Good morning, and thank you for waiting. Welcome to C&A's conference call to announce the results of the first quarter 2022. Today we have here with us Mr. Paulo Correa Jr., CEO, Mr. Milton Lucato Filho, CFO, and the company's IR team. This conference is being recorded, and all participants will be in a listen only mode during the company's remarks. After which, we will open the floor for questions, and at that point, further instructions will be provided. Should you need any assistance during this conference call, please press star zero to reach the operator. This conference is being simultaneously translated into English for the convenience of the company's international investors. The conference is also being simultaneously broadcast online via webcast, and it can be accessed at ri.cea.com.br, where you can also find the corresponding slide presentation. Feel free to flip through the slides during the company's remarks.
The replay will be available shortly after the end of the call. Before proceeding, let me mention that any forward-looking statements that are made during this conference call are based on the beliefs and assumptions of C&A's management and on information currently available to the company. They involve risks and uncertainties because they relate to future events and therefore they depend on circumstances that may or may not occur. Investors should understand that conditions related to the macroeconomic scenario, industry factors, and other factors could also cause results to differ materially from those expressed in such forward-looking statements made during the call. Now I would like to turn the conference over to Mr. Paulo Correa Jr. to start his presentation. Mr. Correa Jr., you may proceed.
Good morning, everyone. It's a pleasure to be here once again to announce the results of the first quarter 2022. This was a quarter that once again showed a very strong initial recovery of the company. The Q1 was still impacted by the COVID-19 pandemic, particularly the month of January. As we saw the number of cases dropping and some of the restrictions being lifted over the course of the quarter, we started to see a very different dynamics, a very different sales dynamics. Our sales started to increase. As you can see on the first chart on the left side, on the left top corner, we see the growth of our merchandise revenue compared with 2019. We started January 2022 at 9%, and in March we reached 20%. It's important to note that this means an 18% growth in apparel versus 2019 and 61% year-over-year.
In electronics or Fashiontronics, we had a similar performance to that of 2019. We went back to the same levels of sales of 2019 and a 58.8% increase year-over-year. These two first numbers clearly show the evolution of the company's growth. What we see in the start of the second quarter is a positive trend or the maintenance of this positive growth trend despite all the uncertainties of the macroeconomic scenario. We continue to see a very favorable performance in C&A and consistent with the chart that we show here. It's also important to show that we are also seeing evolution in our gross margin for merchandise.
Compared with last year, we were able to recover our margin in more than 4 points, and we are now closer to the pre-pandemic levels despite all the inflationary pressures that we have been facing in terms of costs and materials. This has been a very successful journey, finding competitive prices that are allowing these sales to take place, and we are also seeing the recomposition and recovery of our margins. It's also worth noting that the online revenue, although the comparison basis that we have is still very challenging, we saw an increase of nearly 50% to a very expressive growth which shows that our online operations, our omnichannel operations continue to clearly evolve within this context. Now next page.
Here, I want to share with you something that we have been talking about since our IPO, which is our value creation agenda. This is exactly what we can see in this quarter. While on one side we are starting to reap the fruit of all these seeds that we planted and we see how we are accelerating despite all the challenges posed by the COVID-19 pandemic, we start to see the first results of these levers, and we start to see that we are taking our sales to another level, and we continue to advance in each of the levers that we established. One of them was the expansion lever. We had two new openings this quarter. Now we have in total 319 stores, and we will continue to open new stores.
Right now we are already at 323 stores as of today. We will continue to see new openings. The growth plan that we established of 20-25 new stores per year is absolutely on track. I think it's worth noting that this is something that happened last month. We had the inauguration of our ACE format at the Anália Franco Mall. It's the third double door that we have in the country. We have one in Campinas, one in Fortaleza. This is the third double door ACE store, and it has been extremely successful so far. We are seeing some very important milestones being reached. In 2021, with the ACE brand only, we had about BRL 450 million in total revenues. This shows the strength and potential of this specific category looking forward.
Now on the next slide, the second lever that we established was digital transformation. As I said, our gross revenue was up nearly 50% year-over-year for a total of more than BRL 200 million in this quarter. I think that the greatest contributor to these results is our continuous focus and our very good analytical capacity to understand our customer base and to create dialogue, and channels that are more and more relevant so that we can be more and more assertive and productive in the way we relate with our customers. We are doing better and better understanding the preferences and the desires of our customers to target our promotions, our products, and our fashion content.
As a result, our active online customer base, despite the reopening of our physical stores and the lifting of the restrictions, we still saw the expansion of our multi-channel customer base. It has practically exploded. We are at nearly double what we had, and we are now seeing this change in customer spending because our multi-channel customers, they spend nearly 100% more than the single channel customer. This allows us to have a deeper and deeper relationship with these customers. Our program, C&A e Você, is still very strong.
We have surpassed 20 million customers registered in our relationship program, and this relationship program is the platform that we use to be able to precisely connect all the channels of the company, whether online or marketplace or WhatsApp sales or now, and now more recently, C&A Pay, but you'll hear more about C&A Pay later. It is also worth stressing how strong the relationship dimension is through the use of the Sei Aí, Você platform, and one of the channels that's benefiting the most from this program is WhatsApp, because our sales consultants are more and more being able to bring very relevant content, very interesting content to this customer base, and we are seeing an increasing evolution through all the investments in technology that we made.
This is allowing us to quickly respond to our customers, and provide them with much better service. This will result in a higher recurrence level and a higher spending level of all these customers that have this relationship with us. What we are seeing now is that the spending is increasing about 14% per customer year-over-year. On the next slide, I will talk about the third value creation lever that we established, which is supply chain. We have had as the basis for this effort, the modernization of our operational model. For example, now we have the push-pull modality, which is becoming more and more mature, which allowed for a reduction in stockouts, and this is contributing to our assertiveness and to our sales per se.
In parallel with that, we are expanding and advancing in the implementation of the RFID technology. We now have RFID in 214 stores, which covers 80% of the company's sales. The first very clear impact of the use of RFID is that we can have a much higher accuracy. We are now reaching accuracy levels that are compatible with the benchmark levels in our category over 95%. This high accuracy will make the online journey more and more assertive because customers, when they are accessing online, they actually have access to all the inventory in all our stores, and that's why this will lead us to a higher conversion rate than we used to have in the past before these technologies were implemented. At the same time, we're also very proud of the quality of our
of the delivery of our online orders. Our e-commerce distribution center is truly best in class. It is now 100% operational, and this is helping us improve our level of service. Our delivery, for example, for São Paulo, more than 90% of our orders are delivered within two days in the São Paulo territory. This month, we will start using the delivery in up to two hours in some parts of São Paulo, the capital city, and Rio de Janeiro. We have expedited delivery in up to 2 hours, which is better than any of the other experiences that customers find in our category. This allows us to increase our speed, so we are being able to deliver all throughout Brazil in up to 2 days, more than 50% of our orders, which is also a very high standard for our category.
This shows that we are executing. And implementing successfully all the things that we were establishing and creating since the beginning, since our IPO, with a lot of consistency and great quality to our customers. Finally, this is the fourth lever, and I think that quarter after quarter for this lever, we have been having the opportunity to share with you all the evolutions of this new product. Let me just remind you that we started our private credit operation in December last year. We launched C&A Pay on December five last year. Now we're very happy to announce that we reached the first 1 million cards in a little less than five months of operation. This shows the excellent acceptance of this product among our customers, and this is fantastic.
This also shows how right we were when we designed and we established the operation format for this service. That is why we are seeing these very good results very naturally with no forced acceleration. The default levels are absolutely under control. They're even better than what we were expecting. Because we have a very strong team, and we have a very well-established governance model, this is what allows us to, using elements such as our risk committee and our credit committee, although we are navigating in a very adverse macroeconomic scenario, we are still being able to bring very positive and concrete results to our business. As an additional piece of information, our average credit limit is about BRL 650, and this is a private label card, so customers spend 100% of this amount in C&A.
The average ticket of C&A Pay, as a consequence of that, is about 60% higher than the other sales of the company. This is the rationale, and the evidence that we need. This is what proves that this lever is allowing us to change the growth and the sales levels of our company. Starting in the Q1 , we started to work with new products that aim at higher profitability levels. We have the Bolsa Protegida and other products that we're going to be launching this year. Our credit offer, when we combine the Bradesco partnership with C&A Pay, reached 20% of our sales in quarter one 2022. We are now starting to see the first concrete impacts of all this work in a very short timeframe. Surprisingly positive.
This is surprisingly positive to all of us. I just showed you the evolution of our forming levers. We are absolutely on track, absolutely within what was planned and expected, and they raise the level of competitiveness of our company despite all the restrictions and all the issues posed by the pandemic. We are now much more robust and much more prepared for the growth to come in the coming quarters. The next slide is about Mother's Day, an event that is taking place this week. This is a very important time of the year for us. We have seen a very interesting performance levels in Mother's Day, and this is an example of how the company's communication is currently very well integrated using its several digital channels and physical channels.
This is what provides the unity and the consistency of the messages we convey and the clarity of what we are trying to achieve. I can't go without saying that we have had a lot of assertiveness in the evolution of our collections. For all of you who are attending this call today, please visit one of our stores to check for yourself how our products are evolving. We are getting very good feedback from our customers, either based on our sales or on surveys that we conduct with our customers. We have very positive feedback about our collections and all the products that we are launching in the past few years. Mother's Day, we're totally integrated. This is a very promising period, and I'm sure we'll have a very good story to tell later on after Mother's Day.
Before I hand it over to Milton and before he gives you more details about our financial results, I would also like to say that we have published our 2021 yearly report. In that report, we describe clearly what are our ESG commitments by 2030, and I would like to take this opportunity to highlight the four main pillars that we're working on in this sphere, and we will update you on how we are advancing in each of them. The first one is the use of sustainable raw materials. We have a target of at least 80% of sustainable raw materials by the end of this decade. The second objective is to promote diversity and equity. Our target is to have at least 60% of women working in our company.
This is already a reality today, and this is something that we truly value. We want to increase by 50% the participation of indigenous people, Black and brown populations in managerial positions. We are working more and more strongly to form a very diversified team and to develop this diversified team so that they can occupy leadership positions. The third dimension, which has been a highlight, is promoting circularity. The principles of circularity, we have as a target to include circularity principles in at least 50% of our products. The fourth objective is to reduce plastic-related pollution. We want to replace plastic with more sustainable alternatives for at least 50% of the volume that we produce today.
To ensure that we are going the right direction and that we have the right focus, we expanded the scope of our human resources committee, and now it is called Human Resources and Sustainability Committee. Now it is responsible for advising the management, the managing board in the strategies and all the activities related with ESG. This means that we will improve the clarity and the governance of this work that has been a focus for us for a few years now, and now we're going to do this in a much more systematic, and structured way. Now I hand it over to Milton, our CFO, and he will present the quarter results.
Thank you, Paulo. It's a pleasure to be here with you today. Before I start presenting our figures for this quarter, I think it's important to put you into context about the dynamics of this quarter. This quarter was highly impacted by the seasonality of our business, and we had the high inflation rate, which is actually attenuating or hindering somehow the recovery of our sales. You heard what Paulo said about the cost offenders, and when we look at our P&L, we know that it is somehow obfuscating our sales volume. Our total net revenue was up 54% this quarter, reaching BRL 1.2 billion.
As you can see on the right side here, the combination of apparel, Fashiontronics, and merchandise, there was a 59% increase in the revenue, and the same store indicator was up 53%. Very robust growth year-over-year. As you also heard from Paulo, it's worth noting that apparel also showed very impressive growth rate, reaching 19% compared with the first quarter of 2019. Fashiontronics, when we compare with 2019, it was slightly positive, and this is the first quarter that it happened since the start of the pandemic. This means that all the signs are very positive, pointing towards an acceleration of the company's top line.
We here in the management, we are in line, and we know that this growth is due to the quality of what we provide to our customers and also the very good execution plan of our value creation and growth levers. Other revenues are composed mainly of financial services with BRL 72 million, up 6.1% year-over-year. This was due to the start of operation of C&A Pay and also the sale of our receivables from the Bradescard partnership. This was the line about our top line. Our gross income this quarter was BRL 567 million, 62% increase year-over-year. The merchandise gross margin was 45%, 4.2 percentage point increase year-over-year, and 0.7 decrease compared with 2019.
We're going to talk about the highlights later in the comparison with 2019, but I think it's worth pointing out this evolution. For apparel, the margin was 51%, a 4.6 percentage point increase. This is impacted by the weaker comparison base of the first quarter 2021 due to the pandemic. Our pricing strategy, on the other hand, is showing its relevance here. In Fashiontronics, which includes beauty, the margin was 19.5%, a 1.1 percentage point increase, mainly due to the increased share of the beauty area of the beauty category. As I said here on the top of this chart, we see that the gross margin for merchandise is recovering. It will continue to recover, and we will close the year better than we closed 2021.
Right now it is still slightly below the pre-pandemic levels. Next slide. Our operational expenses without depreciation amounted to BRL 570 million, up 47% year-over-year, and we're going to give you more details about the reasons for this increase. Sales expenses were BRL 442 million, a 28% increase. It's important to highlight here that we have 22 additional stores that bring new expenses when we compare with the first quarter of 2021. The accumulated inflation for the period was over 11%. This is another offender in this system. This impacts mainly our personnel and occupation cost lines. Our online operations, despite maintaining a practically equal share, it grew by more than 40%. In G&A expenses, we had a 151% increase, reaching BRL 127 million.
We have to look at this with moderation because we have to disregard the impact of the reversion of some labor contingencies last year amounting to BRL 41 million. When we adjust by this effect, the actual increase would have been 38%. In this increase, we also have to consider the first quarter of operation of C&A Pay, which accounted for an additional BRL 9.6 million in expenses. The operational leverage indicator, which considers operational expenses over net revenue, was 47.6%, a 2.4% improvement year-over-year. Here we have to consider the advancement of our levers and the top line. Of course, there's a restructuring cost implied here, and they don't move in the same speed.
As I already said for previous quarters, we have to be really firm in the sense that we need to ensure the continuity of our investments, both CapEx and OpEx, and direct these investments towards what's actually generating results. This initially creates some imbalance and some operational inefficiencies, but this is just in the beginning because well, I as the CEO of the company, I am fully confident that we are doing the right thing now and that we will reap the results in the future. When we look at our adjusted EBITDA, it is still negative. It was minus BRL 107 million, but still better than quarter one, 2021. We have some consequences of our growth plan, which is still ongoing, and this causes some mismatch between expenses and revenues, at least initially.
Over the course of time, it will become more efficient. Also, we have the inflationary pressure, and this is something that we have to manage from both ends in pricing and also a more efficient cost management. Now looking forward, we expect to go back to the pre-pandemic EBITDA levels in the end of 2023 or early 2024. This is our projection for our EBITDA. Now, regarding our net income and margin, in the first quarter we had BRL 152.7 million in loss. This was due to the 79% increase in our financial expenses due to the increased interest rates. Also the carryover of our loans, the adjustment to the present value of some supplier related debt and the monetary correction of our payment to Bradesco for the Bradescard partnership.
As for our investments, we invested nearly BRL 56 million this quarter. As you heard from Paulo before me, the greatest investments in our levers had their peak in 2021. The investments in Q1 2022 are 21% lower year over year. I think this is the time to structure and to build. Actually, we had to structure and build this work, and now we will start seeing the results. This is the end of the presentation today, and we will now open for questions.
We are now starting a question and answer session. We will take questions from investors and analysts only. If you have a question, please press star one. If at any point your question is answered, please press star two to remove yourself from the line. The questions will be answered in the order they are received. Please, we kindly ask you to pick your handset up when asking your question to provide optimum sound quality. Please wait while we poll for questions. If your question is not selected now during the call, it will be answered later after the call by the IR team of the company. The first question is from the webcast platform.
Hello, good morning. The first question is from the webcast platform. It is from Carlos Herrera. He has three questions. The first question is: How do you see your default rates during the transition period of the partnership with Bradesco, the default rates will impact C&A's results, or are you still just a middle party? The second question is: How do you see the SG&A dynamics for the rest of this year in terms of revenue percentage?
The third question is: Are you suffering any pressure from the competition? Hello, Carlos. Good morning. Thank you for your question. Let me answer in the order you asked. Default. The default rates of C&A Pay are still very low, and that's because we are still building our customer base. We have a plan on how we're going to build this customer base. Right now the default rate is totally in line with the expected and still very low. We will need more time to wait for this base to stabilize and to identify the profile, but right now the default rates are very low and irrelevant. They're very low and irrelevant.
Now, when we look at the Bradescard partnership, we are going through this transition period whose purpose is to maintain the relationship that we have with Bradesco. This means that we are still sharing 50% of the results and the combination of the revenue coming from that customer base minus the default rate and minus expenses, the result is divided by two. We are co-participants of this default. What we are seeing is an increase in default. However, the bank is very diligent and has taken all the measures to neutralize this increase in default, so we don't see any relevant impact on our results for now. We talked about the sale of our portfolio, of our customer base in the Bradesco card partnership.
There's some synchrony between these movements which allowed us not to feel any relevant impacts on our results this quarter due to the higher default rate. This was the answer to the first part of your question. The second part about the SG&A, I talked about this in my presentation, but we're not yet at the desirable level, but this is necessary. As the quarters go by, of course, this percentage will decrease because of course, there will be an increase in our top line. The first quarter was the least efficient until it reached the Q4 . Quarter four will be the most efficient. We will see this ratio improving quarter after quarter.
Of course, it's also up to us to take the necessary measures, and you know that we're very good at that, to go back to the efficiency levels that we need. Because this inflation rate was not. We didn't consider it would be so long, it would take place for so long. We need to accelerate this efficiency to compensate for that. The third part of your question about the competition, I think Paulo can answer that question better than I. I think that the competition dimension is as expected. I think everybody's trying to evolve and deliver a better proposition. Right now I don't see anything different or anything abnormal happening in terms of an additional pressure coming from the competition. Today, our product offer and our price competitiveness are very good.
Our services, the services we provide through our channels are also very strong and competitive. Right now I don't see any different pressure from the competition. Ladies and gentlemen, if you want to ask a question, please press star one. This question and answer session is now closed. Now I would like to hand it back to Mr. Paulo Correa for his final remarks.
Thank you all for attending this call. Thank you for sharing our confidence in these results, and we can see the positive impact that our value creation levers are bringing to our business. Of course, we understand that the high inflation brings on an additional challenge, but I think the company is vastly experienced when it comes to managing its profitability.
This process that is taking place right now, it was expected and foreseen by all of us except for the inflation portion of it. We are showing some very good results. Our customers are happier and showing a higher and higher spending levels. For the rest of this year, we will certainly be seeing even better results quarter after quarter. I'd like to thank you all, and I'd like to thank our team, which has made an incredible difference. Thank you all for attending, and have a great day. C&A's conference call is now closed. Thank you all for attending, and have a great day.