Good morning, everyone, and thank you for your patience. Welcome to the video conference for the release of the 1Q25 results of Grendene SA. Just a friendly reminder: those who require simultaneous translation, that we offer this function on the platform. To access it, simply click on the interpretation button through the globe icon at the bottom of the screen and choose a preferred language, either Portuguese or English. Anyone watching the video conference in English can mute the original audio by Portuguese and by pressing the Mute Original button. Please note that this video conference is being recorded and will be made available on the company's investor relations website, ri.grendene.com.br, where the full earnings release material can be accessed. This presentation is also available for download via the chat icon, including in English. During the presentation, all participants will have their microphones turned off.
After that, we are going to start the Q&A session. To ask your question, go to the button on your screen and click on the Q&A button, then input your question. When your name is announced, a prompt to activate your microphone will be shown on screen, and then you must activate your microphone to ask your questions. We highly recommend that you ask all of your questions at once. We emphasize that information in this presentation, along with any statements made during the video conference regarding the business prospects, projections, and operational and financial targets of Grendene, is based on beliefs and premises of the company's management, as well as information that is currently available. Future considerations are not guarantees of performance. They involve risks, uncertainties, and assumptions because they refer to future events and therefore depend on circumstances that may or may not occur.
Investors should be aware that general economic conditions, market conditions, and other operating factors may affect the future performance of the company and result in substantially different outcomes for those stated in such look-forward statements. Today, we have with us the following company executives: Rudimar Dall'Onder, Chief Executive; Gelson Luiz Rostirolla, the COO; and Alceu Albuquerque, CFO and Investor Relations Officer. Just like the company's key managers, I will now give the floor to Mr. Alceu Albuquerque. Mr. Alceu, if you please. Good morning, everyone. Thank you for being with us today in this video conference to release results of the First Quarter 2025, first term.
Let me start by telling you about the domestic market in the first quarter, and we've observed that regarding consumption, as I'm going to mention in a few minutes, we've seen a reduction in the sellout both from the market of the first division as well as Melissa. This sellout reduction is very much influenced due to all the uncertainties from consumption and consumers due to high inflation and high interest that keep fewer resources for any other items that are not the essential ones. Shoes and accessories are involved. Our sellout in December was below expected, and that made our clients and retailers with inventory that are above average. Because of that, we have a weak sell-in in January. In February, we have a withdrawal in the sell-in as well, but it was not as intense as we've seen in January 2024.
In March, we started having a recovery, but the weak sell-out in December ended up being impacted in a negative way, all the portions in January and February. What was the performance of the first division that we have, all the Melissa brands? Gross revenue goes 8.7%, and volume falls 21%. We can see it is in a higher intensity, different than those from the revenue, that we have seen a growth in revenue pair by pair. This growth is represented that we have price readjustment that we have in the beginning of the year in order to have the impact and the payroll, and that is impacting us from January. We have new products to have more added value. We have seen a drop in all segments except for the kids segment that had a quite positive performance.
We've seen a withdrawal in the sellout, especially regarding the distributors' channel and an indirect channel that represents 4% or 5% in the sales in the domestic market. In the meantime, they have a very interesting sellout. Inventory of our retails that work with division one, even though they started this year on very high levels, as I mentioned, during a weaker sellout, and because of requests for replenishments that were also smaller than the previous year, we can see that inventory now is regular in March. That opens opportunity for new orders for the second quarter. Melissa performance, we can see that in division one, we have seen a decrease in sell-in, but growing the gross revenue in more than 4%. Revenue grows 14.4% and volume withdrawal 5.7%. That represents a growth on the gross revenue per pair of 21.9%.
This growth, just like we saw in the branch for division one, is a result of price readjustment to repass inflation. It is also a result of commerce of products that have better added value. We've seen a growth in sell-in in all channels that we deal with to our products, both in the franchise, in the Melissa clubs and multi-brands, e-commerce that has grew 12.3%, and also in Melissa gallery. Speaking of e-commerce, I'm going to mention that we've seen a growth in using the omni-channel. We have enabled omni-channel and we improved 11 percentage points, improving the access to our clients. They are experiencing more convenience. We closed the quarter with 419 Melissa club stores, which is even higher from 409 in March 2024. For e-commerce, we had a better year. GMV was BRL 18.5 million.
Volume was BRL 8.7 million, so GMV is even higher than volume. That matches what we saw in division one and Melissa. We've seen a growth in revenue. Number of sessions can reach BRL 15.7 million. We have a 17.5% growth. We're still bringing more clients to our stores. Gross margin moves on 2.3 percentage points to 69%. Recurring EBIT grows 14.3% to BRL 2.1 million. General penetration, especially online sales over the total sales in internal market, grows 1.1 percentage points from 5.7% - 6.8%. When we see Melissa specifically, we have a better participation in the online sales. Melissa sales represent 15.2% of the total sales in the internal market. In the first quarter last year, we had a percent all of 13.5%. Moving on to foreign market exports, we have international market.
It's not that different from the one that we observed in the internal market, meaning high inflations, high interests. They are still restricting consumption and impacting on demand, especially in the U.S. and in Europe. Even though we can see disruption in the maritime routes, because we've noticed many delays in delivery and port emissions that have been affected, that have affected market supply, because now we have to book to unload. The vessel either does not load our vessel or they, because we know that we have many factors together, or they don't make berth at that port. That ends up impacting other markets because markets are seasonal. We know that, especially now that we are loading and shipping for Latin American countries or North America, the speaker correct himself, and northern hemisphere. We are shipping items for the summer in the northern hemisphere.
When we miss the shipping opportunity, it ends up compromising the replenishment of these markets and therefore the launch of new products, because any day that you miss, there is a delay in the whole chain of this seasonality. There are also, we know, the geopolitical tensions and trade barriers, even with these very challenging scenarios. Protectionist measures and international conflicts have created a robust growth because gross revenue is 35.8%, volume 21.1%. We see a revenue growth not because of price readjustment, but also they have better commerce of products and better added value. This growth can be justified by shipping new products that bring more added value due to expansion in exports. We see a recovery on export in Colombia, Paraguay, and Peru.
We have the currency factor that ends up helping our exporters because the dollar was 18% stronger in the first quarter when compared to the first quarter in 2024. That ends up helping our exports when we see the revenue in BRL. Even when we look at export in dollars and, of course, eliminating this currency effect, we can see a 17.3% gross revenue growth. Of course, we have the impact of a weaker base in the first quarter last year. When we compare the bulk in the first quarter to the first quarter of 2022 or 2023, we were lower. We can see a steady recovery with growth of 1.4 percentage points, given that our volume has grown 21.1% and regarding volume of Brazilian export has reached 14.1%.
You see, based on this performance of the internal and external market, our numbers have reached 25.3 million units and a withdrawal of 10.5%. This is focused on internal market, and it withdrew 19%. As I mentioned, we have a drop in internal market from Melissa and the other brands in the division, but the impact was more intense of the division one. For export, we've been growing 21.1%. Gross revenue reaches BRL 705 million. It's a growth of 6.5%. Even with a drop of 10.5% in volume, we were able to grow 6.5% in revenue because of the gross revenue growth. The drop is 1.6% in internal market, but we've grown 35.8%. Gross profit grows 9.6% to BRL 263.5 million, and the growth margin comes from 44.6% to 46.7%. It's a gain of 2.1 percentage points.
This gain in margin is taking place even with the impacts of payroll that have added regarding costs and manpower, added about BRL 5 million. Recurring EBIT is also going positive. It's BRL 96.5 million, almost 7%. This recurring EBIT margin reaches 17.1%. When we see the growth, it's from we have BRL 159 million, and that represents a net margin of 28.3%. Moving to the next slide, we have the gross revenue, and we've reduced we have a reduction. The volume in internal market reduces our revenue in BRL 103.6 million. Price makes the internal market add BRL 95.1 million in revenue. When we see external market volume, it grew BRL 28.3 million in revenue. The price per pair and EMIS reduces in BRL 5.1 million.
When we look at the effect of the currency, we had 18% weaker when compared to the dollar in the first quarter in 2025. Currency adds BRL 28.3 million in revenue. When we look at our components in the cost of goods, so when we compare with the first quarters, we left from 2.1 in 2022 from 37.9% when we had a very strong impact to 46% in the first quarter in 2025. That represents, as I said, we have 2.2 margin. All components of CPG, we have COG, we have a reduction, and it brings more representative in the net revenue in 22.3% to 21.2%. We have observed instability of the raw materials with prices because of this technical acceleration in economy, which is the demand for the PVC rising in the international market has decreased.
That has helped the behavior of our main raw material. Manpower, it's still stable. It decreases 0.1 percentage points, representing 21.6% of net revenue. Other factory costs, they reduce 0.8 percentage points compared to the first quarter of last year. When we look at net revenue and cost per pair, another way of studying our costs, we can see that net revenue per pair decreased 16.8%. The growth is 12.3%. We could readjust our prices, not only the prices, but to grow our net revenue because of the price readjustment or because of commercialization of products with higher added value. It's superior of the cost per pair.
When we observe in a long term, when we compare a growth in medium term per pair in the first quarter of 2022 to the first quarter of 2025, we can see the net revenue per pair growing an average of 7.2% per year, while the cost per pair grow an average in this period of 1.8% per year. That shows our capacity to increase our net revenue per pair in higher levels than the growth of components that make our cost per pair mix. Our operating expenses in this quarter, we have a different relation to the other quarters, the previous ones. This data, we have acquired 100% of GGB last year. The results of GGB were just in one line, just in equity methods. Now GGB expenses, they are consolidated, and they will be part of every single line of our results.
Look at our total operating expenses. They grew 45%. When we look at our operating expenses, excluding the impacts of GGB, we have a growth of 17.2%. Our operating expenses ex GGB, they were BRL 133 million, and they go to BRL 156.8 million. When we eliminate the non-recurring items, the growth is 11.2%. Here, this growth, it is really well. It is concentrating in two aspects. The growth of the licensing that we pay related to the kids' line growth, which is a line where we work with our licensings. We had a license that was really successful. From this variation of BRL 16.8 million, BRL 2.1 million come from this increase in the payments of licensing taxes fees. Another strong influence in this BRL 16.8 million are the expenses with payroll and remuneration of payroll and salaries.
Looking at our EBIT, recurring EBIT, as I mentioned before, it grows 6.9%, leaving BRL 9.3 million to BRL 96.5 million. When we look at the impacts of the non-recurring items, BRL 48.7 million. Out of those, BRL 7.5 million, BRL 44.7 million are related to GGB. And inside GGB, we have separated into two items. The first one, it's a total of BRL 20.8 million, and it refers to it's a non-recurring item inside GGB related to the acquisition of 100% shares of Radar. When we acquired the share of Radar, we had this deal that we would close all the retail stores of Melissa in the United States. This is why I have here the cost of shutting down the stores and the reevaluation of the inventories. And this result came to our financial statement because we acquired 100% of GGB.
When we made this deal with Radar, part of this sum will be deducted from the price of the last parcel that we have to pay to them, that installment we will have to pay to them. That will happen in December 2025. A relevant part will be discounted from the price we are going to pay. We will have a reduction. BRL 23.9 million are the operations, regular ones of GGB. This BRL 23.9 million now, they represent 100% of the GGB result. When we compare with the equivalence that was coming from the first quarter of last year, about BRL 15 million, we remember that this BRL 15 million, they were relative to 49.9% of GGB because this was the share we had at GGB. The total result in the first quarter last year, considering 100% of shares, it was almost BRL 30 million.
With the adjustments we did in our structure, the results in GGB in this first quarter went down from BRL 30 million to about BRL 24 million. There is still space to reduce even more, to have more adjustments. Here are the items that have impacted our recurring EBIT and the GGB. It is included. The commissions we paid either in Brazil and in the U.S.A., the commissions paid by GGB are included here, just like site costs, storage, licensing, and advertising. That is the EBIT. This major EBIT variation is justified by the impacts of GGB that start to consolidate our statements. This impact, we are comparing oranges with apples. That will happen in every single quarter of this year because last year, as I mentioned, GGB was just impacting the equity method. From next year onwards, we will have a better way to compare.
The financial results from BRL 88 million, it moved, had a growth compared to last year because of a CDI that's a higher 1.7 percentage points increase. And because of balance applied, we have BRL 1.8 billion compared to BRL 1.5 billion. The growth is wrong here. It's 35% of the financial result. And we do a management adjustment because of we have about BRL 605 million invested in projects of development in real estate. These real estate development projects, these investments are done through major instruments as SCPs when they are when this is when the results come directly. And when we do through holdings, the results, they will come via equity method. And equity method, it will impact the EBIT and the financial and not the financial result. But as these investments are investments from our cash, net cash, they will be considered financing investments.
This is why we made this adjustment. In the first quarter, the investments in real estate and the via holdings one, they brought a negative result of BRL 1.5 million. This is why they reduced the accounting financial result of BRL 88 million to BRL 86 million. This portfolio that we call investment committee, we started that in 2019. Since the beginning, this portfolio has been bringing us an accumulated profitability of 301% of the CDI, 182%, I mean. Here, the destination of the dividends, we had a result in the period of BRL 113 million. We have BRL 52.8 million reserves of fiscal incentives that will leave us BRL 60.5 million for legal reserves. We have destined BRL 3 million to the legal reserve.
It is left BRL 57 million to pay dividends that will be paid 100% ex dividends in an amount of almost BRL 0.06 per share for the shareholders that have Grendene shares since the 15th of May 2025. Since this day, the cut-off date, they will be ex dividend. The payment will happen on the 29th of May. Finally, as we like to show, we pay as dividends since the beginning. Since we became a public company, we are paying BRL 67.5 million this quarter. Since the beginning of becoming public, we paid BRL 6.3 billion. No, it is not corrected. If we correct according to the IPCA, it will increase to BRL 9.6 billion. If we go according to the IPCA, it will go up to BRL 13.3 billion. What I have to say about the first quarter is this, and now I am open for questions.
Now we're going to start the Q&A session. If you want to ask a question, you'll have to click on the Q&A button on the bottom of your screen and write your question to be on the queue. If you are announced, a prompt to activate your microphone will show up in the screen. You will have to activate your microphone to ask questions. We ask you kindly to write all your questions at once. Let's go to our first question. Good morning, Alceu and equipment team. With this decrease in the petrol value, can you expect the decrease in raw materials, amounts, and the costs also for Grendene? Thank you for your question. What we have observed is that the prices are historically under the average, historical average, and that's been helping us in the past quarters.
In the short and medium term, we can see a possibility for reduction, but we don't know if these levels will keep up in the medium and long term because, as I mentioned, we can see quotations below the average, historical average. Next question is from the Investment [Henan Uriki] investor. What measures the company has taken to reduce the losses with GGB, and what's the deadline to operating zero net profit? Thank you for your question. Basically, this is a year of transition. We acquired the shares last year. So the first quarter, we had many adjustments, especially related to expenses and infrastructure adjustments and closing stores in Melissa. They used to give us a major loss monthly. Throughout the first quarter, we closed down the stores. We shut down the, we disconnected most of the people, the leaders from GGB. We made adjustments.
The structure of expenses and costs, we have been expanding our commercial sales. The focus of GGB before was related to the growth in the online channel, and we continue doing that. It is a very relevant channel. The wholesale, it is a very important channel also, is where we get the big volume. We are focusing more on that. Related to the breakeven, I would say that 2027, 2028 are the years where we expect to reach the breakeven. The losses we had, if they will recede in 2027, 2028, that is when we think we are going to get the breakeven of the operations. Next question is from investor Renato Ferreira. Hello, Alceu. Thanks for this opportunity. I have got two questions.
The first one is related to the allocation of soul that Grendene has distributed as dividends as maximum as it can and as related to rebuying shares. Apparently, it does not look like there is a lot of margin to do so. In the option of reinvestment capacity in its own business, apparently, it will not exist major needs because of the production capacity. What is left related to the cash that cannot be shared? Are you going to still apply the money in retail? I mean, what is the perspective of allocation of efficient capital of the company? What investments? Renato said he had two. That is the first one. In fact, we distributed in 2021 or 2022 of BRL 1 billion of incentives reserved because we won a lawsuit that said that the company could distribute this cash that has been built to the incentive reserves from ICMS from taxes.
We still have a balance to distribute out of that. We have not done so because after that BRL 1 billion distribution, we had many disagreements with the Superior Court related to the taxation of ICMS, including the law 1409 from last January. It made clear that even though we are discussing legally, this law says that the ICMS incentives must be taxable. First, this process is still ongoing. We do not have the deadline, it is being deferred. Our lawyers, even though many visions came up from the government relating to the ICMS incentives, tax incentives, are telling us that we have arguments to be able to distribute this balance, the incentive reserve balance.
As I mentioned before, as we had many misunderstandings, we want to wait for the legal judgment, for the final decision of the law, to have a more clear decision if we can distribute this balance and to mitigate the risks of legal fines and etc. We have a very high cash. The board approved in 2019 that the company can invest up to BRL 800 million in alternative assets. As I demonstrated in our presentation today, we have BRL 600 million invested in this alternative asset. The total is related to real estate, and they are being very profitable. I'm going to show you some of our projects in real estate projects. They gave us 230% of the CDI, so it's a very good profitability.
The company will keep these resources in cash until we are more clear in relation to the judicial, the lawsuits, legal actions we have. We still have BRL 250 million to invest in development projects in real estate that will bring us superior profitability than we have been observing in traditional bank titles as CDBs. Thank you, also. Continuing to the second question of Renato related to the demographic trends and the Brazilian consumption. What is the Brazilian market representative to Grendene? Let's say that the country in the next years or decades is aging, having less young people and more elderly people. What is your opinion related to this topic? What are the strategic actions you have defined for that? Again, thank you for your question.
We have been following up this trend not only related to age demography, but all other trends, and we have been reinforcing our offer of products for this age population. In some examples, the Cartago line has been developing products specific for this age target. Another concrete action that we have taken, we took four or five years ago, is when we licensed the brand Azaleia from Vulcabras. That is a brand that this public target audience is elderly people, female people. From the licensing of Azaleia, we have expanded our offer of products for a female audience, older people. Also for the male audience, we have the Cartago line. We have been developing products for that specific age target. Thank you. Now we close the Q&A session. We would like to give the floor to Mr. Alceu Albuquerque for final considerations.
Once again, thank you so much for your presence, all of you, and thank you for your questions. I will leave my channel open, the IR team, so if you have any questions, you can contact us. Thank you and have a great weekend. The video conference related to the first quarter of 2025 of Grendene is now closed. The IR department is available to answer any other questions. Thank you for all the participants and have a good day.