter compares to the other. When you look at that, what the evolution was like. We see clearly increase of our price increase strategy, the RGM coming from Brazil, offsetting the COGS and the SG&A.
I also like to highlight a little bit this SG&A and showing this increase of 13%. We had an investment in our sales structure. I didn't have this sales structure in the third quarter 2021. They are our investments and also investment in technology inside the structure. We have more people. One of the main highlights is the IOAs, where we more than doubled the quantity of headcount. Of course, there is a return. We see a return from IOAs as well. We already started in this quarter, and we don't see is the restructuring of these international operations. The simplification, we are cutting one layer between Beto and this structure, and obviously the benefit will be seen and soon, and we will continue with the OBZ work.
The third highlight I'd like to show you is the net profit, the operational profit. To make it easier for you to understand, we separated on the left side what is operational profit, on the right side, the complete until we get to the consolidated profit. The operational profit, as I mentioned before, when I compare to what I had in the third quarter 2021 and to this quarter in 2022, we had a -5 EBITDA, recurring EBITDA due to everything we saw in the international operations. As for depreciation and amortization, we are investing more. We invested over BRL 300 million in the CapEx throughout this year, so it's natural to have this higher depreciation. On the right-hand side, the first line is the same explanation we saw on the left side, and the non-operational items or non-recurring.
One very important is the revenue, like the IR, the benefits we have in Brazil. We already expect it to happen. There is something very important which refers to the U.S. This is the income tax. In Brazil, we have a fiscal benefit which is not in our balance. We have the right to it, but why is it not in our balance sheet? Because we have to have perspective for good perspectives for the future. When we start to have profit benefits as if it's something as if I was not paying taxes. I waive the taxes. This year, the U.S. shows some negative results because I have a lot of this income tax accumulated which has not been activated, but I have the right. This comes straight into the results.
When it's positive, I use this benefit. When I have a negative profit, it comes straight to our results. I don't create that in my results ledger, but it will be seen in the future. The raw fees, equity, the depreciation, and also the investment and the income taxes, as well as the non-creation of this asset, which doesn't mean you don't have the right. Whenever I have a positive results, I'm going to use this benefit, this tax benefits which I am entitled to use. The last highlight is the net financial position. On the left side, we were at BRL 678 million in September. Now, in September 2022, we are ending at BRL 809 million. The first result is the CapEx. The second, the remuneration of the shareholders.
We also have a point here about the working capital, which is connected to our inventory. Inventory of raw material as well as of finished products. I'm drawing a comparison here between what I had in September 2021. We had an increase in the raw material. We also saw an increase in the inventory, as I mentioned here. This is what it is, the working capital. We also had a strategy that we were not able to implement last year, which was of anticipating the production to send it to Europe right now. This is happening in this quarter. Just a reminder, last year, we produced the majority of the products we produced in January and February, as I mentioned.
For economic reasons, world economic reasons, we had a difficulty to have this OTIF, as Beto mentioned, this on-time in-full service level. This year, we are more prepared, we're better prepared. The products which are going to be in Europe next year are leaving now. This is a picture of September. In September this year, we have this volume that I didn't have in September last year at this size. This is the largest variations. This is all I had to share with you, and now I get back to Beto so we can have our Q&A started.
Thank you, Julián and Beto. Now we are going to start our Q&A session. As I said at the beginning, if you have a question, you can raise your hand using Zoom's tool, and we are going to open your microphone so you can ask your question. We have a few people with their hands raised. Following the order, first, we have Thiago Suedt from XP Investimentos. Thiago, let me open up your microphone.
Good morning, everyone. Can you hear me well? Well done. Guys, good morning. Thank you for answering our question. Julián, Beto, Rafael, what we'd like to approach here from our side is basically two topics. I think basically we went through all of them before, but first of all, from the perspective of the loss in the volume in Brazil, it would be nice to understand a little bit better the expectation for the initiatives that Beto mentioned of adjusting a little bit of the operations in Brazil to engage consumers to purchase buying power in this quarter, especially in the food channels. I want to understand a little bit the positive effect that you expect to have from those initiatives from now on. The second topic would be about the international markets.
I think another thing here, what Beto mentioned about the U.S., it would be nice if you guys could give us an overview of what you expect for a more normalized operations of the U.S. operations in the future. Thinking of this clearance of sellers, this you know removal of sellers of indirect sellers in Amazon's website and this website improvements. What do you expect and when do you expect? What's the timing for that to happen? Connected to all of that, when do you guys expect that this operation is actually going to reach a break-even point? Undergo all of this inventory adjustment and what do you expect in its results for the American operations after this break-even point has been reached? Thank you for answering my questions.
Thank you, Thiago. Okay. Let's talk about it. Okay. Two very important questions. These are from the points of attention. These are the two main points for attention that we believe to be most critical from the U.S. results.
These are points we need to evolve on. I offered this update of how we see them today. Our sell-out volume in Brazil is our main focus. The initiatives I mentioned are to accelerate our sell-out in the food channels. The food channel, it's the main channel in Brazil. We have specifically an indirect channel to support them, to sell to them. We believe our inventory in this channel, but we have to have a better sell-out so we can have a turnover of this inventory and have our selling. This sell-out to consumers in all of our analysis are being impacted by a smaller purchasing power. The inflation, the purchasing power is much above the official IPCA inflation rate. Of course, our flip-flop sales is affected.
Pretty much it's the same money you have, you had in the past, you have to spend all that on all the things you have at the supermarket. Of course, food is going to be a priority and our flip-flops are going to see a decrease in its sales. We have to follow up on how much the purchasing power recovers faster or not in the Brazilian market. We are monitoring closely how the measures will affect. There is still a deficit in this purchasing power. In the third quarter, we see this cross elasticity. What we see for the next quarter is that we are going to have a pressure in the selling because the food market, the food channel will still be pressured in the next quarter.
I don't think we're going to be able to increase our selling. I think we'll still be under pressure of the basket of products which are undergoing this inflation and being affected by the decreased purchasing power of Brazilians. I have this expectation to keep seeing this pressure on the selling in the food channels, partially mitigated by the initiatives we have in the food and specialized channels. We believe that our revenue will still be positive, both because of the mix and because of the price increase. We don't have a perspective in the food channel to see a positive increase. We think we'll still be pressured in the food channels, and we are going to have our selling pressured by that, and we are monitoring that. As for the American market, what is the break-even point?
The break-even point. It is the same results when we look at the last year's results. You can have an idea of what the break-even point is for the American market. We are improving in our unit economics. It's better than before. What we see now is that in 2023, we will still be a point, a moment of transition in the U.S. I don't think, but I see a very good transition for next year. We are going to update you on our next quarter's release at the beginning of next year. We have to define this new model for the marketplaces that we are following up close.
What we are seeing in the U.S. right now as well is that since we had lower sell-out numbers in the department stores in the U.S., we already started at a smaller, betting more on the replenishing of products than in the pre-sales. From the perspective of the mid-term, we are confident to reach this break-even point. In 2023, we're going to see a transition, this period of transition again. I don't see that we are going to be reaching the break-even point. The economic scenario is strong, so since we gained scale, we see all the gears working and responding very well. These are the two points for retention. We don't see an improvement of those two points for retention right now, but we will keep you up to date and in our next quarter's release. Thank you, Thiago, for your question.
Our next question now comes from Bob Ford. Bob Ford, would you like to ask your question? Your microphone is open, I guess. Just a second, guys. Bob, I'm not sure you were saying anything, but we cannot hear you. You're muted. I'm sorry.
Could you tell us a little bit about the answer of the market to innovation and to your enhanced capacity, and how we could think of the innovation from now on? How do you think about reducing the unauthorized sellers?
Bob, there was a little bit of a breakdown of your question. Can you please repeat your question?
I'm sorry, Beto. Yes. Can you tell me a little bit more about the answer of the market to innovation, specifically the demand for the enhanced capability, and what can you think about this from now on? And where are the non-authorized dealers getting product from, and how do you think to address that? How do we intend to address that?
Thank you, Bob, for your question. All right. I understood that your question is about innovation and about unauthorized sellers at Amazon in the U.S. Well done. Let me start with the second, and then I'll go back to the first. What we saw was a leap in last year of almost six times more unauthorized dealers in the U.S. In other words, there is a market interested in Havaianas at Amazon.
From the one peak to the three-peak model, you lose the most important thing, which is the Buy Box from Amazon. When you lose your Buy Boxes, unauthorized sellers grow. To give an idea, now we have over 600 unauthorized sellers. They were less than 100. When you are a Buy Box, Amazon controls that. They don't allow them to occupy the Buy Box, so they are not so relevant. We are trying to get to this cleaning in a certain way or clearance. How do you do that? By winning the Buy Box again. That's extremely important.
At the moment, the market, the model we are looking at from now on, how we can establish a model that we can gain and control a Buy Box without lowering our prices. This is the challenging looking from the challenge perspective. Looking from the interesting perspective is that we have a demand. The market is heated at Amazon. We came to sell about 300,000-400,000 pairs last year through Amazon. There is an important demand to be captured there, seized by us. We are looking at that in a way that we don't reduce prices. How we can create a model, I'm going to connect it to your first question.
We understand that the biggest opportunity in the U.S. is also this capacity to create a more premium portfolio, bringing a brand that's increasingly more positioned as a fashion brand, as we do in Europe. To do that, we cannot lower our prices at Amazon. Otherwise, you create a tension in our strategy. We are trying to come up with a strategy that rebalances but also positions the brand in a way that it can capture the innovations and take the effect on this innovation you mentioned. Nowadays, in Europe, we have a better reach and more premium mix of flip-flops. I'm gonna give you an example. The U.S. are the market that sells the most of these Swarovski Havaianas. Secondly, we see a bigger demand for our sandals in Havaianas.
We have a strong portfolio for to address this market in next year. As we are leaders in the women's market, we have some innovations for the kids market and for the men's market. Behind me, you can see clogs for kids. We also have what we are positioning as more fashion in the U.S. In order to reach those more, this richer mix, we have to stop competing through prices at Amazon. This rebalancing has to be very careful in 2023, and we have to understand how we are going to play there with the segments of portfolio and categories. What is important to reinforce is that the brand in the U.S. has capacity to position in this fashion room, in this fashion space. That's what we see in our e-commerce.
We are growing all of our indicators of the e-commerce, and there are two very strong indicators. One of them is that there is a very strong demand for Havaianas, especially for our more basic mix of products, which has been right now addressed by these unauthorized sellers. It's not in the interest of Amazon to sell through those unauthorized sellers. They also have the interest of controlling, these unauthorized dealers. This is going to demand a little bit more of time to find and to get to make this rebalance.
From the point of view of strategy of products, we had an important reformulation because now we created drops which are segmented, so we can bring novelties in the different seasons and create this seasonal demand, this novelty at the stores and create a replenishment, a faster replenishment of products at the stores. This was very well accepted by customers, but they, what they do is to pre-purchase what was their sales of last year. With more drops, we can have more orders to replenish their inventories. I think this is going to help us to regain this level of sales that we used to have in the past. This segmentation of portfolio more into a fashion industry, including not only premium flip-flops, but also sandals, is a strategy. This demands us to do it gradually.
We are not going to be able to deploy this 100% next year, but we are certainly going to advance health on a more healthy basis. In 2024, we're going to be able to accelerate that. It's a process. It's proving to be a little bit slower than what we the way we would like to be, but it's going to be more sustainable. We have to be more resilient and more patient now to fix this process in the U.S. The brand is strong. It has awareness. There are states in which we are extremely strong, and it's a brand that has this unaddressed demand that we are going to tap in the future.
Where are the unauthorized dealers getting their products from, Beto?
Bob, can you please repeat your question?
Where are the unauthorized dealers getting these products?
Bob, it's hard to identify the origin because these are very small sellers. We imagine that they might purchase products in Brazil. Those parallel markets usually are from Brazil. We don't know the stores in Brazil, but there is a large quantity of those resellers and with a small quantity, so they're able to get into the U.S. not paying taxes, you know, because they take with them a very small quantity of products. Again, understanding this mechanism, these unauthorized small sellers, they migrate. When you make a transition, they take advantage. Whenever we fix that, they will move to another market rather than try to keep finding a way to work in this market. We need some time, but we are going to address and adjust all of that. We just need more time. Thank you, Bob, for your question.
Let's go to João Soares from Citibank.
Morning, everyone. Four questions. The first one is just to clarify. Beto, you mentioned in the first question that the inventory in the food channel is healthy, but you also mentioned that sell-in probably is going to keep suffering. I just want to understand, if you start to have an improvement in the sellout, you are still going to have pressure on the sell-in because of your inventory levels in the food channel? Just to make clear, the connection between those two points. The second question is about this dynamic that you mentioned, crossing or cross elasticity, which is a new term.
Is there any way you are going to rethink your price strategy? We can see consistently an improvement in the revenue per pair in Brazil. Now that you are going to go to Black Friday, I imagine there is a policy that is going to capture more a little bit on promotions, on special pricing. A last question, if you allow me, is about Rothy's. Given the level of investment you have right now, what is the expectation? I know that you cannot give us any kind of guidance on the market, but if you can give an idea on the growth of Rothy's for the future. Thank you.
Thank you, João. Let me address your question. Sell-in sellout. The important message here is that we're going to activate the sellout in a stronger way to recover our sell-in faster. We don't see this happening instantaneously, you know? There is a process that we are going to capture on that. We are going to suffer from that. Our selling is going to suffer. The market is like -1%, -2%, +1%, +2%. Nowadays, what I see is these numbers as probably negative because of this crossing or cross-elasticity. We probably need a few more months before the purchasing power of the consumers in Brazil recovers. It's not under our control. What it can do is to focus on the strategy to increase impulse purchase.
The sell-in should still struggle and suffer, even though we have a very positive sellout. A positive sellout. This is how the food channel works, and this is the main impact, and this is where we see the cross-elasticity. Everything we see nowadays about the cross-elasticity, when we look at the elasticity in brand, there is no reason for us to improve our prices, to decrease our prices. We keep to have our RGM strategy, and we will hope to keep seeing healthy net revenue per pair in the mix. We have a few regional opportunities, but they do not affect the whole of the pricing strategy in Brazil. In this sell-in sellout mechanism.
We don't want to affect the revenue per pair, and this is what we see as something that we are going to have a carryover in our business. We don't see this coming back. What we see is that we need a bigger time to see the recovery of the volume increase in Brazil. As for Rothy's, the growth of Rothy's, there was this 34% increase in nine months. It's healthy, a healthy recovery. We like this number. We see that investments are starting to create a new foundation for the scale of Rothy's. What we intend is to finish this first round of investment this year and work so that we can grow like continuously. We like the number 34%.
We are going now into the third quarter, which usually it's a very important quarter for Rothy's. There are, you know, the seasonal dates that there's seasonal holidays. The most important part of the message I would like you to take with you is, we see an improvement in the gross margin per unit. There was a rationalization of the portfolio. We cut off the items that had low profitability in our mix. Almost the entirety of our inventory goes in a freight by sea, not by air. We have the perspective of a better mix of portfolio and gross margin that's going to help us in the future to have more funding without penalizing the results. This is a process. Our growth is healthy.
There is potential to grow more, of course. We see there is a potential to grow more. The fact we have 2.8 million of our customer base, it gives us some comfort, makes us comfortable in terms of loyalty and recurrency. Our level of recurrency, recurrent purchase and loyalty remains intact. We aim to gain more customers, of course. We have a new line of sneakers that was released in September. We still have a healthy level in our core business in the main market. We are well-positioned to reach this sustainable growth and to generate this margin that we want.
I'm sorry, guys. Thank you for the question, João. The next question is by Joseph Giordano, JP Morgan.
Good morning, everyone, Julián, Beto, and Rafael. I have three simple questions. The first one, looking at, a little bit further ahead in time, thinking of next year, I'd like to have an update from you about how your expansion, of the manufacturing project is. I think it's a great, tool inside your strategy, so I'd like to understand where you are at and what are the main deployments expected for, the very short term. About Brazil, I see that the brand is quite healthy. We see a great pricing. I would like to explore with you two points. Inside the RGM strategy, I would like to understand a little more what is innovation inside this, price increase versus the core business. I would like to understand how much the beyond the core contributes nowadays to that purpose.
Secondly, I'd like to explore a little bit more the market share of the new specialized channels. We see that your company has a continuous market share in the food channel, but I want to see how you see the evolution for the boutiques, right, the specialized channels.
Hello, Joseph. Thank you for your question. Good morning. All right. Thank you for the question about the iLab, the industrial improvement program. I think it's important an update. We inaugurated our mixing center for tests in October last month. The mixing center, to give you an idea, has a capacity for 38 million pairs. It has a daily shipping of 1.3 million pairs. Most importantly, again, among all the benefits, it cuts in 50% the lead time. That's extremely important for next year for us. We're going to have a ramp up of volume and to start to operate in January. From last year on, we will get a new benefit in the replenishment of the products in the Northern Hemisphere.
Okay, Beto. What happens now with the pre-orders, the pre-sales in Europe?
We have healthy pre-order sales. The volume of these pre-order sales, we are already producing those. I'll talk a little also about the capacity gains in our production. Historically, we produce historically from the pre-sales about 25%-30% to Europe. This year, we got a bigger basis. 50% of our production is from the pre-sales in Europe. This is going to be shipped to Europe. It's being produced and shipped as we speak.
This is going to be in the inventories in Europe's. Inventories to be available for the selling, for the sales, for the season. From the operational point of view, our iLab program is very positive right now, and we see that getting better. As you saw, the service levels was already much better than previously we had. The mixing center will start to give benefits, to provide benefits. There is a period for a ramp-up, of course, which is a critical moment. Europe is guaranteed they have their replenishment guaranteed from this initial of the operations. In Brazil, we have better service levels, and we have the capacity for peaking, for the fractioned orders and support our strategies for the specialized channels.
Ramp up in Brazil in the first quarter next year, and maybe to grow that when we go into the summer in Brazil next year. The mixing center is a reason for happiness for us right now. We see the embedded technology that it has, the new team operating this mixing center. Several benefits here. Another benefit here goes into the improvement for our manufacturing capabilities. We already can see those benefits popping up in the fourth quarter, specifically in Brazil. We will have a better capability for manufacturing to guarantee inventory. This is also, of course, going to help the international operations. We have the factory of Santa Rita that recovered quickly from the fire we had.
Santa Rita is the factory where we produce the smaller volumes and the most specialized and premium SKUs. I was there, and I was impressed with the recovery. They actually are able to produce smaller volumes with a higher level of efficiency, so this is going to help us in the growth in the beyond the core. For the beyond the core, we're not capturing all the entire benefits for the iLab. Basically, for the sandals, we are flat. We are growing 30% in the international. From next year on, we are going to have more capability to grow in Brazil, in beyond the core, especially in sandals, and accelerate this growth in the U.S. and in Europe. As I mentioned earlier, there is a large demand for sandals.
I hope this is going to help us in this new mix, as I mentioned to you. The new technologies we are bringing are going to allow to make the flip-flops more premium, which is an important part inside our RGM and in the mix portfolio. In the specialized channel in Brazil, it's an important focus for us. We have nowadays an internal structure. As Julián described it to us, we have a new commercial structure, both for the food channel and for the specialized channels. We have a new area of operational excellence. We're going to see activities happening this fourth quarter. We are going to have novelties.
When you go to the points of sales, you're going to see new displays, new executions for our sales, and we're going to be advancing strongly in the specialized channels, expanding the direct and our OTIF capabilities, our OTIF capacities, on-time-in-full capacities. This is the evolution. We are evolving in two fronts. The services with more segmentation and services to them. We are also using this new approach of more frequent drops. This is extremely important for the specialized channels, both in Brazil and in the international businesses. The demand in the international this is something interesting. The demand for the specialized channels is very similar in Brazil and abroad.
The focus for the specialized channels is this one, a portfolio with better segmentation and a strategy of more frequent, collection drops and products that are going to help us to create this more premium aspect inside our portfolio. The three points. I think I've covered the three points. Have I answered your questions?
Yes. I think you have, Beto. Thank you.
Joseph, thank you for your question. We are going to finish here our Q&A, and let's go on now to Beto's final message.
I would like to thank you for your time today. We are still convinced of our thesis for mid- and long-term business. In 2022, we're going to have a very strong focus in this last quarter in growing our volume in EMEA, PAC, and in LATAM businesses and the distributors markets, we see opportunities in all of those distributing markets in Brazil. We have a pressure in volumes. However, we had a growth in the revenue.
We are working on needs, but we understand that this depends on macro effects, specifically in the purchasing power of our consumers, specifically in the food channels. We're working hard to protect our healthy EBITDA margin. Havaianas Brazil is showing this evolution in the gross margin. There was an increase in pricing. We're working in the correction of the route in the USA. We believe that in 2023, we still will be ongoing with this transition, but I will bring you up to date on that in our next meeting. We are convinced. We are also sure of our medium and long-term strategy for Rothy's. Our growth continues. Our brand Havaianas still has a lot of competitive advantage, and we see a combined potential with Rothy's.
Rothy's now on this path to profitability, and we will update you on these news in the next release. I thank you for your time, and I make myself available, me, Julián, and my team to have this individual and face-to-face contact in case you want to. Thank you all. Good morning.
Good morning, everyone. The investor relations team is available for you, for any questions you might have. Thank you all.