Good morning, ladies and gentlemen, and thank you for waiting. Welcome to Magazine Luiza's conference call to discuss the results of the first quarter of 2017. At this time, all participants are connected in listen-only mode. Afterwards, we will have a question-and-answer session, when further instructions will be given for you to participate. Should you need assistance during the call, please press star zero to reach the operator. Now we would like to turn the floor over to Mr. Frederico Trajano, CEO of Magazine Luiza. Mr. Trajano, you may proceed.
Good morning, everyone, and thank you for participating in our call. I have all the executive committee with me of Magazine Luiza in order to talk about the figures of the first quarter. Going straight to that, we delivered figures during the first quarter, much higher than the market expectations and even higher than our own expectations.
Very positive figures in almost all the fronts. Putting things into context, we found a less unfavorable scenario than in 2016. I don't mean that we are really having now tailwinds, but at least we're not having headwinds as yet according to last year. We remember there was a significant drop in the same period last year. At the same time, we found a situation in terms of competition that was favorable with the large players, the key players, both online and offline, more rational. From the viewpoint of focusing on profitability, this is a game that we at Magazine Luiza have always played regardless of the economy. The key players are more rational, the scenario is more favorable as far as we are concerned, because we have always used this strategy.
The small players with more difficulty in terms of supply of products and credit to buy products, and also credit to finance their clients. Giving a scenario of consolidation and ongoing share gain. In this context, less than favorable macroeconomically and more favorable microeconomically, we have an aligned team, very motivated, and the digital strategy is very well gauged and well-defined, and we were able to deliver favorable results in all the lines of our balance sheet in brick-and-mortar stores and another quarter good performance in e-commerce. We diluted expenses. There was a drop in default, we sold more financial services. We generated cash that we used in order to reduce indebtedness and with favorable numbers in practically all lines of our balance sheet.
We are very happy with the overall results that we reached in this quarter, which is not common for a first quarter. A first quarter usually is difficult seasonally, so it's difficult to have this kind of result in the first Q. Roberto will be going into details. I would like to finish my introduction talking about from now on, our future. We are implementing our digital transformation project at full speed with a lot of focus on the evolution of marketplace, five pillars and the platform pillar, which is a marketplace platform that we are emphasizing this year. We had a record of new sellers coming on board in this period and especially in April now. We had the highest number of sellers coming on board in one single month. We are already reaping fruit from the acquisition of Integra Commerce, the Minas startup.
What helped us a lot was its velocity in terms of integrating new sellers. The focus of 2017 will be on expanding our seller base and maturation of the platform. We are not that much focused in GMV this year, but in the introduction of new sellers that are already participating in our base and in the numbers that we published yesterday, we talked a lot about that. Talking about the scenario from now on, we do not expect large changes in competition or in the macroeconomy for the second quarter. We expect the second quarter very similar to the first quarter in all aspects that I've mentioned at the beginning of the call. We expect a change in the second half. In the second half, there are some questions that we should mention.
We will have a more difficult comparison base than the first Q, because we had a very good performance in the third and the fourth quarters of last year, and it will be more challenging. I think competition will be better organized, not in terms of prices or this is not an option for everybody. I think there is no way back. People have to be more rational, both online and offline. We are talking about more focused and more organized players and a more active competition, so to say. On the other hand, I expect, and we believe that we will have a macroeconomic scenario more favorable. Having more tailwinds and growth in the sector as a whole. Also reduction in interest rates and increase in confidence, consumer confidence.
This will be more significant. It will be linked to the reforms that will be approved in the second quarter. We expect tailwinds, and for a long time we have not had tailwinds in our sector. Having said that, we wish to continue our focus on execution, implementation of our strategy, our dividend strategy, the motivation of our team, our associates who are fundamental for the success of our operations, and mainly enchanting our clients. Now, I would like to give the floor to Roberto, and then we will open for questions.
Good morning, everyone. Let's mention first the highlights on slide number two, starting with sales. We had an overall growth of 23%, one of the highest growth rates in the last few years, reaching BRL 3.4 billion in the first quarter.
On the same-store sales concept, we had a growth of 22%, very high. 12% increase in our brick-and-mortar stores. I believe it was the quarter in which we gained the most market share. The market performance was 2%, and we grew by 23%. In brick-and-mortar stores, 12%, and the market was stable. Talking about e-commerce, I think it's the big highlight. We grew 56% compared to 8% growth in the market with an extremely high share gain and participation of e-commerce in our sales. Had a quantum leap from 22% to 28% participation in total sales. It was a very big progress in e-commerce. Talking about our gross profit, we grew by 22%, our gross profit, very high. Our gross margin dropped 0.5% because of the mix effect. E-commerce grew much more than the brick-and-mortar stores.
However, we were able to preserve our gross margin in both channels. Talking about expenses, which is also a major highlight here. We were able to dilute our operating expenses as a whole by 2.3 percentage points. We reduced our SG&A to 22% in the first quarter, which is the lowest level in the last few years. Also, as drivers for this reduction in our operating expenses, we had the very strong growth in sales allowing us to have very good operations in brick-and-mortar stores and very accelerated growth of e-commerce, which has a lower level of expense than the average due to our strategy, which is fully integrated in multi-channel. Also the maturation of the project of VBB and GMD. Many initiatives were implemented over the last year, so becoming more mature and contributing as a whole to the expense control. EBITDA.
61% growth in EBITDA, margin of 8.3%, also our highest EBITDA margin of all times, the current. Especially for a first quarter, this is not usually a quarter that has the highest margin in the year because of seasonality. This margin was very high for a first quarter. Also, the evolution of our net income from BRL 5 million in the first quarter last year to BRL 59 million in this quarter, with an ROE of 32%. Working capital. We improved our working capital BRL 381 million in eight months improvement, and we reduced our adjusted net debt as well. As a consequence, with the growth of the EBITDA, very high as well, we decreased our leverage to 0.5 times EBITDA to one of the lowest levels of leverage since our IPO, for example. Lastly, Luizacred had an excellent performance.
Net income growing by over 55% and return of Luizacred going back to a very high level, 28%. Also a very strong reduction in the NPLs. Growing our sales, growing our portfolio at the same time, which is very good for the business as a whole. On the next few slides. On this next slide about operating performance, we show you the evolution, the number of stores in the last 12 months. We opened 18 stores for already this quarter according to the plan that we have in place and that we have already talked about in the previous quarter of intensifying the pace of opening new stores. Our investments went up because of that. It was 50% in new stores and also in technology. Together with our digital transformation plan.
Average age of the stores, most of the stores are already mature, which is very good as far as profitability is concerned. The Northeast, for instance, which is the mature region, continues to grow very strongly, and this was a highlight for us in terms of growth as well. On the next slide, we show the quarterly performance of the gross revenue. It is the fifth consecutive quarter of growth in sales, and the pace is accelerating. Highest growth rate in the last five quarters, and with almost the same level as the last quarter last year, which includes Black Friday and Christmas. BRL 600 million more than the first quarter of last year, which is an incredible increase in this quarter.
Internet is selling even more in the last quarter of last year with a 56% growth based on a growth of last year that had already been very high, around 27%-28%. A very good sales performance with market share gain, a very high one. On the next slide, we show the performance of gross profit and gross margin. I have already talked about growth and the factors that explain the variation in our gross margin. I would like to mention here, expenses as a whole grew by 12% compared to 24% growth in net revenue. A very good operational leveraging and a very big dilution of more than two percentage points. Practically in all areas, we were able to hold our SG&A, G&A growing very little, e-commerce helping a lot in this regard, ZBB, the expense matrix management.
Many other projects having to do with our strategy of digital transformation that have been bringing more efficiency and more automation also in the brick-and-mortar stores, thereby gaining productivity. Equity income. A very interesting increase here. Equity income as a whole was 0.2 percentage points better than last year. On the next slide, we show you the performance of our EBITDA on a quarterly basis, the highest EBITDA in the last five quarters, due to the fact that we have already mentioned growth and sales, a positive contribution to our e-commerce. We have always said that there is a positive contribution from e-commerce to our result and dilution of operating expenses, improvement in our partnerships, financial partnerships. On the next slide, our financial results. We also diluted our expenses, both prepayment of receivables and other financial expenses, 0.4 percentage points.
Reminding you that interest rates started to drop now, the benefit from this drop should be seen over the next few quarters. I would like to mention that the cost of capital has already started to drop. We had just approved an issuance paying 109% of the CDI for one year, 112% for two years. At the level of spread, much lower this year than it was in the last couple of years. With that, we have a good expectation in terms of diluting our financial expenses. On the lower part, we show you the performance of our working capital. We started to report it adjusted net of receivables that are practically cash, the best way to look at the working capital was this one.
According to this concept, we improved BRL 380 million in 12 months in our working capital in practically all accounts. We improved the turnover of our inventories, it was 66 days, which is very good for one first quarter. Growth of e-commerce has been helping us a lot in that sense. Another benefit coming from multi-channel, all our inventories are integrated and the turnover of inventory in e-commerce, of course, is faster. It has been helping us in terms of improving our turnover. At the same time, we were able to increase the average term in a very healthy manner and sustainable manner without increasing the COGS. Also we reduced our account regarding taxes and other accounts, both assets and liability accounts that are sustainable. We generated BRL 380 million in cash coming from working capital.
With that, plus the results from the operation, BRL 400 million reduction in our net debt and leverage of 1.6x to 0.5x EBITDA. One of the lowest leverages of our history. On the next page, net income on a quarterly basis. In the first quarter, it was our highest quarterly net income since the IPO, even higher than the fourth quarter of last year, with an ROE, a very interesting one, around 32%, and a net margin of 2%. On the next page, we talk about Luizacred, a major highlight as well. Total sales of Luizacred, 22%, total billings. Inside Magazine, it grew by 45%. The participation of the Luiza Card in the sales of our brick-and-mortar stores reached the highest ever level, 30% this month. Together with about 10% of direct consumer credit, we are able to finance about 40% of our clients.
We were able to grow the billings of Magazine Luiza Card, at the same time reducing all the delinquency indicators, highlighting NPL over 90 days, dropping 3.6 percentage points. At the same time, we increased our coverage ratio, we reinforced our provisions and the coverage ratio from 121%-132%. You can see that the Luizacred result was very complete, growing billings, growing portfolio, reducing the level of provisions by over 20%. Already seeing the first results of the cost of funding reduction and one of the highest quarterly profits, growing 50% with a return of almost 30% as well.
Lastly, we repeat our expectations for 2017, which are continue to capture the gains from the digital transformation project, developing consistently our marketplace platform, continue to gain market share sustainably, focus on managing expenses at G&A as a whole and working capital, generating cash, a very important target for us, besides intensifying the opening of new stores and also benefiting from the reduction in interest rates in Brazil. With that, I would like to give the floor back to Frederico.
Thank you very much. Thank you, Roberto. Now, I would like to open for questions. Ladies and gentlemen, we will start the question and answer session. In order to ask a question, please press star one. In order to remove your question from the queue, please press star two. The first question comes from João Mamede from Santander. Good morning, everyone. Fred, Roberto.
I would like to talk about the performance of online sales in the first quarter. It was more positive for retail. Even taking into account this macro increase, your online performance was spectacular, much higher than anything that might come from the macro side. We know everything you have been doing the last two years in terms of digital and all the initiatives. I would like to know if this quarter, Fred, there was something especially contributing to this performance, because the comparison base was already very strong. On this very strong base, you were able to accelerate vis-à-vis the fourth quarter of last year. Maybe you could give us some color about that. The second question is about something that you said about rationality, more rationality, and competition in the first quarter.
What draws my attention is the fact that as of last year, beginning of this year, many of your competitors, at least some of the large players, also started to tap into the benefit of that. This could be a trap because it creates a certain cushion for more aggressive behavior on the part of some competitor maybe wanting to gain market share using part of this benefit. Apparently, based on what you said, this did not happen. I know it's difficult to talk about what competition is thinking, of course, but I would like to know if you have any view about that. What happened to lead these competitors to have a more rational behavior?
Thank you, João, for the questions. There are two parts in your question. In fact, two questions.
The first part, I think Eduardo Galanternick, our executive, our E-commerce Officer will be able to answer. But overall, about E-commerce specifically, I think it's important to notice that E-commerce growth, if you look at last year, you will see that in the last quarter, we already had a good performance, about 40% increase, if I'm not mistaken, the last quarter of 2016, and now going to 50%. The operation is going very well. We have a very good operation with a very good performance on the part of our team and a positive result as well. I think I like to say this because there is a market component there besides our execution. The market is a market in which all the players were losing a lot.
When you get into a crisis, when you have a high interest rate and the market is tough and liquidity is very low, the situation becomes impossible. What I have been saying for a long time, since the IPO, during our calls, is that at some moment in time, the online market would have to become rational because the cash burn could be sustainable for some time, but cash burn has to end because shareholders want to have a return. The online market and the operations that were losing BRL 100, BRL 200, BRL 300 and BRL 1 billion of cash burn per year, these operations will have to revise their strategy and this is what is going on.
You have to pay your bills, you have to pay your suppliers, your expenses, your employees and you have to generate cash for that, and you cannot count on the market always in order to raise funds. This change in online becoming more rational is even more important and deeper than the offline market. When I talk about rationality, I'm focusing on the online market that is trying to become more rational. Although the model that I see, which is not a multi-channel model, it's difficult to get to a rational level. There is a cost advantage also vis-à-vis the online only because the cost of online are divided with the offline and the multi-channel model that we have been developing for the last 17 years is operationally superior.
I am able to work and operate with margin levels and profitability levels that the market is not able to. Afterwards, Eduardo will talk about the specifics of this operation, then I will come back to answer your second question.
This is Eduardo. Good morning. In relation to the growth in sales, it was very well distributed between conversion, ticket, et cetera. Regarding calls or visits, it was because of the mobile. Hits. It is because of the mobile platform that we have 5.4. An application that has a good conversion, so the migration of traffic to this device is not impacting negatively our conversion. Conversion was also impacted by a reduction in shrinkage and also a decrease in the delivery time and all the efforts that we have been making distributing the merchandise among our DCs. The impact of the store pickup as well.
Overall, the result was driven by many factors and the calendar was very strong. We had a fantastic sale, fantastic promotion, which is important in the first quarter with a very good result. March itself was an excellent month with a favorable calendar, with no holidays. We had a very strong IT fair and we are very good in IT. We have the second Ebit with a very high market share, over 20% market share in this category. It's an effort made by the team as a whole of dealing with all the details and our execution has many details and we are working on that. João. Regarding the market as a whole, more specifically tax issues. I believe that the market has to become rational. There were many operations in the red and maybe they benefited from some legal Perhaps they can improve a bit.
I have always said, I have always believed that at some point in time, this path towards more rational operations and that really bring return to shareholders is irreversible and this is what will continue to happen over this year. I do not think this is going to change significantly. I do not expect any big actions price-wise from the competition. I think the competition will probably have more structured operations and maybe there will be more liquidity for SMEs. In this sense, we can expect maybe a fiercer competition, but nothing more aggressive in terms of reducing their margins. I think nobody's going to play this game because this is very dangerous at this point in time and I believe that even for the future, besides being dangerous, it's not good from the viewpoint of generating value to shareholders. One last point very quickly, working capital.
Beto, you made some remarks about the dynamics and how growth changes the dynamics of working capital because of the fast growth of internet. Can you quantify this improvement that you are achieving? Because at the same time, the growth of the company demands more working capital. Could you give us an idea of how much came from this change in channel? Because e-commerce will become more and more important. How much more help will you have from e-commerce in your working capital dynamics?
Thank you, João. Well, let me give you my view. We have negative working capital receivables. Ex-receivables, we have more suppliers than our inventory, and we are able to grow by generating cash. Regarding our receivables, this is seen as almost cash, and we improved even this account. Let's focus on the explanation about inventory.
We improved by seven days the inventory turnover, 73 to 66 days. We improved the inventory turnover in both channels. Inventory turnover of e-commerce improved a lot, and it was already lower than the brick-and-mortar stores. It's important to say that in the brick-and-mortar stores, we also improved our inventory turnover, and we grew again. It becomes much easier to improve inventory turnover when sales are growing as well. Last year, we didn't have growth in our brick-and-mortar stores. You have the sample inventory that is almost a fixed cost. You cannot dilute that. When we started growing by two digits in our brick-and-mortar stores and improving inventory turnover of these temples in the brick-and-mortar stores, e-commerce also improved, and the turnover was lower than the average. All the factors were positive drivers.
I cannot quantify that, how much came from e-commerce and how much came from conventional stores. The two channels improved a lot their inventory turnover with a positive effect of the mix, which is a higher participation of e-commerce. As you said, João, this is a trend. As e-commerce grows structurally more than the brick-and-mortar stores, we have the opportunity to continue progressing in turnover of inventories. On the supply side, we have joint purchases. If we have the opportunity to improve that will be good. We already have a very healthy condition there. We tend to increase this gap as e-commerce grows and helps in the working capital dynamics as a whole. However, it's already positive. Our working capital and net working capital is already negative. Marketplace also helps even more in the same direction.
We are very comfortable with our trend for working capital from now on. Very clear.
Thank you very much, Beto.
Richard Cathcart, Bradesco.
Good morning, everyone. I would like to ask a question about online and offline group. Do you have a higher conversion rate? Do you have current clients buying more frequently? I would like to know about this growth in sales on both channels.
Richard, good morning. Thank you for your question. As Eduardo said, just to elaborate on what he said, it was everything. We grew average ticket, we grew conversion, we grew sales to new clients. In order to reach the 56%, you have to have a good performance in all fronts. Highlighting mobile, we invested very much in the mobile platform. We made a high investment in our app. We have over 5 million downloads of our app.
It's one of the most frequently downloaded apps in Brazil and one of the leaders, undoubtedly, or maybe the leader in UP. It's by itself significant. The right execution and the right decisions, all that generated this result. I would like to remind you, it's very important that the e-commerce dynamics in the long run is positive. I'm not surprised with the growth of e-commerce, because this is a trend. The participation of e-commerce in the Brazilian retail is still 3%, 4%. If you see the figure of Mercado Livre in Brazil, it's about 60% growth. If the operations are well organized with good teams, very well-trained teams, with a lot of focus on sales and on growth, if you have all that, then you will have a good performance. It's not just the Magazine Luiza. It's a long-term trend, there is no way back about the increase of e-commerce and the total sales of a company.
Thank you. Another question. What about the performance of the C&A launch?
We have 100% of our stores. The participation of the store pickup, it has been growing a lot, and it's a major difference of Magazine Luiza because the clients that choose picking up their merchandise, they do not pay for freight, and also the delivery time is better. We are working to have 48 hours in many stores, in almost all the stores, and this is our target, to have 48 hours for the store pickup. It's not the case yet. The greater São Paulo area is already working with this timeframe as of April, if I'm not mistaken.
It tends to increase participation and give an additional contribution for the advantages of the website. When you compete with other chains that don't have this and that are online only, we will have a very big trump in our hands, which is the delivery and the cost of delivery and the timeframe for delivery. In over 17 states, we have really an invincible value proposition in this regard.
Thank you. Excellent.
Luiz Felipe Gonçalves with BTG Pactual.
Good morning, everyone. My question has to do with the growth of marketplace. In the release, you said that the assortment of the marketplace platform is 98% complementary to the B2C and Magazine, and this has to do with an exponential growth in the number of SKUs for the company.
I would like to understand, Fred and Eduardo, how you see the evolution of assortment between B2C and marketplace over the next few years as marketplace grows, and if you think about leaving some categories in B2C in order to favor some specific sellers in the marketplace platform.
Thank you for the question. The focus today, well, maybe in the core categories, we do not intend to leave them because we have a very comfortable position in which we are making money with 1P, with the categories that we buy and sell. We are having a good profitability from these categories differently from some players that have losses in this category and that have to accelerate marketplace in order to offset that. We have a very profitable operation in these categories. We are among the two or three and sometimes the biggest buyer from vendors.
For a commodity category such as 1P, it's very difficult for somebody to beat us, maybe some special line of products and inventory balance, maybe. In most items and in most sales, we will continue to be one of the most important, and this is the view and the focus that we have. It's just to supplement our categories. We already have suppliers selling directly, Electrolux and others will sell directly as well. We are at Multilaser and many sellers are selling directly, and the focus is on supplementary categories where the turnover is not so fast. We are not going to exit categories. We are probably leaving some SKUs that sell not so much and the turnover is slow or maybe the profitability is lower.
This is not a significant change such as the one that we have been seeing in some players in the market.
Thank you, Fred.
Guilherme Siqueira, Brasil Plural.
Hello, Fred and Roberto. Thank you for the question. You talked about sales, and I think this is quite clear, and your competitive advantage as well. There is a remark in the last slide in which you see a potential for growing stores as well. Is there any specific region with a higher potential for market share? You opened 18 stores in the last 12 months, if I'm not mistaken, and I would like to know if this is a pace of expansion that could continue or with the rebound of the economy, you could accelerate your expansion. One second question.
Among the highlights of your results, you have the good cost control with all the initiatives that you have been putting in place and also the dilution of SG&A with the growth in your revenue. With the digital transformation, with all the initiatives, mobile cash, et cetera, could you have a higher productivity gain, reduction in headcount in stores or increase of efficiency in sales per store employee? Guilherme, thank you very much. In fact, we have resumed the opening of stores. We opened Curvelo, Sete Lagoas now, yesterday, today. We already have many locations already contracted, and we intend to open new stores over the year. The stores, the brick-and-mortar stores are very important. I would like to remind you that our strategy has to do with digital, however, having the brick-and-mortar stores, because this is very important for our online proposal.
In the store pickup, we can have much better conditions, very competitive vis-a-vis the market. Increasing our base of brick-and-mortar stores, it makes all the sense in the world because it gives a positive contribution and also because it's a very important competitive difference of our model vis-a-vis the online-only players. We want to continue our pace of expansion. They are relatively small stores vis-a-vis the competitors, and we have a good moment in the market in which you do not pay key money, and you get very good cost per square meter. We are very well-disciplined in terms of opening locations that can stay open for 20 years, very lean stores, small stores, because a lot of what we sell does not have to be there physically in the store because it's sold on the mobile phone.
With the automation of the store, which is one of the pillars of our strategy, we can gain a lot of productivity. I don't need a lot of space because my inventory is in the cellular phone. I do not need a huge team because the salesperson receives the money in his mobile POS, I don't need a lot of people. 40% of our store people are in the back office. Looking ahead, we want to transform this back office in generators of revenue for the company and selling people. We reduced the SG&A of our stores, and we still have a lot of opportunity to reduce by means of automation and by means of mobile sales. It helped.
January, for instance, was excellent for the company, a lot of that was because of our big sale or promotion, which was very good also, because as we had all our stores with mobile sales, you can close a sale in two minutes. Without the mobile sale, it's 40 minutes. They gained a lot of productivity in peak days, such as this promotion, where you have hundreds and hundreds of people coming to the stores. We were able to grow our sales with the staff that was the same as last year. We grew sales with the same number of people, the same headcount. Automation of the stores is fundamental to reduce expenses. When we invest in store automation, there are two purposes: improve the shopping experience and reduce the cost of the store.
We want to have the store with a cost very similar to e-commerce so that it may be competitive. I believe that structurally speaking, the best way to do this is by having investment in all these projects that we have been carrying out to automate the POS and many others as well that we are implementing now.
two things. In the first answer, you talked about the synergy in your model. Does this mean that you're going to open more virtual stores as well or not? Do you believe it will continue more in the brick-and-mortar stores vis-a-vis the virtual regarding dilution and your strategy? Is it possible to quantify this? You talked about having a store productivity similar to the virtual store. What is the difference today? Can you quantify that? How much can you achieve more?
Answering your first question, yes, we intend to open more virtual stores vis-a-vis conventional stores this year. This is a strategy of the company increasing this proportion. However, we will continue to open both. Today we are inaugurating a conventional store, we have many virtual stores already programmed and scheduled and that were already opened in the last few months. The proportion between conventional and virtual, because this is very similar to what we believe it will be the store of the future. It's very high. The answer is yes. The second point, Guilherme, we don't really disclose this. We can even talk about this after the call, but as this is not something that we disclose, I cannot say anything that could be represented or understood as guidance. Overall, it's very difficult because e-commerce, the main cost of physical stores is the payroll.
70% of the cost of conventional stores, 60, 70% of the operating cost of this brick-and-mortar store is payroll. You don't have this situation in the virtual store. It's very difficult to get to the same cost base as the website, but we have to work on that ceaselessly because retail needs to understand that they have to reduce this gap, bridge this gap between conventional stores and the web. I cannot quantify this right now.
Thank you.
Ruben Couto, Itaú BBA.
Good morning, everyone. I have two questions. Could you talk about the progress of mobile, how much it represents of the total e-commerce sales, what comes from the app, and what comes from the website via mobile? Is there a very big difference between the average ticket and repeat shopping? Another topic. Could you talk about your gross margin and its dynamic?
Could you talk about the evolution of each one of the channels? Are they relatively stable? The drop had to do with the mix because e-commerce growing more, or is there some change happening in each one of the channels separately? Ruben, good morning, this is Eduardo. Traffic is over 50% in the last quarter, 54% sales already exceeded 30% of what we call B2C. Most of the sales comes from the app, although traffic is not the biggest part. In sales, it is the biggest part. We're improving our platform of the mobile site and continue to invest in the app and improving the platform of the mobile site. Doing that, we expect the participation to continue growing. Maybe Beto can help me to answer that. This is not a big mystery.
E-commerce works with a lower margin than the conventional store because the expenses are lower as well. What happens is that what we have in our result, what happened in the first quarter was the following, there was no change per channel in the margin. The margin of conventional stores vis-à-vis last year was stable. The margin of e-commerce vis-à-vis last year was stable. The market is more rational, there is no reason to have many changes there. The general figure changed because e-commerce gained share. A slight drop in the overall gross margin was because of the participation of e-commerce and not because of the dynamics of each channel. The counterpart of that is that the EBITDA more than offset this reduction of margin.
As e-commerce is a business that has a lot of operating leverage, when we grow and we increase the participation, SG&A drops because you don't need to contract people to grow e-commerce such as you have to do with the conventional stores. It's more productive, it's more asset-light, so to say, than the brick-and-mortar stores. Marketing as well is much more efficient than the conventional stores. It has a higher return than the conventional stores marketing. With this scenario, what happens is that we end up having an increase in EBITDA with the growth of e-commerce. This is what we have to look at, the operating cash generation. It tends to contribute to the operating cash generation.
Not to mention, this is something that everybody has to think about, the ROIC, because e-commerce, due to the fact that it is asset-light, it requires less capital, less investment. We are able to grow a lot. The CapEx level historically low, much because of that. Looking ahead, we will have to increase CapEx a little bit because we want to continue to open stores because of our multi-channel view. We are a multi-channel operation. We do not prefer one channel over the other. We believe this is a winning model, and it's the best alternative to tap into the growth of e-commerce in Brazil. E-commerce depends, in our case, the success depends a lot on the conventional stores. They go hand in hand. It benefits from more items available.
In some moment, for instance, over this year, marketplace products will be available also to the salespeople in the stores. One plus one is three in our two. If you add up the channels, it gives a much positive result, much more positive result. It's the old synergy that we're talking about.
Thank you for the answers.
Maria Paula Centurioni, BB Investimentos.
Good morning. Thank you for the results. Congratulations for the results, and thank you for the questions. Could we talk about the marketplace? Maybe you could give us some color about the number of sellers that came on board in the last 12 months, and how much marketplace already represents of the e-commerce sales. What have you been doing so that the SKUs be really a supplement to your portfolio? Have you been choosing the players that sell different products from the ones you already have?
Or you only allow them to sell part of their portfolio in your e-commerce? Same-store sales, how much came from price and how much came from traffic? I don't know if you give this kind of information.
Thank you for the question, Paula. About marketplace, we reached 220,000 SKUs from third parties. We exceeded 100 partners. In April alone, we signed over 30 partners, 32 to be precise, and very good ones such as Spice, Avon, Clima Rio, Havan which is growing a lot in Brazil, and are the big sellers in Brazil. Connect Parts, which sells automotive components, and Drogaria Onofre getting into this segment. MadeiraMadeira, which is a category in the furniture area. Drogaria São Paulo, Pacheco. Chocolate, now in Easter for the first time in the 60 years of history of Magazine Luiza.
This partnership with Magali was very good with the Lacta chocolate too. It's growing at full steam. Total focus in the introduction of new sellers and also introduction of new categories. You can see that they are complementary this year, and we will have competitor products and all kinds of products on our website. As we had to choose, we had to choose first the categories that really supplement what we have in about 98%. We are very enthusiastic about this, and the focus this year is not GMV, and it is really quality. With the same quality of service that we have, and improving the platform. With all these SKUs coming in may lead us to have a very good user experience. It's very user-friendly, and we are very much focused on doing this in the best possible way.
We have to do this consistently and accelerating it, but not in a hurry, not to the detriment of our service level. We are very focused on adding new sellers and doing this by maintaining a good shopping experience such as we have on the website. Very much focused on the product. When we say product, we mean platform, having a very good platform for the seller and for our customers as well. This is our focus. What is your second question? Same store sales of conventional stores. What came from price and from traffic? We do not disclose information, unfortunately. What I can say is that we grew in two aspects, average ticket and traffic.
Just one more question about retail. What is being done regarding your pricing policy to gain gross margin that you mentioned in your release? It was in e-commerce, Ana Paula.
What we said in the release was that one of the aspects that helped conversion was the improvement in this area. Maybe because our competitors were more conservative, our competitors got closer to the price situation that we had. Because of that, we increased our conversion to Luizacred. The dynamics that we have been seeing, a reduction in your direct consumer credit and personal loans.
Do you intend to continue to reduce and offsetting this with a partnership with Losango? Have you already reached a level that you consider as very good, and maybe from now on, you will be able to increase these portfolios?
Maria Paula, thank you for the question. This trend is ongoing in Luizacred. The focus of Luizacred is the Luiza Card, which is the instrument that brings more loyalty, and brings a better relationship with the clients and better service, et cetera.
Most of the actions of Luizacred have to do with the Luiza Card that is having, by the way, a very good performance. In direct consumer credit, for one year and a half, Luizacred reduced the approval rate and allowed us to have this partnership with Losango, which is also going very well. Recently we are piloting, we started a partnership with Santander Consumer Finance in a model similar to the one that we have with Losango. The idea in client financing is to have this in marketplace. We sell Luizacred products, but we can sell products of Losango and also of Santander, and so on and so forth. Luizacred, these portfolios of personal loans and direct consumer credit should not go up. We could grow in these areas with other partners.
Luizacred continuing to focus on the Luiza Card and growing Cartão Luiza, the Luiza Card. There is room for growth for Cartão Luiza, the Luiza Card in the conventional stores, e-commerce, and we have many opportunities for growth. Also in Magazine, Marcelo Ferreira is going to add to that.
This is Marcelo Ferreira. Thank you for the question. I would like to clarify one point. Personal loan is a product called Grana Extra, the extra money. This is a card. It's a personal loan. The credit card also has a category of personal loans, and we intend to continue expanding it. You don't see this in the portfolio. You don't see inside it. It doesn't mean that we have stopped giving personal loans that are not linked to the card. We give to old clients that we have had for a long time.
Thank you very much for the answers. Good day. We close the question and answer session. I would like to give the floor back to Mr. Frederico Trajano for his closing remarks.
Once again, I would like to thank you all for participating in our call, the analysts for the questions, and our team for the good performance of the quarter. Have a good day.
Magazine Luiza's conference call is closed. We thank you for your participation and wish you all a very good day. Thank you.