The second quarter's presentation for Quero-Quero . This is our investors' related meeting. Today with us, we have Paula Lopes, Investor Relations Manager, and Peter Furukawa, Chief Executive Officer, and Jean Pablo de Mello. The presentation will cover our pillars, expansions, and projects, followed by a discussion and a Q&A session. Now, I turn over to Peter.
Good morning, everyone. It's always a pleasure to be with you to share the evolution of Quero-Quero stores ' progress and the results for the second quarter 2024. We remain firmly committed to advancing our five strategic pillars: gaining market share, excellence in credit and collections, doing more with less, digital sales, and a high-performance culture.
In the gaining market share pillar, we operated in a quarter marked by a still challenging macroeconomic environment, with interest rates at 15%, in other words, 4.5 points higher than the same period in 2024, and more cautious demand in our segments. It is important to note that in the second quarter of 2024, our sales were strongly and positively impacted by inventory replenishment and reconstruction efforts after the floods in the state of Rio Grande do Sul, creating an atypical or atypically high comparison base. Even in this scenario, total revenue grew 3% compared to the second quarter of 2024, reaching BRL 761 million. In the first half of the year, same-store sales grew over 4%. In the isolated comparison of second Q 2025 versus second Q 2024, we recorded a - 3.5% variation in same-store sales, explained by last year's atypical base.
When we look at a more normalized base, second quarter 2025 posted an increase of 6% on same-store growth, and we continue permitting the market in the regions that we work at. In the quarter, we inaugurated six new stores, totaling 674 in the period, I'm sorry, 579 at the end of the period. In the excellence in credit collections pillar, we kept the latency under control. VerdeCard's portfolio pass-through ratio ended the quarter at 11.7%, below last year's figure and in line with historical averages, despite the challenging macro environment. Our portfolio grew 18% year -over -year, reinforcing the quality and depth of our credit operation. In the doing more with less pillar, gross profit reached BRL 216 million in the quarter, even with higher funding costs. We maintained strong cost discipline.
Administrative expenses were flat year over year, with a 0% nominal increase, and selling expenses grew 5%, reflecting the store base expansion over the past 12 months. In the digital sales pillar, we reached 26% of sales through digital channels that are integrated in our physical operations, in line with our strategic plan. In the high-performance culture pillar, we trained 55 new managers in the second quarter of 2025, with 334 employees participating in the Desponte program in June 2025, preparing our team for the coming years of growth. In the next slide, we close the page with 579 stores, totaling 382,000 sq. m. of sales area. In the year -to- date 2025, we opened 14 stores, six in the second quarter, and closed eight units. Over the past 10 years, we have opened 353 stores and closed only 15, demonstrating consistency and assertiveness in our expansion.
We had eight renovations in the second quarter, totaling 16 in the semester, reinforcing our customer service standards and customer experience. In the second quarter, new stores were distributed as follows: three in the state of Paraná, two in Santa Catarina, one in Rio Grande do Sul, all located in towns with less than 15,000 inhabitants, maintaining our focus on the countryside. Today, 85% of our stores are in towns with less than 100,000 inhabitants. I will now turn over to Jean, and he will provide more details on the operational and financial indicators.
Good morning, Peter, and hello, everyone. It's nice to be with you. We're able to learn more about our results. I will move on to the next slide and talk about the company's revenues. Peter has made a brief summary of our current scenario, and in the lower graph, we can see that this quarter we grew 3%. In the accrued in this half of the year, you can see the results here on the slide. You can see that the growth is well aligned to what we did last year. However, as already highlighted, we do have a strong seasonality result, and we usually have lower sales in the first half and more sales in the second half. This year, we also have the additional demand for the projects that we saw in the second and third quarter because of the floods in Rio Grande do Sul.
On the top of the slide, you can see that we had a minor decrease going from a comparison basis where last year we grew 3%. It's already been commented that we had a minor decrease in same-store sales of 6%, but once again, based on a strong basis with growth of 10% compared to the previous year, and we're doing better than in 2023, even with a very challenging macro scenario. The accrued for the year, we had a growth in retail sales of 7% in retail sales, a little bit over BRL 1 billion. Financial services, we can see more stable growth. We grew 14% in the second quarter and 13%, I'm sorry, in the half of the year. We can see that revenue and financial services, we had a more stable growth throughout the last quarters.
Credit card also has had good growth of 13% and 14% in the accrued results for the first half of the year. I would like to highlight the seasonality of the comparison basis because of the strong demand we had in Rio Grande do Sul last year. When we look at the stores outside Rio Grande do Sul, we had a same-store sales growth that was significant and positive following the trend of what we'd already been doing. Moving on to the next slide, we can see the gross revenue of the company. This is where we had a little bit more impact because of the margins and regarding retail. In the accrued results for the year, we had 12% of gross profit resulting from a retail margin.
On the right side graph here on the slide, you can see that our margin has been similar and maybe slightly below what we had last year. This is a very competitive environment. The macro environment does not see relevant growth, even though we're gaining market. This is where we still have some pressure on retail margins. We also have an impact on financial services, and you can see that in the first half of the year, it was 42% of the gross margin. Peter has already mentioned that this is an impact of the higher capital cost when compared to the same period last year. We have been working on this, and because of the average time of our portfolio and because we do not want to have an impact on sales, the margin is closer to what would be a normal margin.
This is something we will only see after the third quarter with the stabilization of capital cost, and we will be able to include this within our costs. We expect to have margins, especially for financial services, that are closer to what we had in the previous quarters. Moving on to the next slide, it's important to highlight that this is where we can see the impact of all of the control of our expenses we've had in the company, especially in this quarter. We had a 5.3% growth, even though we opened new stores. This was seen last year and this year. In the consolidated, we had a growth which is well aligned with the inflation rates, even though we expanded our operation. Basically, we have the same nominal values this part of the second quarter that we had last year.
In the upcoming quarters, we will see results aligned with the company's results. Moving on to the next slide, slide 11, we can see the EBITDA and adjusted EBITDA results for the quarter. In the quarter, our accounting EBITDA was [29]. In the adjusted EBITDA, we remove this effect or the effect of IFRS 16, including expenses with rentals, with store rentals. In the result for the quarter, we had what we had already commented, the effect of a comparison basis in retail and the financial service margins. Even so, there is an important trend, and I would like to highlight that in the second quarter, historically, we have lower results. We expect and are used to seeing these results. We have leverage of our results in the second half of the year. It's not only the fourth quarter, but the third quarter.
The third and the fourth are very important for the company, especially now in August when we have the company's anniversary. This is usually the second largest sales month of the year for us. In the next slide, we will talk a little bit about the adjusted net profit. This far, we had adjusted loss. When we look at the accounting, it's important to highlight that we do not identify credit fiscal or tax on fiscal loss. This will be done when we have a more favorable macroeconomic environment, which will enable us to use this tax credit. This here is just the adjusted net profit. We had an accounting loss, which was below last year's, and the adjusted net income last year, we had BRL 12 million. This difference results from the capital cost of the company, which exerts some pressure on our debt.
In the next slide, we can see the credit portfolio evolution. Peter has already mentioned that along with the cash flow, and this is something that we always strive to keep control of. We can see a gradual growth of our credit portfolio, reaching a little bit over BRL 4 billion. We can see the results, the total results, and the interest-bearing results. More importantly, the default has been controlled. Delays over 90 days are lower than what we had last year. It is well aligned with our historical data, perhaps even better than in the second quarter of 2023 and well aligned with 2019. We do have a very conservative view of credit granting. The objective is always to be able to provide credit to our clients so that we can leverage retail sales. We haven't changed anything really in the company.
The macroeconomic environment is still challenging, but default is under control, as you see on this slide. Moving on to the next slide, slide number 14, we can see the total payment volume with a constant increase in the use of these cards, both in our stores and outside our stores. This growth in the use of the credit card has led to an increase of our portfolio. I would like to reinforce this is all well under control, all very healthy, and we believe that the higher number of clients using the card, over time, it will naturally bring in more clients to our store, expanding a strong relationship with these clients, these consumers who will have Quero-Quero as their first option when they want to invest or improve their homes.
In the next slide, we can see that since 2023, we chose to have lower investment amounts in the second quarter of 2024. We have totaled BRL 13.7 million in investments. In the first quarter, we totaled BRL 26 million, including the opening of 14 new stores and the refurbishing of another 16 stores. We intend to keep on opening stores, and we've been reaching our goals. These stores have demonstrated their very positive capacity in the beginning of the year. Of course, they're all included in this macroeconomic environment with high interest rates. Even so, we can see that it's worthwhile to keep on investing, but we are focusing on cash flow. This is our last slide, cash management. This is all included in a scenario of the cash of the company and loans and financing levels that are well aligned with the previous years.
We have BRL 497 million. The adjusted net debt, historically, it grows in the first and second quarters, but our objective to reach the end of the year with a nominal adjusted debt that is well aligned with the previous years remains. We work aiming at our working capital, and we believe that once again, just as in previous years, as it has been demonstrated in the data for 2022, 2023, and 2024, that we will be able to reach our internal objective, which is reaching the end of the year with an adjusted net debt well aligned to previous years. I also highlight that we had a mission, just as we did in previous years with a new series of the VerdeCard.
We had a five-year quota keeping our rating, our AAA rating assigned by Standard & Poor's Global Ratings, while extending the fund's liability profile and reducing the capital cost spread because of the quality of the results and our portfolio. Of course, we also have the Selic increase, which has an impact in the capital cost for the company. I now move on to the next slide. I've discussed with you all of the main aspects, and I turn back to Paula so that we can start our Q&A session.
Thank you very much. We're now going to start the Q&A session. I'd like to remind you that we're going to use the Zoom tool for the Q&A.
First question is by [Vinicius Freita and Dadu]. Peter, regarding competition, do you see or how do you see the proposal value for market in terms of prices?
Good morning, [Peter]. It's always good to hear from you. It's interesting that you asked this question. This quarter, we had two interactions with our board, and this is something we discussed a lot last year. We had a very comprehensive survey with clients and non-clients with a lot of people participating. The findings were all very interesting. The bottom line of what you were asking about penetration in the different categories was a surprise for me. In construction materials, for example, we had a penetration of 3% in the marketplaces of the cities that we work at. E-commerce penetration is over 50%. However, it's always on the marketplaces that you're well aware of. People still buy at those places. I think that perhaps one of the main players in Brazil can deliver fast, far from what it is in the bigger towns with attractive costs, I would say. However, penetration is lower.
We divided the segments according to the size of the cities. The smaller the city, less penetration we have in terms of marketplaces and e-commerce. In a city with more than 300,000 inhabitants, we have a few stores there, and you can see better penetration in furniture and household appliances. When you go to a 50,000 inhabitant city, penetration is still low in these categories. The fact that you can buy from a person or a store there and talk to somebody you know still gives us some competitive advantages in the market that we are strong at. We have also seen a larger number of competitors closing their stores, which only shows that the market is very difficult. We should congratulate our team for having been able to maintain our focus in the markets that we work at.
Thank you very much, Peter.
The second question is also by [Vinicius], and he says, "You mentioned a de-acceleration in the quarter with a more competitive environment. Could you comment about the de-acceleration? Are they concentrated in any specific category?"
Good morning, Peter. How are you doing? No, we do not have anything specific here regarding this debt in terms of frequency in the short term. We already commented that it's important to highlight the differences between the sales in and out of the state of Rio Grande do Sul. In the end of the second quarter, we had a de-acceleration of sales, but it was positive outside Rio Grande do Sul. It was very disseminated. We do not have anything specific, nothing that calls our attention that would be worthwhile commenting. We just commented on the macro trends because of the capital cost.
We still have a positive view for the rest of the year. This is an important time of the year. The beginning of the third quarter was very similar to the second quarter. Once again, I highlight our comparison basis in Rio Grande do Sul is very strong, especially in the third quarter and now in August, which is a very important month for the company. The company is concluding its anniversary, celebrating its anniversary, actually. The company as a whole is mobilized so that we can deliver services with special promotions to our clients. Therefore, August is usually a very successful month, which makes a lot of difference for the results in the third quarter. This variation that we see is well disseminated throughout the different categories.
Thank you, Jean.
The third question to Peter, physical person, "What is the performance of the stores opening in São Paulo and Mato Grosso do Sul?"
This is very interesting. The best expansion we had in the history of Quero-Quero was in Mato Grosso do Sul. It was better than in Santa Catarina and Paraná. I think we have a lot of people from Rio Grande do Sul there, and we were very successful in these openings. In the state of São Paulo, it was a little bit more challenging, as I mentioned before. We had some problems with some managers, but today, things have gone back to normal with all of the openings we made there and in other states. It's important to highlight that even here in the store, we are always careful when going in the state of São Paulo because everybody believes it's very different.
I'm talking about the smaller towns where we work at. When we went there and we saw that the rental price is the same, the challenges and opportunities are also the same. Because we chose cities where the population is below 50,000 inhabitants, it was very similar to the openings we have here without any major differences. I don't see any difference between opening stores in the middle of Minas Gerais. We're very far from that. We still have a lot of opportunities here in Rio Grande do Sul, but I do not see any important geographical challenge that could make things more difficult for us.
Thank you very much, Peter. The next question is by [Pedro Lima], and it will be answered by Jean.
"How have you passed on the funding costs or higher funding costs to clients, and how are you going to balance it to avoid harming retail? Should we expect an improvement in the margin of financial services in the third quarter?"
The answer is yes. Here, this cost increase, first at the end of last year, we did have an inversion in the interest rates, and then we also have the uncertainties of what these rates are going to be and how it would affect the company. When that happens, we always try to keep our profitability of the operation. This is our objective, but we have to make these adjustments over time. This is something we've been doing in the past months. In July, we reached a level where we've been able to balance, at least in some of our concessions, this funding cost.
Once again, because of the average time of the portfolio, it's something that we will see over time. We will see the impact over time, but we expect that after the third quarter, we will have better margins in the provision of financial services and that these margins will be close to our historical data. This is something we've done gradually over time with a control group to understand how that would impact our clients. I think that we've reached our objectives, and we'll see the results in the third quarter, and also the cost of capital and the Salic rate will be stabilized.
Thank you, Jean. The next question from [Pedro Lima], sales side analyst. "Regarding the leveraging level, does the current level trouble you and will it to generate a review in the opening of stores?"
No, this is usually impacted by seasonality. When the company is larger, nominally, the values are also higher. The work we've been doing in terms of investments, opening of stores, this is all well adjusted. We have a minimal level of opening of stores. Peter has commented about the positive results of the new stores. Peter commented in the previous question that it is worthwhile mentioning that the number of stores we have remains the same, but we still have an opportunity to grow more. We have the capacity to accelerate the expansion level. We don't want to do it right now because of our macro environment and because our leveraging and adjusted nominal net debt is under control.
We trust that this cash flow management will lead to cash generation in the third and fourth quarters, and that it will be able to take us to similar levels of net debt that we had in the past. We're very careful with default. Of course, we would like to be selling more, but it's all according to plan for this year, which is still a challenging year for our sector as well. We continue hoping to reach the end of the year with a controlled debt.
Thank you, Jean. The last question is by [Leonardo] from [CLC]. "The company inaugurated six new stores in the second quarter of 2025, totaling 14 this year. Considering the current consumption scenario is weaker, what has been the mean maturation time of these new units until they reach an operational break-even?
Peter has already commented about this.
The stores ended up suffering more, the ones that were inaugurated in 2023. They were inaugurated at a very poor scenario when we had significant sales decrease because of the macro scenario. If we look at the stores that were opened in the end of 2023, 2024, and even 2024, these stores are already providing positive results before the end of the first year. They reach a break-even relatively closer to pre-pandemic levels, and the payback tends to be similar. In 2012, 2017, the break-even was reached in the first year of operation with a payback in the third year of operation or even before then, and a maturation period of five to six years. This stands true, especially for the stores that were opened now.
The stores that we opened in the end of 2021, 2022 will have a longer period because the macro scenario in the beginning of their operation was more challenging. It doesn't mean that they will not mature and that they will not have a payback. It only means that the scenario was adverse when they opened up. The results of last year and this year have been very positive, of course, as Peter commented, because we opened less stores. We have been able to select our new stores really well and operate them in small cities where our competitive advantage is even more relevant.
Thank you. We now end our Q&A session, and I turn over to Peter and Jean for their final considerations.
Since I have my mic open already, I would like to thank you all for your presence here today.
Before turning over to Peter, this is Paula's last participation with us, and Peter will take over the IR area. Paula is going to have a master's degree in Columbia University. Congratulations, Paula. We will miss you. I would like to thank you all for your presence.
Once again, it's always a pleasure to talk to you. We're going to have some NDRs in São Paulo, and we'll be available to answer more questions. I would also like to thank Paula. We're sad that she's leaving, but also happy at the same time. We're sad because she's leaving us, but happy that she will be living in New York. We're so sad for her. I would like to congratulate her for the excellent work she's done. She even won an award that we don't give out to many people of outstanding performance. We are going through a challenging moment.
I would also like to comment something about the new stores. During the pandemic and immediately after that, when the stores suffered a little bit more until they reached maturation, we adapted to see how we could further improve our model. We discovered that a greater correlation between a shorter payback and a longer payback was the number of cards that we were able to open in those cities because the card creates a bond with our clients, providing better interaction with them. This is a partnership we have with Elo. They have been a phenomenal partner. Also, Eduardo Gouveia has been helping us in this process, and we've been able to open our stores with a much higher number of cards, enabling us to mature faster in these stores in the last 18 months. This is a lesson we learned. Once again, we're very happy to gain market.
We have hard work ahead of us. Everybody is well engaged. I would like to congratulate the whole team for being able to grow despite the very harsh market conditions. Thank you very much.