Morning everyone, thanks for waiting. Welcome to the Video Conference for the Release of the Second Quarter 2025 Results of Grendene S.A. I want to remind those who require simultaneous translation that we have this function on the platform. To access it, simply click or tap the interpretation button on the globe icon at the bottom of the screen and choose your preferred language, either Portuguese or English. Anyone watching the video conference in English, you can mute the original audio in Portuguese by pressing the mute original audio button. Please note that this video conference is being recorded and it will be made available on the company's investor relations website, ri.grendene.com.br, where the full earnings release material can be accessed. The presentation is also available for download via the chat icon, including in English. During the company's presentation, all participants will have their microphones turned off.
After that, we are going to start the question- and- answer session. To ask a question, go to the bottom of your screen and click the Q&A icon, then input your question. When your name is announced, a prompt to activate your microphone will apercentual pointsear on the screen, and you must then activate your microphone to ask the questions. We recommend that you ask all of the questions at once. We emphasize that the information in this presentation, along with any statements made during the video conference regarding the business prospects, projections, and operating and financial targets of Grendene , are based on the beliefs and assumptions of the company's management, as well as information currently available. Future considerations are not guarantees of performance. They involve risks, uncertainties, and assumptions because they refer to future events, and therefore, they 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 from those stated in such forward-looking statements. Today, we have the following company executives with us: Rudimar Dall'Onder , Chief Executive Officer; Gelson Luis Rostirolla , Chief Operating Officer; Alceu Albuquerque, CFO and Investor Relations Officer, as well as the company's key managers. I will now give the floor to Mr. Alceu Albuquerque. Please, Mr. Alceu, you can proceed. You can go ahead.
[Foreign Language] Good morning, everyone.
Good morning, everybody.
[Foreign Language] Bom dia a todos, obrigado pela presença na nossa.
Thank you for your presence on our Video Conference for the Results Presentation of the Second Quarter of 2025 and First Half of the Year. Starting with the main highlights of the year of the second half, second quarter, we have another quarter of challenges with a micro environment that's quite complex and lots of uncertainties in the domestic and the external markets, foreign markets. We observe environments with high interest rates, high inflation, either in Brazil and abroad, especially related to food that impacts the purchase power of consumers. This dynamic, a more challenging one, it ended up bringing uncertainties and insecurities to our consumers. Within this scenario, we could present growth either in revenue and volume. The volume grows 1.2% in the quarter, reaching 27 million pairs shipercentual pointsed. This growth is concentrated in the domestic market where we reached 22.9 million shipercentual pointsed pairs of shoes.
In the foreign market, there was a decrease of 3.2%. When we look at the gross profit, it grows 25.1%, reaching BRL 756.2 million, with a growth of 13% in the domestic market. In the foreign market, there was a growth of 88%. When we look at the revenue that grows 25.1% while the volume grows 1.2%, it shows that we grew in revenue, gross revenue preparing 27%. That reflects readjustments of price, but especially because of all the efforts made related to production and product development with more value added, with more perception from the customers. The gross profit grows almost 14%, reaching 13.9%, totaling BRL 233.1 million, with a bit of a decrease of the gross margin that reaches 42%. The main impact of this gross margin is related to labor within everything that composes the COGS. We are going to talk about it later.
It's being impacted by volume that's smaller than the one we planned. With that, we diluted our costs. The recurring EBIT will decrease 27%, reaching BRL 30.4 million, and the margin is 6.1% in a decrease of 2.6 pp. Our net recurring profit grows over 200%, 200.6%, reaching BRL 185.5 million. It's being a lot influenced by our financial results that grew 340%. With that, we had a growth in our net margins, recurring ones, of 24.3 pp in a total of 37.2%. Here, I will open highlighting the impact of GGB in our lines in the DRI. Since acquiring 100% of the shares of GGB, the numbers of GGB, they are not only related to equity methods from the second quarter of last year, but they start affecting all our lines in the DRE.
To be clear, the impact of the GGB, I will show that in this column, the two quarter 2025, I have account numbers of Grendene excluding the non-recurring ones and GGB effects. I have on the second column, we have a column we have adjustments in the results of Grendene without these items, the recurring items. The items related to GGB, they are highlighted in red. The gross revenue from BRL 756 million, excluding the gross revenue coming from the sales of GGB, it would be BRL 647.5 million, a growth of 25.1%. Excluding the numbers of GGB that start to be consolidated with our numbers, would be 27.1%. Net revenue grew 15.6%. Excluding GGB sales, it would have grown 6%. COGS grew 16.9%. It would have grown 26.9% if it wasn't for GGB costs. The same dynamics apercentual pointsly for our gross profit and our expenses.
For example, the sales expenses, selling expenses show a 39.2% growth. They would have grown 4.7% if it wasn't for the consolidation of GGB. Administrative expenses, they grew 52.7%. Excluding the numbers of GGB, they would have grown 19.1%. This 19.1% represents BRL 5.1 million. They are explained basically based on four items: remuneration, stock options, excess in the city of Sobral. They started in the city. They started having that in the final last quarter last year. Finally, because of the purchase of inputs, we have a new understanding from the ministry in Serra that says that the purchase of inputs, they are not part of, they are not embedded in the benefits in terms of a reduction of ICMS taxes. Finally, we have another reclassification. This BRL 58 million, they are our projects of development, state real estate development projects that we do through holdings.
In fact, the result of these investments, they will impact in our EBIT. Because of the characteristics of the business, which is the investment of our cash, we understand it's a non-recurring item for EBIT, but it is for the financial result. This is why it's in the financial result line now. Net results for Grendene from 244.7% growth, excluding the non-recurring items and the ones related to GGB, it would have been 200%. Here, talking a little bit about the domestic market, the performance, specifically Division 1 brands, which contains all the brands except for Melissa. It grew 8.5% in volume, 8.1%. The gross revenue prepared was advanced by three lines of business: Grendene Kids, Ipanema, and the female segment. When we look at the male segment, it represents a decrease in pairs, but it has a growth in revenue because of the average price in 9.2%.
When we look at the gross revenue prepared consolidated brands in Division 1, it grew 6.7%. The online sales of the brands of Division 1 grew 5.2% in the volume in the period. They represent 1.6% of the total sales of the division brands in the domestic market. The sell-out of the brands was negative. It decreased 1.9% when compared to the growth of 1.8%. What caused this decrease? What were the factors to impact the sell-out? It's because the distributors are a little bit more cautious and lower temperatures in the south and southeast of Brazil that represent a lot of our sales. The winter was a little bit stronger. We also had more action of competitors. We had been observing that for some quarters, and it has been repeating itself. The competitors are striking a little bit harder.
The sell-out had a retraction in the distribution channels and shoe stores, also traditional ones. Self-service is growing. The magazine channel, which contains big stores like CNA, Renner, and Hershey, remains the same. Inventory levels are healthy in this client, given that we had an adjustment in the first quarter related to inventory levels because of smaller volumes of selling, as you can see in this graph. When we observe the Melissa data, Melissa presented a strong growth. Almost 29% of its gross revenue volume grew 5.3%. That represents an increase of 22.5% in gross revenue per pair. That's explained by price readjustments and mostly because of the development of a portfolio, a more premium one with more sophisticated products with more added value and better perception of value from our clients, our customers.
This volume growth and revenue we observed in all our channels, in Melissa clubs, multi-brands channel, and online channels. We have observed a solid growth in the integration between the brick-and-mortar stores and the digital stores. 30% of digital stores are happening through the omnichannel. The brands of Division 1 and the sell-out of Melissa have decreased 12.8% when compared to the growth of 5.3% growth in the selling. Again, colder temperatures in the South and Southeast impacted the sell-out of our products. Melissa registered a growth of 21.8% in sales in the e-commerce. The sales and online sales of Melissa, they represent about 16.6% of total sales of Melissa in the domestic market. This is just to show the e-commerce groups who have 15.3% of GMV.
We have here both direct sales in our website, and they are delivered from our delivery system, but also sales that are conducted on our websites, but they are finished or they use our inventory in our Melissa clubs. With that, the variation between gross revenue in the e-commerce and GMV. GMV volume grew around 18.5%. Our sessions are growing 33.1% with 20 million sessions, 15 million sessions, but we have a slight drop of 0.3% show points. We reached 69% of gross margin, much because of a higher number of promotional items being sold online. Recurring EBIT grew BRL 1.2 million. It grew 1%. The general penetration in the total market reached 5.3% in the second quarter.
[Foreign Language] If you consider only Melissa online sales in relation to total Melissa sales in the domestic market, this percentage is 16.6%.
Percentual is 16.6%.
[Foreign Language] Falando pouco do que que agregou de receita.
This is what we have for gross revenue in the second quarter. We left from BRL 604 million- BRL 656 million. It represents a 25.1% growth. Volume for domestic market reached 10 million pairs. Pricing and mix reached.
[Foreign Language] Incrementa a nossa receita.
It increments our revenue in BRL 55.7 million. The volume for the external market reduces our revenue in BRL 3.1 million. Whereas prices in the mix prepared, they add BRL 75.5 million.
[Foreign Language] The exchange rate was 8.6%.
Exchange rate was 8.6% weaker, the reais was 8.6% weaker in the second quarter. If we compare to the second quarter 2024, it adds BRL 14.6 million.
[Foreign Language] Falando pouco de CPV.
Moving on now about COGs, the COGs, the gross margin that we have, it was 0.6 pps, around 42.6%- 42%. This is much to manpower that it's now representing 1.3 pps more than the net revenue when compared to the second quarter last year. Why was that? First, because we have the payroll was a little bit more expensive. Second, we were set to receive a higher volume of orders, but this volume didn't reach. We weren't able to adjust the manpower in time for this lower volume. Therefore, we had a lower volume, and it took some time to dilute that into the revenue. Raw material had a slight increase in 0.2 pps, and this is because of the increase of international shipping costs. Cost of raw material has remained stable and on lower historical platforms.
Since March, April this year, due to many factors, we can see an increase in price of international shipercentual pointsing that is added in the cost of raw material and that it's also international. Even though we use local raw materials, local shipping is considered on the cost of the pair. When we look at our net sales and COGs per pair, we can see the net revenue grew 14.2% in the second quarter when compared to the same period in 2024, whereas COG per pair grows 15.25%. The main component, again, it's manpower per pair that it grew 1.25%. If we take a longer time period and to check the average growth, we have the net revenue for 2022 and 2025.
We can see an average annual growth of 8%, whereas cost per pair grew 3% on average every year in the second quarter of 2022 to the second quarter of 2025. In other words, revenue grew in per pair. It grew around 8% per year, whereas the COGs grew 3.6%. That shows our ability to increase revenue in rates that are higher than our operational costs and show that our focus to develop new products of better added value and with a better perception of value on behalf from our clients. This image shows our operational expenses. We have 15.6% commercial growth, 39%, but we have a GGB impact. When we exclude the GGB numbers, we can see growth of operational expenses were 39%. It is now 4.7%. The same thing goes for administrative expenses. It grew for 8%.
When we check GGB, we had a growth of 52.7%, and it's now 19.1%, which is equivalent to BRL 5.1 million. This 5.1% variation is basically explained by the payrolls, the stock options plans, for the building tax in Sobral in the second quarter instead of the first quarter the previous year. Also, the default of acquiring raw material that I mentioned is not within our benefits to reduce sales tax according to the instructions of the state revenue office, the state of Serra. If we look at the slides, the impact on our EBIT last year was BRL 22.3 million, and in this year was BRL 43.6 million. It's 103% growth. If we disconsider the non-recurring items, that is a withdrawal of 27.7% from BRL 42 million- BRL 30.4 million. What are these non-recurring items?
We have BRL 5.8 million that is a result of investments in projects for development in which the means that we use to invest in these products are on hold. Given that they are holdings, the results of these projects, they are along to asset equivalents and the impact on EBIT. Given that this result comes from an investment of our cash flow, we understand that this is not part of the operation, but it's part of the financial result. Because of that, we've excluded that from our EBIT. We have BRL 13.9 million regarding the default payment from previous years, given the change in understanding of the state revenue office in the state of Serra, understanding that purchase for consumption that I would say they are not part of consuming items, they are not part of our benefits.
Because of that, we've had this value, this amount to pay from previous year. We have the non-recurring amount that was BRL 25.7 million. In the next slide, we have our net financial revenue. It reached BRL 84.7 million. It's a steady growth of 166%. This growth can be explained by the average CDI that is higher and also for the average leap that we had in that period. When we consider that BRL 5.8 million that we've excluded from EBIT and we're bringing it to the financial results, we can see that our financial result, recurring financial result, comes from BRL 84.7 million to BRL 142.8 million. It's a growth of 343.7%. Our value that we have in our wallet for investments that we're talking about, investments, alternative investments in banking systems. We have BRL 671.6 million that have been invested. This portfolio is 100% allocated in projects for real estate.
This portfolio, when we started it, we have as dividends 157.2% in the CDI. Since we started having this portfolio that was approved by the Administrative Council, we've had investment in private credit, in variable income. We don't have that anymore. The private credit has given 207% of CDI, and the variable income has given 582.8% of CDI. Coming now to the numbers of the first quarter, our volume has withdrawn 4.8% to BRL 52.3 million. On the external market, export market, we have a growth of 11.4%. In the domestic market, there is a withdrawal of 8.7%, much because of the first quarter, as we mentioned, that we had a very weak and atypical first quarter. The gross revenue growth is 15.4%. It reached almost BRL 1.5 million. We have growth both in the domestic and the export market. Internally, it's 5.5%, whereas the external market, it's 59.3%.
We can see the gross revenue growth is 15.4% when compared to the first half of 2024, that it was a withdrawal of 8.4%. We have a steady growth of 21.2%. Gross profit reached BRL 496.7 million. It's a growth of 11.6%, with a growth margin reaching 44.4%. It's a growth of 0.7 pps when compared to the same margin in the first quarter last year. Recurring EBIT has a drop of 4.1%, reached BRL 126.9 million, with a margin of 12.3%. That is a drop of 0.7 percentual points. Our recurring net profit grows almost 65% to BRL 345.3 million, with a net margin of 33.4%. That is an increase of 12.9 percentual points This is the same table that we saw for the second quarter. The first quarter, we had an impact of non-recurring items, but not especially consolidation of numbers of GGB that we had.
The first quarter, we only had the equivalence in the assets. Our net revenue that was BRL 1.4 billion, if it weren't from the GGB, would have been BRL 1.3 billion. There was a growth in the gross revenue. We would have had 3.7%. Net revenue that grew 9.8%, excluding consolidation, would have grown 1.4%. The COG that was 8.3%, again, if we exclude the GGB number, we have 1.3%. The gross profit that it was 11.6% would have grown 1.6%. Operational expenses grew 21.8%, would have grown 4%. All the other lines of expenses I'm going to show later on. This is recurring EBIT that it was 18.2%- , would have withdrawn 4.1% considering just the recurring items. The net income that it was 41.7% would have grown 64.9% if it weren't for this consolidation of GGB or the non-recurring items. The same graphic for the division, we have 0.7 percentual points
Even with the manpower component growing 0.7% show points, representing now 22.9% in the revenue when compared to 22.2%. Again, what we can see here, what has impacted this growth and what it represents is like the manpower, as I mentioned before, payroll, collective bargains, and we were able to not dilute so much in manpower costs. Our net revenue per pair grows 15.4% in the second quarter when we compare 3.9% of COGs per pair. Our operational expenses grow 21.8% in the period, but we have the consolidation of all expenses. The commercial expenses grow 34.2%. When we exclude the GGB expenses, this number starts to be 2.2%. The same thing goes for administrative expenses. They grow 34.1%. When we exclude the administrative expense from GGB, they represent a growth of 13.1%. Operating recurring expenses grow 4% in the first quarter when compared to the first quarter last year.
This is our financial result for the semester with a financial, it was 78.3% of growth and reaching BRL 7.8 m illion. For the same reason that we mentioned before, we have a higher SELIC and an average for resources applied that is also higher. When we make proper adjustments of asset equivalents, removing the results from projects to develop in the real estate, and we think about the financial results, our financial result was BRL 172 million. It raises to BRL 229.42 million. It's 117.6% in growth. Having said that, our accumulated result in the semester was BRL 256.9 million. Within these BRL 256.9 million, we have BRL 87 million that is like fiscal incentives. In the end, we have a legal reserve of BRL 169 million. BRL 8.5 million is for legal reserve. As dividends, we have BRL 160.8 million. Given that we have already given BRL 57.5 million, what we have now is BRL 103.3 million.
They will distribute it as follows: 100% as dividends that are equivalent to BRL 0.45 per stock. For the stockholders, if they have Grendene on August 22nd, the stock market will be ex-dividends. The date for payment is September 10th, 2025. This is just an update in the value that are distributed in dividends since we opened capital that we consider just the nominal value of OCP billion BRL 454 million. When we update this amount according to the IPCA, it raises to BRL 9.8 billion. When we update this value according to the CDI, it raises to BRL 13.8 billion. This is my message. This is what I had to comment on the results on the second quarter 2025 and the first quarter, actually the first half of the year. The speaker corrects himself. I'm now open for questions.
[Foreign Language] Agora, começaremos a sessão de perguntas e respostas. Lembrando que, para fazer perguntas, vocês devem clicar no ícone Q&A.
We will have the Q&A questions in the Q&A session, and you just have to write your questions to enter to join the lines. When your name is called, you will see a quick message on your screen, and you have to open your mic and go on.
[Foreign Language] Let all the questions be asked at once.
We kindly ask you that you ask your questions at one go. Thank you and have a great day. The video conference related to the second quarter and first half 2025 results are now closed. The IR department is available to answer any other questions you might have. Thank you, everybody, and have a great day.