Morning, ladies and gentlemen, and welcome to Grupo Panvel's video conference to discuss results relative to the third quarter of 2025. This video conference is being recorded, and the replay facility will be able to be accessed at the company's IR website. Also, the slides are available for download at the same URL. All participants will be only watching the video conference during the company's remarks. After that, we'll start a Q&A session when more instructions will be given. Translations are available in both English and Brazilian Sign Language. To activate them, just click on the interpretation button and select the desired option. Before moving on, I'd like to emphasize that forward-looking statements are based on the company's beliefs and assumptions, and also on current information currently available to the company.
These statements may involve risks and uncertainties as they relate to future events which depend on circumstances that may or may not materialize. Investors, analysts, and journalists should take into account that events relative to the macroeconomic environment, industry, and other factors may cause results to differ considerably from those expressed in these forward-looking statements. Joining us today for the conference, we have Mr. Julio Neto, CEO, and Mr. Antonio Napp, CFO and IRO. I'd like to turn the conference over now to Mr. Julio Neto, who will begin the presentation. Please, sir, you may carry on.
Thank you. It's a pleasure to be here with you this morning. We are quite satisfied, quite happy with the numbers. Very good results for the third quarter of 2025. I'd say great results, to be frank.
If we look close, the results which will be published, especially around retail, are numbers that can be seen as great results, as very good for Q3. We saw a growth in sales in the quarter of 14.3%, which we understand as a very good result, especially considering that our basis for last year was already based on a growth of 17%. We are coming from a 17% base. On top of that, we grew further, 14.3%. Same stores performed in this quarter with a growth of 9%. Also, considering that the third quarter of last year, we grew by 14%. Once again, coming from a very strong base and on top of that base, significant growth. Our average follows on a growth path, reaching in this quarter an average sale of BRL 750,000 per store, which is a good number for mature stores.
We are on the verge of BRL 810,000 on a monthly base in sales, which is a sign that the company has been expanding its average sales per store. As for gross margin, an important point to emphasize is that it shows our focus on hygiene and beauty, where we are a company that sets ourselves apart in the market. We are growing at very healthy levels, very much in line with sales. We also saw a growth in operating results, very significant. Our adjusted EBITDA was quite satisfactory. If we compare with last year, Q3 last year, we saw a reduction in expenses, which was quite significant, and we were able to maintain that level this year, of course, with a higher nominal number, BRL 80 million for this year, as you can see on the slide.
As for the net income, all the numbers, just to be sure, all the numbers are perhaps less interesting. There was a drop, actually, when you compare to last year, but that can be explained by two important levers. Number one, a smaller distribution of interest on equity. As per a provision put forth by the BNDES, there is a cap of interest distribution. Of course, if we have interest at 15% every year, that's something which really hurts and does have an effect on that income. We expect interest rates next year, we'll see a drop, resuming lower previous levels. Our market share also grew by 0.3 percentage points in the quarter vis-à-vis last year. This is the 22nd consecutive quarter where we have grown our market share, which leads us to think about something interesting.
We heard from a company this week saying that the São Paulo market is closed for them. It's impossible to open new stores. That's something we do not believe in. Actually, all markets, to some extent, are somewhat closed. When we entered the Curitiba market back in 2010, we had no stores in the market. Over 50% was in the hands of two or three operators. Today, we have 13% of market share in Curitiba. If you work well, you will find your space. Those, I'd say, arrogant positionings are not helpful. We have also seen an important growth in terms of our Panvel product share, 32% growth vis-à-vis the third quarter of last year. That's something that really sets us apart. Our digital front continues also to grow. I'll be talking about that in a moment, but our participation has increased in the quarter, reaching 26.4%.
As we always say, we are a company that does not convert sales at the counter. We understand that digital is here to save time and add value in the relationship front. This has been changing a bit because we now have a different price fostered by the industry. We are now working on that because consumers pay less. We are trying to incentivize the counter sales, trying to convince consumers to download the app at the counter. That is good for everyone. For the coming quarters, we expect to see a growth on the digital front because of this incentive at the counter, at the point of sale. We had a quarter for free cash flow generation, which was also quite important. This will be a focus of the company moving forward, cash generation. We have gone through a period where we had considerable investments.
We'll be talking about in a moment after our follow-on. We made huge investments, not proportional to our size, which also affected our return on investment. Only now those numbers are changing. The company is now resuming numbers that the company used to have before those massive investments. It's important for us to generate cash so that we can, from now on, actually grow by our own efforts, by our own cash flow generation. It is a company that throughout the years has maintained an important caker, entering new markets, gaining new clients, customers. We've been growing 14.5% year-on-year.
We did an interesting exercise, which can be a guide for us to see that we have actually been having or seeing a growth trend not only in sales, but also in results, bottom line, which shows that this is a company that provides superior results. We look back to the third quarter of 2021, we see a growth of 16.9% in CAGR, way above the 14.5% we've seen throughout the years. If we go back to the EBITDA number from 2021 to 2025, we see a growth of 17.5%. From last year to this year, we see a growth close to 19% in EBITDA. It is actually a company that has been building not only sales growth, market share, but also obtaining results in a very accelerated pace.
On the digital front, as I was saying, this is something that sets us apart, a competitive edge. We have become specialized in delivering products at people's homes in a very fast manner. We will see that in a moment. Mr. Napp will touch upon that very soon, especially delivery times improving across all cities where we operate. As I said, this is our main competitive edge. When we consider other companies joining the market, marketplace, hygiene and beauty, nobody can deliver as fast as we can in none of the cities where we operate. We have seen a growth in digital of 42.4% in Q3. Our app grew 54.1% of share in sales, our app. Again, as the company grows 14% in digital, we have been growing by 42%. We understand this to be a trend that will continue to exist going forward.
More than half of those sales, more than half, is collected at the store. The store or the stores remain important for the digital front. Physical stores are key for the digital front because consumers' urgency sometimes is not compatible with next-day delivery. We need to be able to deliver products immediately after the purchase has been made via the app. We have 85% of our proprietary app. Of course, iFood, especially iFood, has been growing considerably its share and growing along with Panvel where we have a very healthy relationship with those partners, quote unquote. We understand those to be trends, and we need to be part of that and grow together with them. In terms of Panvel products, I think this is the really, really big competitive edge that we can offer.
I think this is more comparable to companies which focus on beauty like Boticário and Natura than with other players that focus only on drug stores. We have launched important lines such as the Verity line that you can see here on the screen. Panvel products have gained traction once again. They have grown 37% in this quarter, 32.6% actually in this quarter, 32.6%, with a share of 37.6% in the private label in the southern region of Brazil. It is, without a doubt, a very important competitive edge. It is the main topic of distraction when we reach out to our consumers and women consumers, especially in social media. We are a brand which is well-liked by social media, the social media audience. We have a very intense relationship with several influencers. We hold events. We send them our newest launches.
We have a very good footprint both in Instagram and on TikTok. That leads us to think and also to develop a strategy for us to sell our products outside of Panvel. That is an idea which is now being brewed inside, especially taking advantage of what marketplaces have to offer, doing the fulfillment within the marketplace. Where Panvel is not present, we cannot have efficient logistics. Because the brand is strong, is desired, is well-liked, we understand that there is an important market there, and we plan to tap on that in the coming quarters. On the next screen, just to give you an idea of our newest launches, this is for the last quarter, a hair line called Luméa, competing with CIG, ManDi, with really well-established brands, premium brands.
We navigate really well in the makeup sector as well, with a share of over 70% within Panvel. And our skincare product on the right-hand side, Dermaviti. It's also an important player in the skincare market at our stores. Once again, this brings about not only fidelity, loyalty on the part of consumers, but it also brings about 10 percentage points in addition to our gross margins when we talk about hygiene and beauty products. We understand that our own brands are, without a doubt, a huge edge that we have, and we'll be coming back to that frequently and increasingly invest in those product lines. If we look at the mixed growth throughout the quarter, we understand that we have very good numbers. Once again, those are numbers coming from important growth bases in the last year.
Hygiene and beauty grew 11.7%, coming from a growth base of 12% last year, and OTC, which grew by 12%, coming from a base of 21% last year. We did not really feel, if you will, a lot of struggle to grow that we see in other competitors, in other peers. We continue to grow hygiene and beauty and OTC, even though we see new entrants in the market. The CAGR numbers show this is a significant growth. If we compare 2021 through 2025, as I said, we grew hygiene and beauty from 16% and OTC 17%. They may highlight under generics, which has a CAGR of 22.1% for the past years. Of course, taking advantage of the share to grow, especially in the south of Brazil, where we have, I'd say, another share in generics.
I think that generics trend will continue to be important and we should continue to grow, not only because some patents are being broken, are expiring, right? Going forward, the main standout for next year will be the Ozempic patent, which will work with a local laboratory after that patent expires for Ozempic. This will represent an important market share. Without a doubt, this will provide a boost in the sales of generics. We continue to grow share across all categories. It is important also to have that in place, growth share across the board in the south of Brazil when compared to the previous quarter. All those are numbers, as I said, are numbers that we consider to be really good. Looking at the market, we understand they are great. Not only good, they are great. Now I turn it over to Napp.
We continue to go into detail in our numbers. Over to you, Napp.
Thank you, Julio. Thank you all for being here today with us. We're going to be looking at some other numbers. As usual, we start with sales. As Julio mentioned, we have a very robust sales growth in the third quarter. I would like to highlight two components. Number one, most of our growth is based on an increase in the amount of service, not only the increase in tickets. That is important because when we look at the market as an overall market, growth happens in tickets vis-à-vis GLP-1. We have managed, not only in the third quarter, but since last year to today, we have managed to have a much higher volume in customers' flow to our stores.
That flow is increasing way above inflation, in addition to a higher ticket that shows our growth in sales happening across the board. Also important to note that we'd like to share with you, and we do this every quarter, it's the growth of our average life of our stores. What stands out in the third quarter for 2025? Here we're looking at our store base, including stores still under maturation. Today, we have only 2% of our base selling up to BRL 300,000 throughout the years. Focusing on capital allocation, we have been working hard to improve average sales. When needed, closing operations where we have low sales. That has been ensuring higher quality for our numbers, better results.
If we were to look at the number or percentage of stores which grows more than BRL 1 million, we're getting close to 20% of our mature base. Very significant numbers. In addition, it's important to reinforce when we compare the average sales for Panvel with average sales of other peers in the south of Brazil, as you can see on the right-hand side of the slide, the difference, the gap continues to be quite significant. In addition to that, we have a very robust growth in same stores and also mature same store sales. When we look at those numbers, we see that they happen on top of a very strong basis. Having grown over 14% in the third quarter of 2024 and over 11% in Q3 2024 for mature stores is really, really something important when you look at the market. Nobody has grown that much.
That is why when you look at the compounded growth, we are quite happy with what we see with the work that is being done by the whole operational team to bring in more customers, to make them loyal customers and so on. We are going to be talking about customers and clients in the future. Along the same lines, we can look at our footprint. For the past 12 months, we have opened 51 stores, over 300 stores since our IPO. We have doubled the number of stores in our base. It is only natural that throughout this period, we still have maturing stores which are impacting the result. As has been said before, and we will be showing later, all those numbers are coming back as that base matures. When you look at the breakdown of market share numbers, we grew 0.3 percentage points in market share.
We grew across all the states where we operate, across all categories. I would like to highlight one piece of data here, which is the data, a piece of data about the quality of our growth. Our growth, when I compare with the other drugstore chains and when I compare with other associations and franchise stores, our growth came from volume. I just mentioned that we stood out because we have a higher flow of customers. Those numbers show that most of our growth came from an increasing volume, much more than what happened with our competitors. Also important to note is that our expansion also has contributed more than the expansion of others in terms of sales growth.
In other words, we can see here the rationale behind that both same store performance, which is good, and the performance of, just as the performance of maturing stores have exceeded our expectations on both fronts. Now moving on to gross margin, worth mentioning, we worked really hard throughout the quarter to mitigate the impact or the pressure that the GLP-1 has on retails. When you look at only at retail, we saw a drop of 0.2 percentage points from the third quarter 2024 to 2025, third quarter. That pressure would have been greater if we only took into account GLP-1.
Because of this higher penetration of generics and Panvel products, private label, along with a very assertive pricing strategy and also a very good work with our Panvel ads and supplier negotiations. W ith all of that, we have assured our margins, which really sets us apart from the rest of the market. When you look at the group gross margin, it is also worth mentioning that last year we still had our wholesale operation, which was closed in December, and that change in business mix is responsible for the group's gross margin having grown by 0.8 percentage points. That same mix effect that improved the margin, it hurts expenses, which is another focus which is quite important that we have.
When we look at the third quarter now and we look at the total operating expenses, we have reached the best level in the year when we add sales expenses and admin expenses. We are now diluting those numbers, and that dilution in terms of sales expenses, not only it's not clear enough because of that effect coming from the wholesale mix. When I remove wholesale mix from the base, we have a 0.6 percentage point increase. In Q3 2024, we benefited from the provisory measure 230, which brought about a benefit to mitigate our payroll, which improved our numbers by 0.2 percentage points. Once again, after the floods, we took a series of measures to renegotiate with suppliers for service surprise, and we froze our hiring processes, which has also helped mitigate expenses.
That makes it clear that our expenses on sales is flat when compared to last year. Next year, that number should be eliminated. Next year, we will not be able, we will not need to mention that. This will start this quarter, and it will become even clearer in the fourth quarter. It is already showing in G&A expenses as well. Moving on, we are now going to see our EBITDA numbers. We have reached the best result in 2025, BRL 80 million, a margin of 5.4%. Year to date, first nine months, we are already over what we had last year, 0.3 percentage points. When we look at the past last 12 months within the third quarter, we are already above last year's number by 0.4 percentage points. Why is this important? Because this is the new Panvel with a higher profitability.
That's the new company that we'll see in Q4. This points to a very good end of the year, way above the growth in sales. As for net income, not different. We have reached the best, highest net income, both in nominal and percentage terms in 2025. It's totally related with our good operating result. It wasn't better because of two impacts. One, coming from interest rates. Let's remember that at the same time last year, even though we're not really leveraged, interest rates were close to 10%. Now they're close to 15%. There's an impact of 0.2 percentage points in our financial expenses. Also, one-off impact, in fact, when we capture the lines on BNDES for credit with a very low cost, I'll go into detail in a moment. One of the provisions required us to discuss the distribute a minimum interest on equity.
We will, because we distributed less interest, we have an impact of 0.3 percentage points in our income tax. That explains why our profit level was not higher than what it was. We are coming close to one of the main highlights of our quarter, which leaves us very proud of the good job we've done in operation, inventory management, and so on. Our cash conversion cycle. In this quarter, we have reached the third consecutive quarter where we generated cash. When you look at free cash generation, we generated BRL 16 million, an operating cash flow over BRL 73 million. For the third consecutive quarter, once again, this is totally in line with a good job which has been done around the conversion cycle, having improved by a six-day cycle. That has led to decreasing our debt.
We already have the lowest debt level in the pharma industry. We are now becoming increasingly more deleveraged. We are now at one time EBITDA over equity. All that also leads to a debt which has a cost which is relatively low. Our average cost of debt is below CDI. To be more exact, our cost is CDI - 1.3%. When we look at all of that, it only reinforces the solid capital structure that we have, which allows us to continue to invest, continue to grow in a very healthy manner. We cannot forget that if we are now selling or operating, we are also providing excellent service to our clients. We are now, we are also very happy to share with you our NPS as we close the third quarter. We have improved our NPS when compared to previous periods.
Before, we were around 79, 80 points, which are already good enough. We closed the quarter at 82 points NPS. If you operate in the retail market, you know how difficult it is to reach those levels. It is difficult to import that a point, a single point, it is difficult. I just want to say congratulations to all our team on the field, in the office, in the back office that allows our services and products to reach our customers' hands with the quality and expedition that they all deserve. Now let's focus a bit on our strategic pillars, as we do in all of our conference calls, and specifically in terms of expansion, digital clients. What I'd like to talk share with you, Panvel, very consistent. We continue to focus on the south, opening start in São Paulo.
Always focused on standard models, our city with over 100,000 inhabitants. We're not to try and find opportunities in smaller cities. There's room to grow in cities of up to 50,000 as well. In the city where we operate, it's important to reinforce we are already in a market, the pharma retail market, which historically grows above inflation. In the south region, it continues to grow more than the national market. That's a growth lever, as we say, which has already been priced in. For us to continue to capture that, it is important to maintain our quality. Quality will appear also will appear in our numbers. We like to share always the results we have at the store level.
We are quite happy when we can see that at every quarter that goes by, when we break the numbers down by state, stores EBITDA, that is EBITDA for all, that is the contribution from all the stores, that those numbers have been improving consistently. All states are getting closer to our benchmark, which is Rio Grande do Sul, the second column. In Rio Grande do Sul, our results is 12%. In Santa Catarina, we have already exceeded 10%. We are now getting close to Paraná with something close to 10%. The results for São Paulo are also good. We will not stop growing. We are now close to 8%. I can share what those numbers were. Just check Q3 2024 and the evolution. The progress is clear. The quality of the work being done both in mature stores and in expansion is also clear.
You see also on the graphs on the right-hand side, the room for growth, the opportunities we have a long way to mature stores. Those numbers tend to grow in the coming quarters. When we talk about the physical world, we need also to remember that it is the key for the digital world to work. If we did not have the physical store, the brick- and- mortar store, we would not be able to provide such a good service to our customers. We would not be able to be as fast as we are. For retail, the retail market, physical and digital are totally entwined. I would like to share with you the numbers. We have continued to innovate and to pioneer in several fronts. I have already shared this with you last quarter, the exceptional work done with AI, our Sophia AI assistant and our WhatsApp service.
The numbers are quite robust. Sophia works really well. I would encourage you all to check it. It has serviced over 300,000 customers only in Q3 alone. 68% of our clients that used to refer to a telephone before a telephone call, they have migrated to the WhatsApp platform. We are able to solve more issues in less time. If I may, I have been using AI a lot from other companies, other sectors, other industries. I think, I'm sure actually, that our product does stand out. We are now working to bring sales into the AI platform because we strongly believe that very soon, very soon, e-commerce will migrate to a model where you'll have more conversation, which is more prone or more prone to platforms such as the one we have.
Sophia will not only be a WhatsApp channel for inventory consultation or price checks, but will be a sales channel per se within our app. That is the direction we are going to be moving to, I think, I believe. That part of AI, generative AI as it is called, will reach customers and clients much faster than we would have imagined. We understand that the impact on their relationship with customers will happen even faster than when people talk about cash improvements, inventory improvements, and checks and so on. I think the relationship part will advance much faster. Generative AI, once again, in relationship with clients and customers for sales or CRM, when we treat clients and customers as individuals, this will happen faster. We are getting ready to see that materialize sooner than later or as soon as next year. Okay, thank you.
Linked to all of that, we continue to invest in deliveries. One of the new things in the quarter is the geo-referencing facility. We have really improved our algorithms that define from which store customers will receive what they're buying. The objective is twofold. We aim at having the full basket to avoid breakages and also to achieve faster deliveries. The results are really impressive. We like to share those numbers. That is what we're doing now. Our average delivery times within the different modes across the four states where we operate, we are very well positioned, delivering in up to 40 minutes. That pledge to deliver up to 60, we are way below that target, right? Not 60, but 40, between 30 and 40, way better than our original target. This is allowing more stores to participate in delivering.
That, of course, increases our company's productivity levels. We are doing a very good job, not only focusing on the clients, but also improving productivity for the stores. We are confident that when you have an ability to deliver fast and efficiently, that is key for such a competitive market, including marketplaces as competitors. We have been doing this for a long time and doing it well. We continue to be well- positioned to face the upcoming competition. As I mentioned before, we talked about digital, about physical. At the end of the day, we're also trying to digitalize our customers. We realize an increase in digital adoption by customers. We need to start getting our stores ready for that. Another innovation we are embedding, showing how pioneers we are, is our self-checkout possibility.
In several cities, our customers favor that, especially those who are not buying medication or drugs. They want to buy hygiene or beauty products. They want to do this faster. Adoption has been quite fast for the self-checkout. We moved from zero to 100 stores with screens and self-checkout podiums. Very fast growth. Customers are already educated because they do this everywhere. Apparel stores, grocery stores, this is all around on the retail industry. Customers' education to use that is already being done and will help us roll that out much faster. What we have realized at the store level is an increase in sales because the availability of the stores increases significantly with self-checkout. It is once again focused on convenience products, right? OTC and hygiene and beauty, of course, prescription drugs will be still requiring a personal service. Yes, correct.
We talked about customers and clients throughout the presentation. We need to close talking about customers again. We continue to try and invest on loyalty. We have a very important fishbowl, if you will, 27 million customers which are registered or have a file. Within this fishbowl, we try to fish them and make them loyal, more loyal, more digital. We have been growing those columns, those bars, and those numbers are in line with our sales numbers. The new thing we have to share now in the third quarter is this clusterization of our premium clients. We are now trying to identify our clients individually within the app. Those customers will be favored by special benefits. How can we improve their journey?
By offering a benefit package that makes sense to them, that adds value to them, because we want them to come back to buy again. We want to appreciate them for that. This is already available. We are now going to test other hypotheses and then increase the basis and make this increasingly more material in our consumers' everyday purchasing journey. To wrap this up and looking at what we have done up until now and where, as we are getting close to the end of the year, it is important to share some numbers with you. Some of those numbers have already appeared during the presentation. To talk about Panvel's journey for the past few years, since our re-IPO, we have made several investments. We have a chart around CapEx, which shows clearly that we have shown our investment level.
That was important to be done at the time we opened the DC, open stores investing technology. For some time, especially 2021, 2022, and 2023, we invested a very high percentage of our EBITDA as CapEx. Of course, that brings about impact on the company's return levels. What is important to see now, after having gone through that period, after we have normalized our investment base, we are now starting to harvest the benefits or reap the benefits of that. We have changed our EBITDA level with very good trends. We are already changing the levels for our ROIC, which is now reaching 11%. We are going to close the year at around that number, 11%. That is the trend we expect to see at Panvel for the coming quarters. When we look at our main levers, all moving parts are there.
We continue to operate in a very good market. There is no doubt about how good the market is. We operate better than the average. We see more robust growth when compared to our peers. Our fourth quarter historically is our best in terms of sales. That is not only valid for next quarter, but for the coming years. We have been working, as you can see, to improve our store pool, to improve our average sales per store, and improve returns. Of course, results will continue to appear. Because of our characteristics, we believe in a well-balanced mix of products, which will be needed and perhaps sufficient for us to mitigate growth of categories as GLP-1, which is happening and has a very promising future. Panvel, we are quite well positioned, be it through our private label and what we do at the store level.
That's something you've seen for the past quarters, and we should expect to continue to see that. All of that well linked with cash generation. We have a very solid cash cycle, as you've seen for the past quarters. We won't leave that aside. We strongly believe that generating cash, being sustainable, generating return, those are the main assumptions for this business. That's what we're trying to deliver. We'll continue to do that for the next quarters. This is it. We are now ready for the Q&A. Thank you so much for your attention so far. Thank you.
We now start the Q&A session for investors and analysts. If you have a question, please click on raise hand. If your question has been answered, you may remove yourself from the queue by clicking on lower right hand. Our first question comes from Mr. Vinicius Pretto from Itaú BBA.
Over to you, sir.
Thank you. Good morning, Julio, N app. Thank you for taking my question. I'd like to explore a bit more the topic of your private label. Once again, it stood out in your numbers. I'd like to understand what opportunities do you see in two fronts. Julio, you mentioned the possibility of exploring the strength of the brand through other channels. Where is the potential there? Food, marketplaces, are you piloting something there? Also, would you say that if you expand across those new channels and as you try to strengthen your brand in social media, if you see opportunities to increase your geographical footprint, maybe when you combine all that, you might be able to reach other states, have your brand present in other states and less dependent on the stores?
Also in terms of private label, OTC drugs, where are you on the OTC drugs front for private label?
Thank you, Vinicius, for your question. We have realized that we see that there is a marketplace, market for hygiene and beauty. It is a habit which is being created, if you will. I believe in making the most of the waves, not facing the waves head-on, but surfing the waves. We have always wondered how we could place Panvel products in a way that it would keep its edge for us. In other words, to bring it in the company. Because of that, we have always tried to make our products available at Panvel stores. At the same time, this, of course, limits us geographically. Of course, it generates some dissatisfaction when you work in social media. You work in social media across the country, right?
Some people in other geographies have no access to those products. Why not make the most of the logistics we already have in place for marketplace or Mercado Livre, Amazon, to better serve that wave, if you will, and make those products available to a higher pool of customers? Not as logistically efficient as we have 40 minutes, half an hour, or the immediate availability at the store, but some other way, right? We are looking at it. Sometimes overnight, one or two days, we could try to place those products across the country, taking into account that 30% of that line is manufactured by our own lab, Lifar. The laboratory also services other drugstore chains, other brands. Why not scale up? I understand your point. We actually surveyed or tried to explore the partnership with Panvel Yasuker. This was way back.
We would place our brand within the grocery stores, but that never prospered. That was not a problem for us at the time. Even today, our footprint in São Paulo is still small, right? 14%. They have a very good average sales level, but it is a small footprint. Today, digital channels are, without a doubt, more meaningful. In terms of drugs, it is a smaller opportunity as I see it, but it is there. We created a brand which has to do with our history called Velgos. There is a limitation in the pharma retail to use drug brands from the company, but you can use a third name. Our brand will be called Velgos. What we have seen is an important drop in the prices of common drugs, right? Generics and so on.
Maybe that opportunity might not turn out to be that meaningful because we see that the market players, the ones that manufacture those drugs, they're sort of stepping back. If it comes to a point where it represents something important that will lead good margins, we would never have our own brand with lower margins, of course. Lower than a margin coming from a supplier wouldn't make any sense. If the economics proves to be positive, we will move towards that. The major opportunity is under our own products. Inside Panvel, you see a growth of 32%. We change in terms of innovation. We have a new team in place. We have a new packaging partner. We are innovating. You can expect to see very good performances both at Black Friday and then Christmas for Panvel products. Panvel products are back in the game.
In the world where you see a lot of commoditization, having a private label with such reputation is really an edge that we have.
Our next question comes from Mrs. Larissa Sumner from Maxb. Over to you, ma'am.
Good morning, Julio, Napp. Thank you for taking our questions. Congratulations on your results. I have two questions along the lines of the categories. To follow up on the previous question about the private label, we saw that private label has been very relevant to ensure HPC performance. If you could comment on what you've seen in terms of performance when you exclude private label performance, that would be nice for us to have an update on that. Discussions that you had with the industry. That would be good to have an update on that.
Also, as Julio mentioned, just at Black Friday, what you expect to see happening in Black Friday, private label, and so on. If I can also make a third question, talk about GLP-1. I mentioned that the category share has increased throughout the quarter. If you could break that number down. Also the availability of products for GLP-1, which has been a limiting factor. If you could also update that, that would be nice. How do you expect things to happen in Q4? Thank you.
Thank you for your question. Starting by the final question, GLP-1. I have to confess, I've never seen such a huge phenomenon in the pharma industry as Mounjaro, right? Ozempic, even though it still shows important rates of growth. Ozempic and Wegovy, right? The same products for different things. Ozempic for diabetes and Wegovy for weight loss.
They still grow, but they have found their limit, their balance in terms of inventory. In the case of Mounjaro, the situation is completely different. Inventory levels are lasting, or inventories are lasting three, four days, especially the 2.5 and 5, those are cheap. The 7.5 still lasts a little longer because it has not found a relevant market yet. An important thing to say is that we have been increasing the demand for that product. Panvel has always been a company which was recognized for working well at the higher income brackets of the society. Those are high added value products. At the end of the day, we turn out to be the preferred channel for manufacturers. We are seen as those who sell faster. Mounjaro has not found its limit yet, which is amazing, impressive.
I'm quite curious to know how far is this going to go. Everything we buy is out the door in no time. It is a great opportunity we have at the table because Mounjaro's customers are already a Panvel customer. As for HPC, we have been growing. If we look at 11 and 32, it's difficult to do the math. Private labels have been driving the growth in hygiene and beauty. We've seen an important reaction in categories where we had been suffering, children's medications or products and skincare. We have been having meetings with the industry. For next year, I'll be celebrating 30 years of retail. In 30 years, I have never seen a supplier that liked to concentrate their businesses on one or two players. Never seen that. That's not good. That's not healthy for them.
We see the industry that we will look at a marketplace with one solution and short-term solution. You will see a growth in the market which might not be growing as they expected. We see concern on the part of the industry, concern about not having a blockbuster for clients. Also relevant in terms of skincare, the brand destruction we see happening at the marketplace level. Those are products that depend on the right pricing point, a higher pricing point. When you see a discount rate, which is too significant, they become very similar to massive skincare products. Marketplace represents for the industry a characteristic that destroys brands. We see several suppliers concerned about having their brands destroyed. They are now prioritizing the launches through retail channels which do not offer that kind of discount.
They prioritize sometimes drug stores and not marketplace. They're also thinking about creating different SKUs, different presentations so there's no overlap across those products. We see the industry somewhat reacting or responding and concerned about that. I think from now on, we will see more allies on that front. Based on the numbers you've seen for e-commerce, Panvel, in terms of delivery to consumers, we're very fast, very efficient. There is no comparison. Nothing compares to us. We are quite expedited in terms of delivering at the customer's homes. Products do not give you notice when they're going to be running out. A shampoo, I'm not going to wait until tomorrow to buy another bottle of shampoo, right? I need to have fast, immediate solutions. We want to be part of that solution.
Black Friday for us has always been a very important date. We've seen that if those who didn't see it as important, they had to do something. The industry fostered that. The industry looked at Black Friday as a very important channel. November has become the highest- selling month for the company. It used to be December because there's money out in the market and because you have always worked on preparing gift kits and Christmas specials. Now November has become the highest- selling month. We are quite ready, both in terms of logistics of products. Most products are already at the stores. We start getting ready in October so that November starts off with our best foot on. Of course, we concentrate efforts on the last week of the month. It's like Black Month, not Black Friday in Brazil.
Black Week, the last week, is of course the most important moment. We expect to see good things happening yet again this year. Suppliers do see Panvel as a good channel to participate in this game. We have a very efficient logistics capability. We are seen as a preferred channel for suppliers now for Black Friday, Black Month. You have said it all. The only bit of information I would like to add is that both Black November and Christmas account for significant sales growth for us. We are quite prepared for that in terms of inventory levels and logistics conditions to be able to compete well for those upcoming events.
Okay. Thank you. Congratulations on the numbers once again.
Thank you. Next question comes from Mr. Ian Siskin from BTG Pactual. Over to you.
Good morning, Julio, N app. Two questions. Number one about GLP-1. Can you share your current share in the category in the south of Brazil? Do you have an overshare? What kind of share do you have in this category? Still on that topic, I'd like to understand a little better what would be the gross margin levels you see there. We understand that for the consolidated numbers, it is an offender, but how is that behaving? How do you imagine those things will move forward next year when we have generics coming in? That's it. Thank you.
Thank you. As for GLP-1, we have a very high share number. We are overshare in the south in GLP-1, almost double- digit, on the verge of becoming double- digit. It is a very important category that you continue to stand out. We have a very positive view on that.
When you look at the gross margin topic, we know that it does generate some pressure. It is a pressure, but it could be positive because we're talking about a lower margin on the top of a product that costs over BRL 1,000. If I have a margin of 70% on a product that costs BRL 20, what would I rather sell? It does improve our ticket, of course. We look at those products that are about to come under GLP-1 and also net margin, of course. That is net cash we're talking about. We look at the future and we see new products coming in, generics and similar products coming in that may have an effect on price, no doubt. They also have an effect on gross margin. Not only that, they'll provide more access.
Within all that success that GLP-1 has, let's remember we're talking about products which have limited access. As new entrants come on board, we'll have more customers and more sales. The whole market will win. Everybody wins, no doubt. That's something we only see from a positive standpoint. And Panvel has positioned really well along that front.
Thank you.
Thank you. The Q&A session is now over. I'd like to turn the conference back over to Mr. Julio Neto for his final remarks on the side of the company.
Thank you so much for participating, for your questions. We continue to be very optimistic, especially with this last quarter coming up. It is a quarter for us, as you know, very important, Q4 coming up. We'll see in March next year, between March and April, to discuss a bit more about the year.
We understand we have a very good year ahead of us. 2026, we will continue to be optimistic about what we see coming forward. Thank you. Thank you. We remain available for questions. Our IR team is available to answer questions, make comments if you have. Always available. Have a nice day, everyone, and a good weekend, everyone. Thank you.
Grupo Panvel's video conference is now over. Thank you all for participating. Have a nice day.