Good morning everybody, welcome to the Centauro webcast, where we will discuss the earnings result for the third quarter 2020. Speaking here is Pedro Zemel, Centauro CEO. I have here with me José Salazar, our CFO and IRO, and Daniel Regensteiner, our treasury and IRO officer. We're going to separate the presentation in three parts, speak about the resumption of our operations, remark on the results of the quarter, and go on to the Q&A. The questions can be sent by the platform and will be responded after the presentation. I begin on slide number three of the presentation. This quarter, well, as previous quarters, began in a very challenging way and ended in a much better position. Our financial and operating indicators continued to be contracted with several stores closed, making our omnichannel operation incomplete.
Additionally, the experience of the stores that had opened were limited, and the mall operating hours had restrictions. Throughout the quarter, as more stores were reopened and all the omnichannel modalities were reactivated, we observed a rapid recovery in our operations. Our indicators evolved week after week. Beginning in October, we presented a positive EBITDA. In September, gross margin was 47.3%. In October, the company revenues grew 17% vis-à-vis 2019. We now go on to slide number four. We were able to maintain the growth of the digital channel in three digits. Store opening allowed us to offer an experience that was better with the reactivation. Our Net Promoter Score returned to pre-pandemic levels and shows that our clients perceive and value this type of service. Additionally, after a period of contraction of CapEx to preserve our cash, we continued to accelerate our investments.
We expanded our IT teams, and we continued our plan to expand the G5 stores and inaugurated a new G5 store on Avenida Paulista. With more than 2,000 sq m, this will be a space to integrate the community and foster sports. In November, we took an additional step in our transaction with Nike with the approval of CADE. The results that we will present go beyond our expectations during the pandemic, thanks to our team. I would now like to give the floor to Salazar.
Thank you, Pedro, and a good day to you. We can go on to slide number five. This quarter and the previous year, we had recurring events, both positive and negative. In the release, we present a table explaining these results. All of the explanations in the following slides refer to adjusted results because of these non-recurring events and excluding the IFRS effects.
We began the quarter with part of the stores closed. Our net revenues had a reduction of 22.4% for the nine months and 4% for the quarter. The store revenue had a drop of 41.9% in the nine months, explained by the stores that had been closed because of COVID at the beginning of the quarter, the limited experimentation of products in the stores open, and because of the limited working hours of the malls. When we analyzed the performance of same-store sales, the drop was 25.6% in the quarter. This value already represents a recovery of 26.2 percentage points vis-à-vis the second quarter. We continue to observe a recovery in brick-and-mortar stores, still with a reduction of working hours, reached same-store sales of 1.5% in October. The digital platform continued to grow, presenting an increase of 104.9% in net revenues for the quarter and 120% in GMV.
The growing share of our app and the reactivation of all of omnichannel modalities, thanks to the opening of brick-and-mortar stores, contributed to this growth. We go on to slide number six. We had gross profit of BRL 247.9 million in the quarter and BRL 577.8 for the nine months, a retraction of 19.2% and 31.9%, respectively. Gross margin reached 43.6% in the quarter and 44% for the nine months, explained by the increase of markdown necessary to regulate the age of our inventory and adjust our prices to market levels as we still had high inventories. Through the quarter, we recovered our gross margin, especially in the brick-and-mortar stores, with a recovery of 8.8 percentage points vis-à-vis a margin of 34.9% in the second quarter.
In the last two months, we have continued this movement to recompose our margin, allowing us to reach gross margin of 47.3% in September and 49.3% in October, close to the historical averages of the company. We go on to the next slide. Operating expenses. There was an increase of 7.9% for the quarter and a reduction of 0.3% for the nine months. Thanks to the activities to contain expenses carried out in the pandemic, there was a reversion, but we still observe a deleveraging in these stores because a reduction of fixed cost was lower than the drop of revenue. Variable expenses linked to the digital platform accompanied the growth of sales in the channel. In slide number eight, we speak about adjusted EBITDA of BRL 1.4 million for the quarter. Minus BRL 78.3 million for the nine months, a margin of 0.3% and - 6.0% respectively.
The drop vis-a-vis the previous year is explained by the impacts of the pandemic, but offset by the recovery we had at the end of the quarter. We go on to slide number nine to speak about net income. It was negative in BRL 15.2 million, vis-a-vis BRL 43.9 million positive last year. For the nine months, the results was negative, BRL 94 million, vis-a-vis BRL 87.2 million positive in 2019. At the bottom of the slide, we show you a detail of the reconciliation of our net income based on the EBITDA reported. We can now go on to slide number 10. Despite the negative EBITDA, we generated cash with the initiatives taken to improve the working capital during the pandemic. Operating cash flow for the quarter was positive in BRL 80.2 million and ended up with a cash generation of BRL 35.7 million.
The financing cash flow was positive in BRL 129 million, thanks to the initiatives to reinforce the cash for the pandemic and other transactions. We ended the quarter with a cash position of BRL 1.5 billion. Our CapEx for the quarter was BRL 44.5 million, an increase of 5% vis-a-vis the third quarter 2019. The increase of our investments can be explained by the recovery of the renovation projects for the G5 model stores and new hiring to reinforce our IT team and renovations in the headquarters of our group and the Grupo SBF. For the nine months of the year, we had an increase of 27.3% explained by investments in technology and the G5 works. Because of the renovations concluded at the end of the quarter, we took advantage of this time to conclude most of the renovations planned for the first quarter of 2020.
We would now like to open for questions that can be posted directly through the webcast platform. Thank you very much for your attendance in our call. We have a first question here from Alex Da Marca from Alpha Key. "Good day to all of you, I have two questions. Could you speak more about the expansion of the stores, how many stores you will open a year, how many renovations? Secondly, Pedro, if you could speak about the competitive environment and if your inventories are healthier." Thank you for the question. Alex, we do not give guidance on the number of stores we will inaugurate. What we can say is that we are feeling somewhat safer in terms of the market environment and the results that we have been obtaining in the last few months.
We have sped up our discussions for the opening and renovation of stores. We're working at full steam, which means that we are quite optimistic with the possibility of transforming and expanding square meters. We inaugurated the store on Avenida Paulista and renovated some stores that have significant impact. A smaller store became a much larger store in the Del Rey Shopping mall with a project in Rio Sul shopping mall. We're quite enthusiastic, and this project is already under renovation. We're optimistic with our outlook here. Regarding the competitive environment and inventory, our inventory, yes, is in better condition. We moved away from that atypical situation, that is why we had to sacrifice margin in previous quarters. We observed that month after month, there is a margin enhancement and that the inventory is returning to levels as healthy as the pre-pandemic ones.
We have the comfort at present that our inventory as a whole is in a very healthy condition. Regarding the competitive environment, the market is extremely competitive. It always has been. We are very competent and tough competitors. This increases evermore. It is up to us, of course, to work arduously to satisfy our customers and to deserve the sports business. I understand that this question is linked to prices. As the new collections begin to come in and the planning is in accordance with what is happening in sales, we see that our margins become more normal. In our case, this curve was closed in the third quarter and continues to do so. We expect that in the not very distant future, we will return to normal margins.
Thank you for the question, Alex. The next question is from Gabriel Simioni from Itaú BBA. "During the IPO process, you discussed several initiatives to discuss the improvement of the gap between brick-and-mortar stores and the digital channel. What are you going to do going forward?" Thank you for the question, Gabriel. Well, the main message here is that we look at things in a more hybrid, mixed fashion. We separate things to give greater clarity. The truth is that the consumer's journey is a fluid one between the brick-and-mortar and digital environments. When we present information, what we discuss is where the last click is or the last event where the transaction took place. For a transaction to happen in a store, there is a significant investment in digital that needs to be made.
For digital, the brick-and-mortar store is very important, as we see when we open stores in new cities. If we take this into account, our vision is an integrated one, and we're seeking the profitability of the company as a whole. Despite the fact that we have characteristics because of the mix, the competitive market, and gross margin among channels. In the last line item, what we observe is an integrated margin, and we are endeavoring to be efficient and effective. We're building what we know how to do day after day, while at the same time, we are ever more willing to invest to build something new. There's another question from Gabriel that I will read now.
"With the recent approval of the CADE of the operation with Nike, could you give us more color in terms of what you expect in terms of future days, and perhaps an update in terms of the amount of the acquisition?" Thank you for the question, Gabriel. What we are pending is to organize the closing. We're concluding our negotiations to communicate this to the market, and we will communicate all of the details when we have all of them at hand. The next step, of course, is to organize the closing of this transaction and the precedent operation that was missing, referred to cash, the CADE approval, and this occurred in November. As soon as we have more details, we will, of course, disclose them. Thank you for the question.
We have a question from Felipe from HSBC about the negotiation with Nike. We do have a schedule for the integration of operations. Most of this has already been mapped out. We worked throughout this year. As the approval process took longer than had been anticipated, we had a great deal of time to get organized in terms of the operation integration. We worked with an in-house team that worked very hard to think about every detail from the viewpoint of guaranteeing that things will operate and also in terms of capturing value. Although we understand that all integrations pose challenges, we're quite comfortable that we have an excellent plan. Companies continue their separate routes. Nike Centauro and the eventual business units that we will have, will have to operate in an independent fashion. This reduces the integration efforts.
Integration is a back-office element to guarantee that the supply chain and technology will operate in an integrated way. Perhaps the greatest value chain here, and what we have to be very attentive to, and where we're betting our chips on, is the ability to develop the channel. The nike.com channel, taking advantage of the operational infrastructure of Centauro. We're deploying quite a bit of efforts to guarantee that this digital operation will develop and take advantage of the synergy of both companies. This is a very important point for both of us. I would like to read the following question from Pedro Hokama Turim. "Are M&As still in the radar?" Thank you for the question, Pedro. Yes, we do analyze all of the market opportunities as we understand that we want to build a sports store, and we're going to speak about this ever more.
The construction of this ecosystem involves efforts of attacking different parts of this and includes innovation. We deem that we will do this in the most relevant and interesting way possible for the company. This could be through innovation, and of course, we will assess inorganic movements if they make sense. The great inorganic movement at present is that of Nike, and that is what we are focused on. Thank you for your question.
Well, this is Salazar speaking. We have a question from L. Eric. Good day to all. If you could speak about the advance of the RFID project. Thank you for the question, Eric. Well, the RFID project that we contracted has three stages. The setup of an inventory, a search tool in the store, and the third stage is the reception at store.
The stage one of counting inventory has already been implemented in all of the Centauro stores. We have rolled out this to all of the stores, and it is part of the company. We're presently working with the rollout of the stage two, which is that search engine in the store. We believe that this will be concluded until year-end, and we will enter the phase three, that is reception. When the truck arrives, we will do the reception with the RFID. We believe that until the first quarter, this entire phase will have been rolled out. With these three tools, the count up of inventory, the search of merchandise in stores, and the part of reception will have been concluded, and we will begin to measure our results in a more structured fashion. All of the stores will be operating full during the RFID phase.
In the first quarter of 2021, the RFID and the three stages of the project will be fully operational in all of the Centauro stores.
To continue on here, we have a question from Lucas Ribeiro from Saga. "Good morning. I have two questions. Will there be a return of brick-and-mortar stores after the opening of October? Will this impact the perception of the company in terms of opening new stores in the future?" All of our stores have been open since September. Between March and August, almost all of the stores were closed down. Since September, they have been reopened, but some are undergoing renovation, and we have other one-time events. We see that the reaction is beginning with relevant growth. We do have a characteristic when the stores close down.
Well, this truly hampered us, but now that the stores have reopened, this helps us with the integration between channels. We don't think in a segregated fashion between e-commerce and brick-and-mortar stores. We think about them jointly. Our open stores are a thrust to e-commerce, and when e-commerce works, it gives thrust to our brick-and-mortar stores, and click and collect and ship from store begin to operate in a greater scale. This, of course, is a driver for e-commerce and for service levels. We have once again presented an NPS according to the pre-pandemic pace, but this was not the case in the months of crisis. We continue to see very positive figures at the end of the quarter when it comes to e-commerce. Regarding our perception of store penetration and expansion, we're confident that the road for the company is an expansion of both channels.
We continue to be confident. We continue working towards renovating and open new stores. We believe that, well, shopping malls in Brazil is a destination for entertainment and for experience in general, and our mall partners do excellent job to create an atmosphere that is like this. Once again, we do believe that this will be a very relevant destination for the people that tend to go to shopping malls and, of course, for Centauro. Having said this, we opened a street store on Avenida Paulista, which is an icon, and we have created a center for the experience of sports, highly aligned with what we want to build to be the destination for sports and the place that connects people at another level of depth when it comes to sports.
Of course, we will probably make more investments on street stores, not because we are concerned with shopping malls, but because this is an additional opportunity. Thank you for the question, Lucas. The next question from Marcelo. "Are there more stores under analysis for closing? What can you say about the integration of assets?" Marcelo, we carry out a portfolio analysis with a certain frequency, attempting to see the performance of stores and how to project this. Quite frankly, the level of traction to close stores is extremely low and rare. Evidently, of course, there are some stores that do not seem to have an outlook, and in that case, we end up closing them. There is no significant volume at present. Nike, I think I responded to this previously. We're working on the integration.
Once we have the details of the timeline, we will be sharing this with the market. There is a question from Damad, I'm sorry. "If you could speak about the global supply chain, and what is happening with the issue of the foreign exchange rate in terms of your inventories?" Thank you for the question. I think it's good that we had a global disorganization. There was the close down of plants, a mismatch between demand and production. On the other hand, we cannot deny that the depression of demand and sales that we had in previous quarters resolved part of the problem, and that we have highly structured and organized partners on the other side. Our assets, Centauro, works with considerably large partners, with global brands and national brands, all highly structured in terms of their reaction.
When we look at this in a broader fashion, my understanding is that these groups are better organized to react to this imbalance and to have a rapid reaction. The answer, therefore, is yes, there was this disorganization, but we're getting back to balance, and we see the figures of growth. In some specific points, of course, this will result in a certain scarcity or surplus. Now, the issue of inventories. Brands have part of the production that is imported, and they work towards nationalizing part of this production, and we do have a significant number of domestic brands. This is not the first time that Centauro is faced with a foreign exchange shock. Brazil has faced this often, and of course, this impacts the financial indicators of the company. The brands, of course, are assessing a price increase. Evidently, they need to raise their prices.
We have faced this situation oftentimes in Centauro without a relevant impact on the company results. We see the company reacting, there's nothing that is of concern. We go on to the next question. We're just simply organizing the questions that we have received. We received a significant number of questions. A question of Tiago. "Good morning. If you could speak about the sales performance in March per segment and much more." Thank you for the question, Tiago. What we have still observed is soccer with greater difficulties. Soccer is being played again, of course, at least on television. These are sports where we have less participation, less people playing soccer to maintain distance because of the pandemic. This is one of the segments that is suffering the most, and the others are doing very well.
The only segment still suffering is that of soccer, and we consider this because less people are playing soccer as a sport at present. The other sports are performing in a good way, and casual wear is doing very well. People are wearing more casual wear, and running and other modalities are coming back to have a good growth pace. I think the only point of attention is that of soccer, and we're going to have to bear that for some more time. The next question from Mariana from ZQuest: "Which is the company's expectation in terms of Black Friday? Will you grow in accordance to the market or more?" Thank you for the question. I can't give you an answer without giving you some guidance. We're prepared. We got prepared. We have worked arduously for the Black Friday.
We begin with investments in infrastructure. We have made heavy investments in technology this year, the buildup of a team, in the infrastructure and to have a more productive technology. We have interesting work taking place here that will reflect our capacity of having a good Black Friday. The e-commerce people are also working very hard. We're ready and quite optimistic in terms of this event and with a positive expectation. I can't give you a figure here. Our mission has always been, as a company, to grow more in the market, grow more than the market. We have a great deal of opportunities in the sports market. We're well-positioned to have a growth that overcomes the market. This is the ambition, of course. We have to put our heads down, begin to work. It's very important to work with the retail market.
This is my eighth Black Friday at Centauro and Christmas. For those who like the retail market, this is the best time. We're enthusiastic and prepared for this event. Thiago Bortoluci from Goldman Sachs. "Good morning. In the release, you said that you were resuming investments in stores. Will the pandemic reduce your average CapEx per store?" Thank you for the question, Thiago. I think that for 2021, what we can expect is that if we resume the pace we wanted to have since we did the IPO, we will have openings and renovations. We're speeding up our projects here to be able to open stores and renovate them, because this is an excellent investment of supreme importance to build our strategy, including the digital strategy. I don't see any direct relationship between the pandemic and the CapEx cost for stores.
I think there's a mixed movement, to be very honest. An increase in cost because of the cost of raw material, the dollar rate, and our team works very hard to offset this with projects. We have renovation projects that we have been assessing for some time. We have a light version from the viewpoint of construction material of the G5 model that will enable us to do renovations in stores with a lower sales potential. We were working on that, and very soon we will see the capacity that we have of creating lighter renovation projects for stores with lower sales. A question from Vagner from Quantitas. "Can you speak about which was the recurrence of consumers online, and are you back to your curves in the past?" Thank you for the question, Vagner.
The truth is that for the time being, this is not the case, and there are some factors when it comes to a drop in the purchase of some apparel. We had an overload in our service center. I carried out the wrong measurement of the team. We did not expect the digital to grow so much at that point in time. What was lacking, perhaps, was our ability to respond. Our service levels did not drop in a relevant way. What had a drop was our ability to help customers who face problems. We didn't have more customers with problems, but those that did have problems received a service level that is below what we would like to have and what they deserve, below the NPS. This has been redressed.
We made significant investments in all of our channels to be able to bring back the operation to a normal level. We observe a significant acquisition of customers after this, and recently, both in stores as well as on our site. We have expanded our capacity to identify customers in the store, identify those who do buy, those who do not. On the site, the best way to present a fact here is that we have 3 million active users in our app, and this is a magnitude that is much greater than that of 2019. We're optimistic, this is the argument that we use to speak again about Black Friday. This is the edge that we will have to have a Black Friday that will be better vis-à-vis 2019. We have a broader customer base on our app, customers that we know more thoroughly.
Thank you for the question, Vagner. Next question from Alex. "What should we think about the marketplace and what is Centauro doing with the cross-sellers?" Thank you for the question. When we think about the Centauro business, Centauro should be the sports destination. As that, this is a niche, and we have to do excellent work in that niche and to fulfill the needs of all of our customers in sports. Marketplace is a relevant strategy. First of all, we think of what the customer needs. We come up with an assortment for those who play soccer, those who walk, those who run, for all the different sports. By building up this assortment, we want to have everything. What is expensive, what is cheap, novelties. We work with a curatorship in the way of presenting this, and marketplace plays a fundamental role.
We can't invest in everything, and marketplace has been growing a great deal. It represents 20% of the gross merchandise volume of the digital at present. I'm sorry, the figure is 15% GMV of the digital. We do have the perception that our added value here for marketplace as it is a niche, and to compete with a marketplace, we have a much greater flow, a much greater audience, and we can truly put our customers in the context of sports, and we can stand out in that environment. We hope that a manufacturer of a specific sport will feel better represented at Centauro, that he is in a place that has everything side to side with non-related categories.
We have thought of developing new strategies for delivery, and this, it goes through Centauro with a significant percentage of the sales of marketplace using our contracts, deliveries through our trucks, and we're also thinking about how to use our stores to highlight these sellers. We have one more question here from Andre from MFS referring to the tax incentives. "Is there any idea if these tax incentives will be renewed?" The truth, Andre, is that this year has been somewhat confusing for everybody, for the public sector and the private sector because of the pandemic. We did not speak to the government of the state of Minas to debate this issue. Their agenda was somewhat different at this point in time, and the incentive, as is regulated, will extend until December of 2022.
We continue with our thesis that the state of Minas does require these tax incentives because there has been no tax reform, and that the year 2021 will be the year to begin discussing this issue with them. Thank you. We continue here with the questions. A question from Felipe from HSBC. "How is the performance online, and can you speak about the Centauro marketplace and speak about the main KPIs?" Thank you for the question, Felipe. We have had a very good evolution in this partnership. We have a partnership that is divided in two parts. A hybrid site, which is a Centauro site inside of Americanas with some premium brands. Well, this one has a lower flow and a partnership of some products and brands that are part of the catalog, and this is doing very well.
It represented a significant growth of volume, but most of the volume comes from our digital channel. Our sales through the digital by far sell centauro.com.br. We do understand that this partnership is good, is a complementary thing for us, and we're betting on this marketplace model for some categories. We think it could be a relevant model for increasing our volumes. We still have a set of questions here. They're all somewhat different, and the idea is to respond to these questions by email if we have not done so far. Thank you very much for the questions. It truly is excellent to have a call with such good questions. Thank you to all of those who posed questions here.
At this moment, we're going to end the question and answer session, reinforcing that if any question has not been answered, we will of course, respond to that question through the IR team. The team is at your disposal to also clarify any issues which may arise. In the last stages of this year, our focus is to continue working arduously to offer the best experience during the coming events, Black Friday and Christmas. In closing, thanks to the full dedication of our team, we ended the third quarter with a Centauro operation strengthened. We go back to profitability with a Nike transaction about to be concluded with a strong cash generation in these two highly challenging quarters, and with a solid cash position ready for the additional steps to build our sports ecosystem as the SBF Group.
Beginning in the next earnings result call, I will introduce myself as the CEO of this group, and as soon as we conclude the Nike transaction, as CEO of Nike Brazil. We're beginning a new stage, and we're extremely enthusiastic with the potential that we have