Morning, ladies and gentlemen. Thanks for waiting. Welcome to Webinar Grendene S.A. relating to the results of the second quarter of 2022. Present here today with us, we have Rudimar Dall'Onder, the President Director, and Mr. Alceu Demartini de Albuquerque, the Director of IR, Investor Relations, as well as the other managers of the company. We inform you that the press release of the second quarter of 2022 is available on the website ri.grendene.com.br in Portuguese and English. We would like to inform that this event is being recorded and it has simultaneous translation into English. During the event, all the participants will be only listening to the presentation of the company, and following that, we will start the Q&A session.
Before proceeding, we would like to clarify that essential declarations done during this presentation about the perspectives and estimates of operations and financial of the business of the company will be nothing more than mere predictions based on expectations of the administration related to the future of the company. These expectations are highly dependent on the conditions of the market, economic performance in general of the country and the sector and international markets. Now, I would like to give the floor to Mr. Alceu Demartini de Albuquerque. Please, Mr. Alceu, you can proceed.
Morning. Thanks everybody for the presence in our video conference for the results of the second quarter of 2022 and the first half of the year. I hope everybody is doing well and in good health. We're starting our presentation.
Before we start with the numbers of the quarter, I would like to mention a few highlights. Qualitative highlights. As we have mentioned before, published before, we are internalizing our master franchisees of Melissa. Our current agreement with the master franchisor that ends in 2024, February. We would like to say that it's not going to be renewed, and Grendene is going to assume the management of this network. What's our objective when we decided to do that? Firstly, is to bring Grendene closer to the final consumer, to strengthen our relationship with our franchisees, to increase our trend capture, to be faster, to understand the behavior of our consumers, and to test new models, new formats of stores.
Nowadays, our franchise network has 387 stores spread in 155 municipalities in Brazil, in 25 states, including the Federal District in Brasília. 174 franchisees that received, in a very positive way, this decision of the company because they understand that Grendene is now closer to the franchisee. It's a very welcome decision. As I mentioned before, we are in this transition now together with the master franchisor, and from February onwards, we are gonna to assume the management. I would like also to talk a little bit about our global brands. We have a structure together with 3G Radar that started the operations in January this year. I would like to talk a little bit about the evolutions we had so far.
In the first quarter, it was the construction of the infrastructure that will assure the growth of the expected growth in average long term. What we have in the first semester is a corporate team that is basically complete. We have a team in the U.S., in China, also in Brazil, structuring all the governance of the company, the committee, the discussion forums, the council, and we are implementing the new IT system. All the infrastructure is practically ready. Speaking a bit about the evolution on the main markets of the company, the performance of the company. In the U.S., we finished the transition for the new logistics operator. Before, who used to do that was Grendene USA. From August on, this transition is concluded.
From August, all the orders from e-commerce as well as wholesale, they will start being executed by this new logistic operator. In the U.S., what we will be served, the division we already had implemented throughout the first semester, the commercial structure for Melissa. Now in the second quarter, we concluded this, which will go on one. Remember, division one.
We have relaunched our Ipanema shop. Now, in this moment of transition, we are transitioning from the old site to the new site. This new shop is active and selling. The 3G team has been gathering since the end of May, beginning of June, with the main retailers to present this collection for 2022-2023, which will reach the market next year. Here I reinforce that the results on the GGB management, we can start watching, perceiving them in a more precise way starting next year. Because the sales on American markets this year, they were made by the commercial team of Grendene last year, according to our commercial calendar, as I explained it in the last call.
Between May, June, July of the year, the team gathers with the purchasing teams of the big retailers in order to present the spring/summer collection of the next year. When these products are shipped to these retailers. Now we can see a reflect of a more direct reflects of the GGB management. We can perceive that on Melissa's website, in our online channel, because in the first quarter grew 6% regarding the first quarter of last year. When we look at the second quarter results, that means 100% more sales online, speaking online. Looking at the first quarter, we can see a growth which is around 130%. This elevation of our performance at Melissa's website is not only in sales, but it's also in qualitative points.
For example, our conversion rate grew 70 basis points comparing to the second quarter of last year. Also, our audience on the website has grown 80% comparing to the last year. We had a very robust, consistent growth on online sales at Melissa. The products of the division one, they are still not ready online. We hired a local team, so we have people in China, from China to support us on the development of these brands. Meaning that it's a matter of local brands, but global brands with a local presence. We have concluded the distribution for Melissa at GGB to acquire their stocks, their shops. We have started Melissa sales on the online channel, also on with the help of TikTok in June. That was due to lockdown.
It was predicted to happen before, but we couldn't do it due to lockdown. That allowed us to start in July, in June, but that was 60% more than what we planned. Now in August, we must start investments in digital marketing at Melissa. We planned that in a very strong way to strengthen the brand. As I mentioned, we relaunch Melissa at Tmall and also the Melissa launch at Douyin. The brands on division one, they must be built. The structure has some additional work to be done when compared to Melissa. That's why both in U.S. and China, like I said, the focus on this beginning was Melissa because of this higher maturity of the brand. Now in the second semester, we started our work to develop, to construct, to build this division one.
Another highlight of the quarter is that we have renewed up to December 31, 2031, the fiscal incentives, the tax incentives of the IRPJ of the Sobral unit, where we have a reduction of 75% of our income tax on the profits of the enterprise. The units of Crato and Fortaleza, they also have the same tax incentive. The unit of Crato, it's until December 2026, and the other one until 2030, respectively. Another highlight regarding sustainability, we have launched for the third year in a row our recreation, our sustainability report, where we have presented all our sustainability journey from over 15 years of the company, and it's a very interesting reading. We also won an award, the Amcham ECO Award in recognition of the Rider R4, a sustainable line.
Of Rider because uses products that are more sustainable and EVA bio-based and PET bottles, recycled bottles in its production. In this sustainability report also, we inform that we have achieved zero emission levels in our footwear production regarding Scope 2. What is Scope 2? It is the use of indirect energy, electric energy, electric power. Advancing a little bit about and talking a little bit about our digital commerce, it grew 72.5% GMV when compared to the second quarter of last year. It was 152 million of pairs sold. We observed an increase in all our brands. We had a growth of 48.3% in sessions. In users, we increased 24.5%, and we also had improvements in our websites.
We included the way of paying with Pix, P-I-X, in June, which represents 9% of the payments done through the platform. In our third quarter now, we are gonna start the development and studies to implement the Melissa app and the loyalty program. We also got nowadays our presence is in big marketplace such Magalu, Mercado Livre. It has been showing a robust growth from June to July. At 100%, we increased sales in these marketplaces. Now on the second half, we are gonna include our products in Netshoes, Amazon, Riachuelo and C&A. Now, talking a little bit about numbers for the second quarter. We had a second quarter that's very, very strong regarding revenue and volume.
We have said that before, that we expected a very strong second quarter, related to the sell-out evolution that we have observed during the evolution of the second quarter. The sell-outs that had increased during the first quarter has a little bit of a decrease of, you know, from one or two months for the selling. We only produce based on order placed, so retailers in the end. The sell-outs, they could see the sell-out improving in the end of February, and now they started placing orders in March, and we shipped in April. This dynamics is still happening on the second quarter, and it has been continuing on the third quarter too. The net revenue is BRL 741 million, an increase of 46.5% related to the second quarter of 2021.
This happened especially because of our domestic market that presented a 49.4% growth. That's regarding the female line, Kids and Melissa. Now, going back to a normal life, going to social events and resuming, going back to work in-person and to school also, that has incentivized the sell-out of these new lines that I mentioned before. In the external market, the growth was 37.5%. When we look at the volume, it grew almost 35%, 35.9% in a total of shipped pairs, 37 million pairs shipped. In domestic market, the growth was 32.5%, while in the external market it was 44.6%. We can see, the domestic market presented a gross revenue and a growth of per pair of 13%.
The external market presented a decrease of gross revenue in BRL of 5%, regarding the real being a little bit more valued in the second quarter when compared to the second quarter of last year. When we observe the gross revenue in USD of the exports, we can see a growth of 2.3%. This growth of our gross revenue of 13% in the internal market is completely connected to our performance with our kids products, Melissa products and female products. Also about the excellent retail performance in traditional footwear stores that sell products with a higher ticket value and had an excellent performance in the quarter. Recurring EBIT reached 67.6% growth. BRL 11 million. It's a margin of 2.1%, 0.3 percentage points. EBIT is still since the beginning of the pandemic.
This pressure is isolated, as I'm going to show you a little bit further. It's related to the raw materials because they grew, the costs grew a lot since the beginning of the pandemic. We can also see a trend, a consistent trend of receding. These costs receding. The recurring net profit, BRL 73.4 million in a growth of 86%. You can see that our financial results, they added a lot to this increase in millions. Going up from 11%-14%. I will highlight our COGS here. In our second quarter of 2018, we still have a margin of 44%. In our second quarter of 2022, our gross margin was 34%. We had a decrease in gross margins close to 10 percentage points.
Let's observe where it happened. If we talk about labor workforce, it represented 22% of the net revenue. Now on the second quarter in 2022, it's 21.9%, so it's consuming less net revenue than it used to before. Other manufacturing costs used to be 10.7%. In the second quarter now, they are 11.9%, showing a margin increase. Let's have a look at the participation of raw materials in the COGS. The raw materials used to represent 23% of the net revenue in the second quarter of 2018. Now in the second quarter of 2022, it's representing 31.9%. An increase of almost nine percentage points, nine percentage points.
If we isolate the effect of the raw material, we will have a margin that's very similar to the one in 2018, on the second quarter of 2018. The graph on the right shows these results. On the second quarter of 2021, labor workforce used to represent BRL 3.57. In the second quarter this year, BRL 3.58. It has remained stable. Other manufacturing costs used to represent BRL 12.9, and in the second quarter of this year, BRL 1.95. We had a little bit of a decrease. Now, observe the raw materials per pair. It used to be BRL 4.16 last year, and in the second quarter this year, BRL 5.20. Again, we can show you that the raw material is what has been putting pressure on our COGS.
We have good news. This is the behavior of our main raw materials. Since the beginning of the pandemic, the PVC resin that's representing about 40% of the composition of the PVC. Remembering that the PVC composite represents 50, 60% of the COGS of the raw materials. The PVC resin in December last year peaked, and it reached 165% high compared to January. Since then, it's showing a trend, a decreased trend, and I have data here till June. Now in July and in the beginning of August, there was a little bit of a situation, an increase in this fall. Representing kind of 30% of the PVC resin, they peaked in December with 95% high, and then up to June, they have receded for 86%.
Soy oil, which represents 18-19% of our PVC composition. It kind of remained in a high until May this year. From May onwards, it receded a little bit, being stable from May to now. When we look at the orange line, it peaked in May, and since then it's been receding. The plasticizing, it's in a fall of 75%. The PVC composition, 77.9%. What we can see is that our main raw materials peaked in December, and since then they have been receding. That hasn't affected our COGS yet because we have been carrying during the pandemic about 60 days of raw material inventory.
As we didn't have any problems with raw material supply during the whole period of the pandemic because we were a little bit more conservative and we used to have 30 days of inventory. During the pandemic, we had 60 days-90 days of inventory. Now we have a little bit less. We've 60 days of raw materials. Our average cost of inventory of the PVC composition composed representing 60% of the COGS of the raw materials. It peaked in February and in March this year. The raw materials, the quotations of prices that we paid, they peaked in December, but that affected our average inventory of PVC in February and March. Since then, it's been receding. What can we read from that?
If this trend of raw materials going down, decreasing, which continues, that's what we believe is going to happen is that on the third quarter, in a more strong way or in the fourth quarter, we are probably going to have a decompression of the pressure of raw materials in our COGS. With that, if we continue with the same volumes of orders that we've got in place in the manufacturing plant, we are going to have an increase in our margins. Talking about our operational expenses, they grew almost 36% in the period, which was less than the net revenue. We can see that the participation of operational expenses on net revenue moves from 35.7% last year to 33.6% this year.
Here, the biggest growth we had inside operational expenses is about commercial expenses. They grew 37.5%. Inside that, we have variable expenses composed by freight, commissions, licensing. They were the ones that presented the biggest growth. Remembering that in the third quarter this year, since the beginning of the pandemic, is where we have commercial activities going back to normal. In this quarter, people started traveling again. We have a resumption of participation of trade exhibitions, trade shows, both from Melissa and Division One. It's natural that we have an increase in our operational expense, commercial expenses compared to last year because of this resumption to normal.
Inside this, commercial expenses, we also have our innovation teams and the digital commerce team that up to two years ago, these teams didn't exist. Nowadays we have a huge structure with more than 130 people. We have also the Bergamotta Labs with more than 20 people. That shows our commitment, the investments regarding innovation and the maturing of our channels, our online channels. Now, talking a little bit about the second quarter, we presented a very strong increase in our revenues for BRL 1.3 billion. The whole market grew 15%. Externally, 24%. In volume, we grew in a little bit smaller rate. We expected a certain growth of gross increase, anyway, increased 2% compared to last year for 63 million pairs. In the domestic market, we have a resumption of 62%.
It's been isolated in the first quarter, as I showed. We had, on the third, a strong one. External markets close to 20.9% growth. Talking about our investment committee portfolio. It's a portfolio where we have alternative assets to our traditional bank investments and public titles. In June, in the end of June, we had BRL 693 million allocated in this portfolio, and 64% of that were allocated to retail and for investments in assets. We had more than 13% per year. We have 8% in credit assets in real estate, and also in our variable portfolio is allocated, as I showed before, 48% in Cyrela and 18% in Petrobras and Vale do Rio Doce.
The investment committee that has been approved by the administration board in the second quarter of 2019. Since its beginning, it's up 78%. The equivalent of 436% CDI, we had this return. Talking about the distribution of dividends, the results of the accumulated first quarter was BRL 2 million. We have to discount the legal reserve. It's BRL 115 million for the calculation of a legal reserve.
BRL 5.8 million. We have BRL 109 million left to distribute as dividends. We have already distributed BRL 76, so we have a balance of BRL 109 million to distribute between shareholders that held stocks of Grendene. The shares of Grendene, they will be ready since the 12th. They will start becoming ex. BRL 25.6 million will be paid. BRL 7.6 million will be paid as dividends. BRL 18 million gross will be paid as JCP, interest on equity. I apologize, we have to discount from the BRL 18 million. We have to discount 15% of taxes, which are the net amount, would be BRL 3.5 million.
What I had to say about numbers on the quarter is that I'm showing our distribution, our accumulated distribution since the opening of capital of BRL 3.5 billion. To finish, I asked our digital commerce a coupon for a voucher, discount voucher, which can be used in all of our shops. You get a discount of 15% in our shops. This coupon is not cumulative. You cannot use with other sales, other offers. This is available to you up to August 15th. I'd like to thank you now, and the questions are open.
Now we'll start the section of question and answers. The questions can be done through the audio, clicking on the icon Raise Hand, which is available at the bottom part of your screen.
In this moment, a request to open your microphone will be shown and you must click on Unmute. To send your text question, just click on the question and answer icon, which is also available on the bottom part of your screen, and type the questions. The questions in English will be received exclusively via text. Our first question comes from Renan Sartori at Bradesco BBI. Renan, please proceed.
Good morning. I'd like to place two questions. The first, how can you see the perception of demand and the trend of sales on the third quarter? And also, how have you been feeling the stronger marketing investments, how have they reflected on the marketing by the client?
The sales on the third quarter, as we produce, the orders are placed for these three months, we have two months of orders.
In July, which we have already built. In August, because we will receive the orders now. So we are perceiving, we are looking at a movement, a growing dynamic in terms of demand. We are very optimistic, not just for the third quarter, but also the second quarter as a whole. Regarding the strengthening of the brands, I think the performance of the second quarter shows that the growth we had in volume, both domestic market and foreign market, that shows our market share. And it shows very clear strengthening of our brands, among other factors, like investments in markets that we have been making.
Thank you, Alceu.
You're welcome.
In this moment we finish the question and answer section. I would like to give the floor to Mr.
Alceu Demartini de Albuquerque for his final considerations.
Once again, thank you very much for your presence. In case you have any questions, our team of investor relations is always open to clarify them, to answer them. I wish you all a good day and please enjoy the coupon for the RI team. Thank you very much.
Thank you. The webinar of Grendene is now finished. We'd like to thank you all for your presence, and we wish you all a good day.