Good morning, ladies and gentlemen. Thank you for waiting. Welcome to Via Varejo conference call to discuss the results for the third quarter of 2019. This event is being broadcast via webcast, and you can access it at www.viavarejo.com.br/ir, where you will find the respective presentation. The slide selection will be controlled by you. There will be a replay for this call on the website. The press release with the company's results is also available at its IR website. This event is being recorded, and all participants will be in listen-only mode during the company's presentation. After Via Varejo's remarks are completed, there will be a question-and-answer session, and further instructions will be given. Should you need assistance during this call, please press star zero to reach the operator.
Before proceeding, we would like to say that forward-looking statements made during this conference call are based on beliefs and assumptions of Via Varejo's management and on information currently available to the company. Forward-looking statements are not guarantee of performance. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Via Varejo and cause results to differ materially from those expressed in such forward-looking statements. With us today, we have Mr. Roberto Fulcherberguer, CEO, and Mr. Orivaldo Padilha, CFO and IRO. Now I would like to turn the floor to Mr. Fulcherberguer.
Good afternoon, everyone. I would like to thank you very much for participating in our conference call about the results. This is our second call. We have been here for the past four months and a few days. If I were to translate what I'm feeling, considering everything that I have seen in these past few months and the future of Via Varejo, I would say that I am very excited. I am excited, all of us are, about what we are seeing here. We see a company that has way too many challenges and hard challenges ahead of us, but as all good retailers, we see that the assets that we have for the future are much greater than the challenges that we will face. These assets, in less than four months after we arrived, they are already changing Via Varejo's path.
We intend to show you today the transformation process that this company is already undergoing. In not much time, we have been able to do a lot. Also taking this opportunity, also important, as we said in our material fact, we are in an internal process of investigation. We put together an investigation committee months ago. In a transparent fashion and in line to the best governance practices, we will let the market know about the results of this process. So far, we have not found any wrongdoing. Transparency is a value of this management and will be at the core of all our initiatives. Now, I will turn the floor to Padilha. He will talk about the figures in this quarter, and then he will turn the back floor to me. And I will tell you a little bit more about what we are doing and what we'll be doing.
Okay, good afternoon, everyone. Thank you very much for being with us for this third quarter conference call. I will turn to page two, where we have our main highlights in the quarter. Remember, this was the first quarter under the new management. A lot of us started during the quarter. Many of us are not in here throughout the whole quarter, and this was an intense process. We here had our action plan for our initial diagnosis. Our gross revenue has reached BRL 6.6 billion, 8.7% down vis-à-vis 3Q 2018. A special highlight here to 1P. We were 32.9% lower than the prior year. We will be talking about this deceleration, which was on purpose. We also maintained a strong growth in 3P. In the marketplace, almost 80% growth.
Gross profit, also, we will go into the details here, but we believe that we have been able to increase the margin of the company and find that balance in this beginning here. On the last highlight on this page is a robust cash position of BRL 2.8 billion. On the next page, number three. On the first block, we have our gross sales with a drop of BRL 631 million vis-à-vis the first quarter or the third quarter of 2018 because of two main aspects here. The reduction in the sales volumes of our 1P, once again, which was on purpose, and also because we had to eliminate BRL 500 million of inventory this quarter, which have been sold at cost price, and that had an impact of BRL 300 million less in total sales, total gross sales.
The stores maintained the same level, and the online had a drop of almost BRL 580 million of BRL 1.713 billion in 2018, 24%. I'm sorry, we have lost the sound. I'm sorry, we cannot hear anything at this moment. We just clearly show you what is the level of the third quarter of 2018. Last year, we still had the fiscal or the tax benefit that no longer we have this year. It's called Lei do Bem, the law of good, that would improve the impact of the gross margin in 2.6%. Last year, we were working with an inventory level that was BRL 1 billion higher than the level that we are working on this quarter. The company, and because of that increase in purchasing last year, had BRL 1.7 billion in gross revenue, additional gross revenue.
If we were to adjust to the same basis of this year so that we could compare that to the third quarter of 2019, the best comparison would be a level of 25.9% in 2018 against 30.7% in 2019, a significant improvement in the gross margin of the company. We also have to explain that in this quarter of 2019, we had that fire sale, BRL 500 million in our inventory. If we had not done it, the real level of margin in this quarter would have been 33.7% and not 30.7%. I would say that we are at a cruise speed. The recurring level of gross margin in the company is between 31% and 32%, 33%. About expenses, the company was stable vis-à-vis the same period of last year. We have here to consider the loss in sales, basically explaining the growth of expenses percentage-wise.
The EBITDA, 6.6% last year, 4.3% this year, BRL 421 million last year, BRL 242 million this year. When we analyze the same effect explained in the gross margin and the gross profit, we can see that last year, the right margin that should be compared to the margin of this quarter would have been 2.30% and not 6.6%. Not considering the inventory sale, the margin would have been 5.40%, showing therefore the potential to generate not only gross profit as gross margin and EBITDA, but also the potential that Via Varejo has of increasing the company's profitability. In the next page, number six, we have our debt and net cash. In this quarter, we worked to strengthen or reinforce the cash position in the company. We have been well succeeded here.
We have ended with a robust position with BRL 2.8 billion in cash. Also, we had an opportunity in this quarter to accelerate our monetization plan for tax credits. In the next chart, net debt, basically, we had here a transfer or replacement of debt with suppliers. Then we switched that to bank debt, and that's why we had BRL 440 million-BRL 2.1 billion. Net cash has been already explained when I explained gross cash, but also a robust position. Here we have more cash than bank debt in this end of quarter. On the next page, we have a relevant highlight. We have taken over the company with very high inventory levels, over BRL 5 billion, almost 60% of those with low turnover. This was an important effort of the commercial area of the company, the operating area as well. We have been well succeeded here.
We have reduced, in BRL 1 billion, the inventory levels of the company. If we compare that to the same quarter last year, that is the equivalent of 20 days in inventories. About the beginning of the quarter, we have reduced around BRL 500 million. That's very relevant because it has not only an impact in terms of cash, but also it allows us to have inventories with highest turnovers, therefore with better margins. In the next page, a summary of the main highlights of the quarter. We have concluded the integration process of Cnova. The tax integration and the system integration, which allows us to have inventory and operations integrations, especially with internet sales and click and collect, and collect in the stores. Also, substantial reduction of BRL 1 billion in inventories, marketplace growth of 79%, gross profit that was significant.
The EBITDA normalized growing five points, and the strengthening of our cash position. Roberto now is going to continue the presentation.
I will tell you a little bit of what we have done in the past three months. Here we now have a team that is totally new. We had the reinforcement of our cash. We are rebalancing our inventory. We now have been able to see a better market share. We already have a digital turnaround in course. It's in already advanced steps, and a strong management operations in our stores. On slide number 10, we have ran a quick diagnosis and also quick action plan, and immediately we started the turnaround of this company. We did not have a lot of time to perform a huge diagnosis and an action plan, but we have been very assertive in what we have done.
Just as fast as we started the turnaround, we went back to doing retailing, and I will explain in this presentation what, in my point of view, is going back to doing retailing. On slide number 11, we have recovered the operating capacity of our brick-and-mortar stores. We have empowered our sales reps so that they could serve consumers with ability and power to close deals. We have operated, and we have worked on the stores' layout so that they could be more promotional, and also with a winning atmosphere at the stores. Over 600 stores did have air conditioning problems. A 80% of these 600 stores already have the problem addressed, the other 20%, we believe that in the next quarter date, that type of problem will be fully addressed. By the end of the year, 100% of the stores will be with air conditioning.
We have exchanged over 7,000 computers in the stores that were old, over 10 years of use, and that has improved the stability of the system and also an improvement of the reaction time. These machines, these old machines, were impacting the reaction time and also the efficiency of our sales reps. We have chosen 200 main stores so that we could revitalize them. These are the stores that were in the worst conditions and also that had a greater selling potential. On the next page, we have an example of what it means to do this type of revitalization and what kind of stores we had. We have changed storefronts, so our stores were not really present for our consumers. On page 13, we have another example of how the store was in the past.
This store that you see here is not much different from the reality of many of other stores. We have worked on the storefronts. This is not a major investment. We also worked on the store lighting. We added the banners, and we also had to work on some ceilings, and in some stores, we had to work on the floors. We have switched over 20,000 chairs. Our consumers and our teams did not have chairs to sit down and hold a good negotiation. On slide 14, we have a before and after. We have also reviewed 100% of the IT and back-office infrastructure of all the stores. To the left, we see a rack where we have all the connections of the store network to our own cloud. We had a lot of instability.
You cannot see in the picture, but there is also a fan to cool off this rack. This is not a random picture. This was also the reality of most of our stores. To the right, we see the after. We have a new energy grid, the new rack with the equipment of the store, and the store is already refrigerated to support overheating. This allows us to have a huge stability. Most of the instability that we had in the brick-and-mortar stores, that was less of some systemic issue and more of a brick-and-mortar physical issue. On slide 15, in terms of logistics, we have changed the way we supply the stores and the way we deliver products to consumers. We would have one truck out to deliver to consumers and another one to replenish the store. This was unproductive.
The truck would not be at its full capacity when it left. We brought together these two activities in a single truck. We were able to supply the store not once a week anymore, but rather 5x a week. We have a relevant gain in terms of inventory level, because I do not need to have an extra inventory in the store. I can run the inventory on a daily basis. Our stockout rate, we were at 9%. Now we are at 3.9%. We have removed BRL 500 million in inventory. We have strongly reduced the level of stockout. We're not happy yet. We have some homework to do. The fact that we're supplying five times per week also brings a lot of benefits, increasing the click and collect. On the next slide, we have some numbers about it. Slide 16.
Click and collect, when we closed the third quarter, was 27.2%. If we focus on September only, it is 32.3%. When you focus on October and November, the number is growing very significantly. Efficiency of click and collect brings us gains in negotiation with a significant impact on our hits on the website, conversion increase online, and also a significant decrease in our delivery costs. It's important to mention our click and collect is present in 100% of our stores. Today, all our stores have the capacity to provide click and collect to our consumers. On slide 17, a couple words on deliveries. Here we can see something very significant. Some of our competitors are already flying at cruise speed for a couple of years now and celebrate about 40% of deliveries within 48 hours. Us, in three months, went from 26% - 47% within 48 hours.
A 100% of everything we sell at the company, 47% of 100% is delivered within 48 hours. Not only that, we also increased within 24 hours from 7% - 28%. Here we can see a huge potential, significant improvement to take place in the coming months, and we're going to have even better conditions. The main benefit is that everything happened without increasing logistics cost. All we did was to optimize our logistics structure with a lot of gains of efficiency by bringing even a slight reduction. The best is yet to come. On slide 18, we already implemented in the DC in Curitiba, WMS Manhattan, one of the top WMS in the world when it comes to DC management. We're already trying in Paraná with huge gain of efficiency and productivity.
Right now, we're not going to roll out for all DCs owing to the Christmas season and Black Friday. By 2020, all our 14 DCs will have WMS up and running. We have a lot of gains to grab from this strategy. On slide 19, a couple of words on our digital evolution. Doing retail is also making tough decisions. We had to make a very tough decision in 1P, but we were convinced that losing sales at that time would be the best that could happen to the company, thinking in the long run, and also thinking about our relationships and respect with our consumers. After the integration with Cnova on July 1st, we experienced new programs related to the integration with serious implications on deliveries and the level of efficiency when it comes to consumer service.
We made the decision to decrease the sales in 1P. We're going to show a month-on-month reduction in the coming slides on slide 20. In the meantime, our IT team worked very strongly overnight, and they implemented over 100 improvement packages, reducing by 31% the loading time and reducing 37% our heavy pages online, with improvement of 14% in our conversion rate.
We are extremely confident and fully convinced that we are definitely ready to support Black Friday. We're going to see 1P sales in the next slide, and we explain why we're so confident. On slide 21, by channel, our app keeps on evolving. In October, 14% of penetration in app sales, and we are deeply encouraging. The number of installations increased by 56% October vis-à-vis September. The number of retention of active user is growing by 25%. It's not only installation that is growing. Active users are also growing. We still have a lot of things to do in the app. Lots of room for improvement. On slide 22, we show 1P growth. We've already been through the valley, that was in August. It was the worst time ever for 1P.
In mid-September, we were already having great signs of our 1P growth and very confident about our online strategy. We started our sales from -51% to -7%. Unfortunately, I cannot anticipate the numbers for October and November, but I can say that in October, we had very good growth. In November, we expect to see outstanding growth online. When we were in the valley, it's important to say that our commercial team online was being set up. Today, we are with a full set of online team, both in terms of performance, commercial activities, and we're fully ready to post strong growth in 1P and 3P alike. What about 3P on slide 23? We didn't have the same challenges that we faced with 1P, considering that sales are outside the company. They happen here, but the whole logistics happens outside the company.
We sped up, we boost 3P, and in 3P, within the improvement packages, we also improved 3P. We also implemented a new CRM. Today, we can have 100% of tickets, and we couldn't see and visualize the delivery tracking vis-à-vis consumers in 3P. From the moment customers ask questions, we had a question mark in our minds. We couldn't give any answer. Today we can do it. Another improvement, a reduction of 80% the loading time from sellers posting, and we want to be very strong at 3P, and we are working very hard in this direction. On slide 24, we show GMV, consolidated GMV. Posting growth of 8%, pretty much supported by 3P. In October and November, 3P also keeps growing very fast. I'm extremely confident that we'll deliver an extremely good Black Friday.
Our current platform, after the improvement packages, was set and making us comfortable that we can scale up sales in this platform. Now we have plenty of conditions as of Black Friday and 2020 to scale up our online business very strongly. In parallel, we're going to develop what will turn out to be our new online front line. We've been through a strength in brick and mortars and also a strength in logistics. We're dominating the sector. On page 25 now, let us talk about Black Friday. Like I said before, we are very confident that we're going to have a great Black Friday in 1P, 3P, and brick-and-mortar store. Our Black Friday campaign is a breakthrough. We'll be very innovative, unprecedentedly. It will be completely new. I cannot share detail because I know competition is listening to us.
We cannot anticipate anything, but we already designed, for instance, the Casas Bahia brand with a song, which is already being sung by our consumers as they get into our stores. We are going to take this Black Friday to ourselves. Speaking of communications on slide 26, here we have another picture of a support pillar of our company. Despite everything that happened in recent years, everything that is happening vis-à-vis consumer relations, for the 14th time, we are top of mind in furniture and home appliance stores. We still have a strong bond with our consumers, and we're very present in their minds. We have a revolution in our communication in order to further enhance our footprint. On page 27, this is the change in communication with a strong reflex and impact online.
We are already the most associated brand in Google in telephony, furniture, and home appliances. This gain of image happens both online and offline. On slide 28, we renew soccer for 2020. Soccer is a property of all Brazilians. We have all audiences, different social brackets. It's in our interest to launch soccer in our platform. TV Globo news station did some significant changes in the soccer package allowing us to be extremely innovative in the way we'll be communicating about soccer, both on and off. We're going to have a big mix of channels when it comes to soccer. On slide 29. When we began our project, soap opera, this is also property of ours. No retailer in our segment can get into this property. We already started to do 360 degrees strong with consumers during these actions.
I don't know if you all watch soap operas, let me explain you a little bit. You have Maria da Paz, one of the members. During the plot, this character was thinking about buying a fridge, sometime in the soap opera, she thinks about a real store. One of our stores begins to interact with our team, as magic, she gets into our stage in a non-disruptive manner, she begins to interact with Fabiano, our poster boy. She does the payment book, as she walks out of the store, our break is over. She gets into the soap opera again, in the soap opera, she mentions to friends about the sale she has just performed. We have all internet searches, both of our brands and also our partners.
From the moment it happened, we had a lot of success and hits with our songs on the web. Social media was very important, and now we have the numbers of growth that happened behind these actions, 900%, 77%, 799%, and 2,500% of growth week-on-week. On slide 30. About our data intelligence, more than 60 million registered customers, which is another gain of this company. We began to use, and we design several relationship strategies with these customers, and we can already measure the lifetime value of each one of the 60 million customers in our base. Plenty of opportunities. On the next slide 31. This is a snapshot of this kickoff of use.
Our email marketing actions already show opening 16% higher compared to the past, + 7% orders and + 12% conversion rates. Just a small example of whatever is yet to come behind this optimization. We already started exclusive offers of products and price to our consumer base on our knowledge of them. Over the coming weeks, we'll begin to offer product price and different interest rates for each one of our consumers. With our digital optimization, like I said, we keep on improving on a monthly basis. In terms of website hits, September vis-à-vis June, 26%, October vis-à-vis July, 30% growth. This is happening with significant gains in ROI and also a significant drop in our cost of goods sold. We are on the right track. We are far more efficient, bringing more consumers home. On slide 33, I'll be talking about another strength of the company.
It's about the commercial evolution with the industry. That's a strength. It's our quota, be it owing to our current volume or our current capacity to have strong, transparent relations with the industry. We already recovered that. We were very agile with big suppliers, which hold 80% of our revenue. We had meetings in Brazil and abroad. We already had several long-term negotiations, which will guarantee our strong supply for year-end and for 2020, and also support our margin gains. On slide 34, let me talk about another strength, which is the credit operation. We already started a pilot study in CDCI online and digital signature in some brick-and-mortar stores. We will continue this pilot study until we feel confident enough for the rollout, and that's a window of opportunities. We can start seeing the credit operation online as well. That's very disruptive, by the way.
We found a way, and we already deployed in our service system, our sellers cater to consumers' needs, an alternative so sellers don't have to say no. They don't deny credit to consumers, rather they tell in what circumstances the customer would be approved. We have a lot of intelligence behind our machine learning. When we have the individual taxpayer number, we have the credit history with us and in the market, and we can also let him know how credit would be approved in the future, maybe with a smaller payment, a smaller time. We try not to say no to our consumers, rather create options for him to take credit with us. We're strong in credit operations, and we are already increasing our penetration in credit operations. On slide 35, banQi. It is ongoing at 70 stores.
Our intention is to have the rollout for 100% of our stores. Our expectation is to do that until December. We stop right now owing to the Black Friday event, but we have very good prospects for the rollout this year. On slide 36, let me talk about another very important asset we have, which is our people. We resume PROVE, which is our service excellence program. It is already under 300 people right on the field, working and training our whole sales force throughout the country in order to provide excellence in service. This program provides training for excellence and also is ready to recover good salespeople who are not performing so well. We also have another program, Coming Back Home. The idea is to pursue great salespeople who left Via Varejo because they didn't agree with our model and now are working with the competition.
We opened a campaign so that these great salespeople and managers come back home. We are very successful. We already have a significant number of people who are leaving the competition, trusting our project, understanding we turned the game in the brick-and-mortars, and they're Coming Back Home. On slide 37, that's an image of a meeting that we held in São Caetano gymnasium. In this gymnasium, we gathered 3,500 employees face-to-face. This is our whole team from São Caetano and part of Bartira's team. In addition, 100% of other employees of the company were also there with this online training. We also had a strong participation online. The whole team got a very clear message directly from us and to all levels of the company. We made it crystal clear where we are, what we found, what we're doing right now, and where we're heading to.
Today, 100% of people who work for the company know precisely where we want to be. Not only that, we are having all these people engaged with a sense of ownership. Each one is the owner of the process, of their area of the company, and it takes an attitude of ownership. I have no doubt that we managed to have a lot of engagement in this meeting. In addition, during the last 60 days, Abel, who is our CEO, traveled countrywide, personally talking to 100% of our store managers, 100% of the store leadership. Making it clear the message of where we are and where we're heading to, and also the sense of urgency and ownership that we all want everybody to have. In this event, we launched the # VAI VIA. This is our transformation plan, and I am on page 38.
We have a consulting service helping us. We also have over 2,000 initiatives ongoing right now. We are validating the initiatives so that up to the end of the year, we can roll those initiatives out and put them into action, defining what is the capture value and the curve of benefits that we will have in the company. Now telling you a little bit more about the future of this business. We are all here very excited about the future. We have excellent assets in-house, and in a very short period of time, we have been able to carry out an important transformation, and the whole team is engaged. I'm sure that we'll turn this game very quickly in the online area. We have already started, I would say, and we'll be able to show that now on this Black Friday.
Well, now I would like to open the floor for a Q&A session, and I will come back with my final remarks at the end.
We'll now open the Q&A session. We would like you to ask all your questions at once and wait for the answer from the company. To ask a question, please press star one. [Thiago Macruz] from Itaú has a question.
Good afternoon. This is actually [Emerson]. I have two questions. First, you mentioned that you had 11 stores in the quarter. Do you feel confident to keep on this expansion plan for stores? Do you feel safe to open stores since you have opened 11, while at the same time you are already with initiatives in your existing base? My second question, yes, I understand that you want to drive sales, and we have seen a robust growth in the credit operations. I'd like to understand how do you intend to increase integration and to add more services with banQi? Can you give us more updates on that?
Thank you, [Emerson], for your question. About expansion, we are comfortable with our expansion plan for next year. I think we have a map with relevant potential areas to go into. More than that, there are areas to be occupied, not only in terms of brick-and-mortar stores, but also regarding new store functionalities, which now for us are logistics. More than ever, the store is not only a store, and that is a major competitive advantage that we have, because we have larger stores and literally, we have mini hubs. Over 1,000 mini hubs all over Brazil. Therefore, we see the possibility of having a better occupation in Brazil, both in terms of stores, and because of sales, as well as stores in terms of mini hubs of deliveries. About banQi.
Yes, we have an opportunity there to do something different, but we would not like to say anything right now. We will be very much prepared in December to talk about banQi's strategy.
Thank you very much.
Tobias Stingelin from Citibank has a question.
Good afternoon, Roberto, and congratulations on what you have been able to do in such a short period of time. We see things are going the right direction, really you need sales to pick back up, right? In the e-commerce, it's clear, especially what you have been in 1P over the third quarter, and now I think in the fourth quarter, we start seeing a more positive result. Thinking about brick-and-mortar stores, and despite of all adjustments you have made, sales were low. Considering that you were very aggressive, to have a fire sale, part of sales have been benefited by an aggressive strategy there, and the inventory that you had to sell. I would like to understand that also in brick-and-mortar operations for the fourth quarter and the next year, considering marketing investments, now you have a balanced inventory level.
I would like to understand sales now and what can be done in the short term?
Hello, Tobias. Thank you for your question. Actually, in this quarter, I think there was even a miracle to have this performance because the stores had a lot of problems, instability for sales in the system because of everything that I have shown. As everything started recovering, we also improved. We have over 1,000 stores, 20,000 people to bring back on track. We have to lift up everyone's morale because that was not the case before. I would tell you that we are on the right track. We are moving forward. Every week we are recovering. We expect to going back to selling more also in the brick-and-mortar retail. Yes, we do expect to grow in brick-and-mortar stores as well.
Obviously, in the online, we will have an exponential growth, but in the brick-and-mortar, we will have a more controlled growth. The inventory now is at the level that you wanted. You made all the adjustments needed. Marketing is already coordinated to your inventory level. Everything should be working now in the fourth quarter. No. Working hand in hand in the areas. Well, in the inventory, we still have some cleaning to do. That will be happening now on the Black Friday. I can tell you that I am much better provisioned in my inventory levels, but we still have a few problems to address. In the marketing, we are already accelerating our efforts. There are way too many innovations out for marketing. Yes, it will make all the sense to going back to grow because everything is running well, and the inventory will be well-oxygenated in the short term.
Okay. On the online, you had a sequential growth, and it makes sense. About Black Friday. Black Friday last year, that's when the problems really arise. If we compare the sales for Black Friday of last year, you will be able to understand it. Does that make sense to think like that?
Hi, Tobias. Yes, it does not make sense. What happened was that on last year's Black Friday, a lot was sold. Sales were good. The problem was that we were not able to operationalize the sales made. We were not able to deliver. We lost orders. It was a chaos. We did have a good number of sales. The prices were unbalanced because they dropped all the prices randomly. What we can expect for this year's Black Friday, yes, we want to grow with a better margin balance because we have a well-designed commercial strategy. I will give you a guidance here. Our logistics team, when they hear me, actually, they will jump up their seats. Actually, we are committed to doing 100% of our Black Friday deliveries in one week. The average of retail is to turn that regular from 20-30 days.
For Via Varejo, we were able to work on it in months, last year's Black Friday, and we do have our internal commitment to turn that regular. We are so confident about the level of service that we already have today that we believe we know that in one week we'll be able to address all Black Friday's deliveries, and most of that will happen in the first 48- 72 hours.
Okay, my last question. You already talked about the top of mind is strong brand. Are you measuring NPS? How is the consumer perception right now? You have shown the pictures of the stores. Are you being able to check that, how the perception of the brand is evolving?
Yes, Tobias, we are measuring that every week, and we are having relevant gains. The consumers have seen the change. For us, that's very clear. Consumers have seen that there was a huge change, and I would say that we are in a great path to recover our image. About those consumers that didn't think so. We know that we have lost some of our clients. Considering the level of engagement that we see now, I would believe that's going to be recovered. Also, we have seen improvement in official forums that measure complaints from consumers, such as Reclame AQUI. Consumers are seeing that the online service, marketing, stores serving.
Okay, that's wonderful. Congratulations again. Thank you.
Irma Sgarz from Goldman Sachs has a question.
Good afternoon. I have many questions. I would like. By the way, thank you for all the detail that you gave us. I'll ask two questions. The improvement that you mentioned about logistics for 48 hours, within 48 hours, what is the percentage of delivery? I would like to know what effectively changed in logistics. Was it just to fix the system or transfer information control? Any effective operational change? What about the future? If you think about Marketplace, which obviously is growing a lot and becoming more and more relevant, how do you envisage the balance between 1P and 3P? Do you believe that you will have to increase the range of services for 3P or for 3P sellers? Maybe that's not a focus in the first moment. Thank you.
Irma, thank you for your question. Good afternoon. First about logistics. There are some attractions here. Firstly, we are using the best of our assets. We are working. We started working three shifts in DCs, so 24 x 7 in DCs. In addition, like I said, we also mix delivery to consumer with store supply. At the end of the day, we have maximum efficiency of the trucks, and the frequency is much greater without increasing the costs. I guess these are the main points that we changed in logistics. In addition to systems enhancement, which also happened, and also our mode of operations in the warehouses, we had dramatic changes. Answering your second question, as for Marketplace, 3P and 1P, we are not going to restrict the growth of 3P.
We want and will be very strong in 1P, and we see 3P as a strategy, so to speak. We're going to broaden the range of the mix with categories that are related to our business, that are additional to our business, to complement our business, so we can beat the competition. We are on this track right now. In the mid-run, considering the logistics power that the company already has, it's not something that we have to start from scratch. It already exists. I believe that we won't have to wait long so we can deliver unique service to our sellers, and therefore bring unique service to our consumers when it comes to delivery. Maybe in a short time frame, perhaps we can work full time to our sellers in many SKUs and categories.
Thank you. Just to confirm, what about the flagship in e-commerce to you? Is it Extra website or maybe Casas Bahia's website?
The three of them are doing great. They're all recovering. The three of them are recovering. If I were to choose one, Casas Bahia, it is standing out more strongly. We also have a strategy for the three of them.
Thank you.
Sandra Nudo from JPMorgan has a question.
Good afternoon. Thank you for taking my question. I have actually two questions. The first one, it's clear that you're making a lot of changes to the store, what else do you still have to do? If you think about the current platform, what do you still need in terms of investment in time? I know it's hard to measure, what do you still need in order to have the model as you want up and running? The second question about investment and state changing strategy. What about marketing for the future? The level of the third quarter, what should we expect to see in Q4? What do you intend to have in 2020 and down the road? What are the changes in the market strategy considering the new commercial positioning? Thank you.
In terms of infrastructure online, it goes as follows. The first good news is that we were not convinced on day one, but now we are convinced. We are fully convinced that the current platform, with another adjustment package that is already in progress, after the seasonal period, after Black Friday, everything will be deployed. We have no doubt about the potential of multi-channel that this platform will give us. We're not considering heavy investments, just improvements to the current platform. As for investments in the new platform or the new huge improvements to the platform, as we speak, we are working on this planning. We cannot give you much color right now, how much this will take of investments. We're just beginning to work on the budget, our milestones for 2020.
Maybe in Via Varejo Day in December, maybe we can give you a preview. Maybe on December 17. We'll be ready to talk about that certainly in the beginning of next year. With regards to marketing, I don't know if I got your question well. You wanted to know about the progress and the evolution in marketing, right? How should we consider marketing expenses? They're very new strategies, right? Unprecedented at a company, but I believe it entails additional cost. Our marketing investment, what we are not going to post a lot of growth in terms of investments. What we'll do is to give more efficiency to what we already do. We have been spending quite a lot of money. In some methods of online method, taken up a lot of cash, and it was not so assertive, so we dramatically changed it.
Now we are renegotiating with all our suppliers. We had a great package now with global digitization. We still have a lot of things to do in our customer base with CRM, and this radically minimizes the cost and investment in marketing. Being very straightforward, I don't expect to see significant increases in our marketing investments.
Great. Thank you.
Thank you.
Pedro Fagundes from XP Investimentos also has a question.
Good afternoon, everyone, and thank you. I would like to follow up on a comment regarding the store's revitalization. You said that you have already mapped 200 storefronts so that you could work on them on the next few months, maybe not this year. Do you have an estimate that you could share with us about the level of investments for these renovations? On how complex are them, and if you have a potential impact estimate in productivity that you might tap into after those renovations?
Hello, thank you for your question. About the 200 stores that we mentioned, it has already been done. They're ready. We concluded the renovation process. They are already operating and operating well for the next year. Right now, we are also considering the budget for the next year, we are analyzing what type of renovations we will need to do in our total stores. We'll have that information further ahead. Unfortunately, we do not have that yet. I can tell you that to work on these 200 stores that we have worked on, the investments were low. Obviously, in some of the stores, we will have to invest a little more. We believe that in most of the stores, we'll be able to have a low level of investments.
We already have a plan today. We are still monetizing the plan and checking how much it's going to cost. Actually, the plan is ready. We just now have to monetize it.
Perfectly, I understood. The 200 stores that you have already worked on, I know it's not much time, but did you measure impact in terms of store productivity?
Well, yes, we have measured that. These stores are operating for short periods of time, but we did see relevant gains and two-digit gains in the stores that we have renovated.
Perfect. Thank you very much.
Thank you.
Bob Ford from Bank of America has a question.
Good afternoon, congratulations on your call. Can you tell us the nature of the accounting allegations that you have received? Also about Black Friday, how do you feel about the competitiveness regarding assortments and price in general?
Hello, Bob. This is Roberto. I will talk about competitiveness first. Okay, thank you for your questions. Obviously, Black Friday is challenging for everyone in retail. The price seasonality is strong. We are prepared for this Black Friday. We have negotiated it, and we feel confident. We know that we will go to this Black Friday selling a lot with no major problems. 90% of our inventory for Black Friday is already in-house, and it's already in the distribution process. Being very straightforward, yes, it's going to be competitive as it always is. We are very well prepared in terms of competitiveness. There is a drop of margin for this period of time, but we are not counting on a significant drop of margin for this period because we have prepared ourselves very well. Now I'll turn the floor to Padilha.
Bob, thank you for your question. About the material fact, everything that was found is there. That's what we said. The investigation has not found anything real, anything material, vis-à-vis the allegations. This is work that is ongoing, so as soon as we have anything new, we'll come back and communicate to the market. So far, really, that's what's on the material fact. That's what we have. That is nothing.
Padilha, would that be an indemnification if that were to be related to the prior controller?
Well, as I mentioned, as we have published in the material facts, this was an allegation that has not been proven so far up to this stage 1 conclusion. We will have a stage 2 of this investigation. This is ongoing, but we are not considering any type of indemnification so far. Because also the investigation has not found anything wrong so far.
Thank you very much.
Gustavo Oliveira with UBS has a question.
Thank you for taking my question. My first question is about a sale, a big sale. What about same-store sales from brick-and-mortars this quarter? Is it inventory sales? It was not so clear to me. Could you give us more color, please?
Fairly speaking, the BRL 500 million basically sold at cost, so it's cost of goods sold. I cannot tell you the market share. If I didn't have BRL 500 million as problem, I would have the solution, and maybe I could have sold BRL 1 billion, so I cannot do the math. Ratio for approximately BRL 500 million of inventory between BRL 900 million and BRL 1 billion sales. Undoubtedly, our sales, if we didn't have BRL 500 million problems, but BRL 500 million solutions, undoubtedly, we would have sold much more.
That's clear. Second question. Despite all that, you said the margin would be much higher. But, you stock with a sale of 1P. I imagine that the margin was slightly lower as well. Maybe this also helped with the margin that you mentioned, a normal margin of 20%-30%. You also said that the margin in Black Friday may not be affected by the negotiation with suppliers. What I want to understand, in this strong comeback in 1P sales, in addition to Black Friday, what about the impact on margin, the gross margin of the operation at large? The margin is much lower, and competition pressure is much higher. Correct me if I'm wrong.
Gustavo, considering 1P is already significant, and it will become increasingly more significant to our business, we cannot count with this option of 1P margin being significantly lower than 3P margin. Our expectation is for 1P maintaining levels close to our store, our brick-and-mortar store margins. What I can tell you, and not just to be on assumptions, in October and November, we already post growth in 1P. Sorry, I cannot give you any figures right now, but we are also having core margins. That's all I can say.
Got it. Now, with this comeback of 1P, are there any categories that are more competitive vis-a-vis the whole competition? I would like to understand how you pursue the 1P sales. Everybody is speeding up, so I'd like to understand how you expect to have this comeback. Did consumers have a pent-up demand? What about digital marketing? How are you working on this, on this comeback?
Well, we don't have specific categories. We are targeting everything that is already our strength. There is no doubt that we are acting very strongly long-tail with SKUs that are not part of our daily routine, but they will be at 1P. For instance, tires, diapers, other SKUs. We are ready just about to strengthen this long tail. We're going to be very strong in the core of our business. No doubt about it. It's our obligation, our duty, and we also want to be very strong in long tail, which has a direct impact, answering your first question about profitability. Things are more balanced as we have a stronger long tail. We know it's possible, and we already started. We're not just about to start. We already started. We are far more active in long tail.
The new team that took over in the commercial area is very much focused online. Intelligence, commercial operations, several online segments. The team is fully focused on making things happen in all categories.
Just one last question, if possible. I guess in the last conference call, you talked a lot about negotiation with suppliers in long-term contracts, maybe one year, according to what's possible in the industry. What about the progress of these negotiations? Have you met one year, or for the moment, you're only focusing on Q4, and you still have a lot of gains to be captured over time?
Gustavo, great point. Like I said, this is our core business. We were extremely welcomed by the industry owing to this strategic vision, the long-term view that we are giving to this business. We also have credibility with the industry. We're confident in the sense that we are waking up from long-term strategies, and we will deliver. I can say that our negotiations are ongoing. We've been very successful. We already closed many long-term deals. Some of them are still being negotiated, no concern. Like I said in the beginning, both in Brazil and abroad, we had a fast trip to Korea to strengthen our relations with two partners, and we also had meetings in Brazil with several different manufacturers. Everything is running very smoothly. Thank you.
Thank you.
[Carlos Teixeira Comver], has a question.
Hello, good afternoon. Thank you for taking my question. I would like to have more color about what we could expect to see in terms of improving the cash cycle of the company, and more detail on what you envisage for Q4 vis-a-vis the same topic? Maybe relief in inventory downsizing.
[Carlos], Roberto speaking. Thank you for the question. We can see a trend of improvement in our cash position. Like I said, we still have a little bit low turnover inventory to eliminate in Q4. We will work on this.
We will not go back to our operations of the inventory levels when we took the company over. It makes no sense to us. It does drain our agility. It is not healthy to the company to run with the same inventory level when we took over the company. I guess we already reduced around 20 days. We can either reduce further, but now we're getting to this scrutinizing phase, and it's more gradual now. We expect to have this improvement over different quarters. Consecutive improvements on the inventory rates, but in a more gradual manner.
Thank you.
Ruben Couto from Santander also has a question.
Good afternoon, everyone. Two quick questions. In this process to review all the stores, did you also check the portfolio of categories? In the last call, you talked a lot about furniture, for instance. Do you have any changes in the strategy to change or to adjust to the categories mix of the company? Still on this topic, I saw a few comments on the last call regarding the relevance that the strength that you believe that the payment book has in the company, that level of 11% in sales that we have now, that's what we will have, or should we expect that now in the fourth quarter, this will pick up and maybe go back to the levels, to the 15% that you already had in the past? Can you talk more about that, please?
Hello, Ruben, thank you for your questions. Yes. We already reanalyzed all the categories for brick-and-mortar stores. We will keep on strengthening our furniture line because that line got weaker over the years. We already have everything in-house to grow. We are already increasing our furniture sales, and I would say that furniture will bring the payment book with it. For us, this is a fantastic credit operation because you can have very low interest rates there. I believe two things will happen hand in hand. Strong growth in our payment book in the fourth quarter. I don't know, we have Black Friday now, and there are a lot of opportunities. We have a lot of credit cards there. We have a lot of online purchases, cash purchases. I think consumers get ready and save money to purchase in the period of time.
Our strategy, yes, is to increase our credit operations, but I cannot tell you at which levels we will be. We will try to go to the highest level possible, of course. As I said, we have a lot of intelligence invested in our credit operations. As we work on our CRM, I think we'll be able to provide credit operations and credit by individual tax number. The customer will have a pre-approved credit, depending on the consumer, even they will have a more aggressive interest rate. There are several opportunities to grow in our credit operations. Can you tell us what is the share today for furniture? Can you give us that breakdown within your total revenue? Yes. Let me find that information. It's around 15%-16%. It has increased 1.5 point in the brick-and-mortar stores and close to 10% in the online.
Okay. That's very clear. Thank you all.
Thank you.
To ask a question, please press star one. We now end our Q&A session. I would like to turn the floor back to the company's management for their final remarks.
I would like to thank you all for participating in this call. We are very happy about the volume of questions we had. This shows how interested you are in the company. As I said, I won't repeat myself. We are extremely confident about the turnover in this company. We'll be placing this company back to a special position from which it should have never left, both in the online and the brick-and-mortar stores. I would want to quote the way we end all the meetings we hold here. Let's go out and retail. As good retailers do help us on Black Friday purchase on our website, also in our stores. You're all invited to our Investor Day on December 17th, when we will be providing more details. You have more details on our website, and we would love to see you all there in person. Thank you very much.
The conference call for the results of Via Varejo has ended. The IR department is available to address any further questions you might have. Thank you very much for your participation, and have a nice afternoon.