Good morning, everyone, and welcome to Centauro's webcast. Today, we will discuss the Company's Earnings Results for the Second Quarter of 2020. This is Pedro Zemel. Today, I'm here with José Salazar, our CFO and IRO, and Daniel Regensteiner, our Treasury Investor Relations Director. Let's start on slide number two. This was the most challenging quarter for our company. The result was not good, but thanks to the efforts of our team, we adapted quickly to this new scenario, and we succeeded in mitigating the impact of the pandemic in our businesses. Our presentation has three parts. First, we're going to give you an update on the impact of the crisis and what has been done to face it, then the results from the second quarter, and finally, the Q&A session. You can send your questions to this webcast platform, and the questions will be answered after the presentation.
Let me start on slide number three. Over the last year, approximately 80% of our revenues came from our brick-and-mortar stores. This year, actually this quarter, we started with all of our 211 stores closed. That had an impact on our results, particularly considering expenses with stores, personnel, and occupancy, which are mainly fixed. Stores closed also had an impact on our digital channel because we were not able to benefit from omni-channel sales. Based on that, we had to react, and in order to optimize the mitigation of this crisis in our business. We also adapted working conditions for our employees in order to preserve the health of all of them, focused on fixed expenses, and reinforce our liquidity. We did that substantially by these many initiatives focused on personnel and occupation.
Unfortunately, we did not enough in order to absorb this decline almost to 90% in our revenues from brick-and-mortar stores. We took new measures anticipating receivables, new lines of credit, payment terms, and the receiving of products. Fortunately, our digital operation was already relevant, accounting for 20% of sales. After our first reactions to COVID-19 crisis, we strove in order to strengthen it. By implementing initiatives such as shadow stores and drive-thru, we were able to reactivate our omni-channel operations even with stores closed. Besides omni, we also increased our share in the use of the app, which accounts for more than 50%, and it's very important for customer loyalty and with profitability above other channels, focusing on marketplace, and that grew more than 300% in this quarter. Everything contributed for the digital revenue, more than double this quarter.
Also complying with the decisions made by the local and state authorities, we reopened our brick-and-mortar stores, taking all the necessary sanitary precautions with unlimited opening hours and decreased the flow. As months went by, we gradually opened more months and regaining sales, recovering lost sales. From 15 stores open in April with a drop by 67% in sales to 172 stores open in July with a 41% drop in sales. To date, we have 192 stores open with a drop of 23% in our revenues. Let's move to slide four. It's very important to highlight the fact that the growth in digital was not enough to offset the drop in our brick-and-mortar stores, and also the high inventory levels led us to work with lower margins, much lower than normal. Now, I'd like to turn it to Salazar, who's going to focus on the financial results.
Thank you, Pedro, and good morning, everyone. Let's move to slide number five. In this quarter, as well as in the comparative period, we also had non-recurring effects, both positive and negative. All the explanations that will be given refer to the adjusted results to these non-recurring effects and also IFRS strategy. Our consolidated net revenue decreased 56% in the second quarter and 30% in the first quarter, with the impact of stores closing, as mentioned by Pedro. Revenues of our stores declined 89% in this quarter and 48% in this first half. The performance considering only stores open SSS was 52% in the quarter and 3.6% in the first half. As Pedro mentioned, we also had an increase of our digital revenues of 85% in the first quarter and 50% in the first half.
As for GMV, it grew 105% in the first quarter, 62% in the first half. Our gross revenue, BRL 83.5 million in the first quarter and BRL 329.9 in the first half, a decline of 69.9% and 39.1% respectively. Gross margin was 34.9% in the quarter and 34.3% in the first half. High inventory levels also led the market to implement promotions, consequently becoming more fierce. We also had to adequate our prices, increasing markdown, decreasing our gross margin. Markdown also led us to regulate the age of our inventory that was old. Our consumers also bought more bicycles and some other devices with lower margin. Now let's talk about operating expenses. There was a decrease of 20.6% in the quarter and 4.6% in the first half, which is explained by our strong focus on containing expenses during this pandemic, and that led to a decrease in our fixed costs of approximately 40%.
It's also important to highlight the fact that our fixed costs are mainly related to our brick-and-mortar stores, but we also have relevant operating deleverage. As for our digital channel, we have some variable expenses that increased according to its growth. We had a [fourth increase] in our revenue in this quarter, but our expenses also increased and had a negative impact on our EBITDA. Here we have adjusted EBITDA of BRL 84.9 million in the quarter and -BRL 79.7 million in the first half, with a margin of -35.5% and -10.7%. As explained earlier, that is explained by the increased markdown that had impact on our gross margin and operating deleverage. Let's move to our net income. Our net income in the quarter was negative compared to the results in the first half, BRL 78 vis-a-vis BRL 43.3+ in the second half of 2019.
At the bottom, we can see the reconciliation of our net income for this quarter and the reported EBITDA. Slide number 10. All the measures implemented to preserve cash allowed us to generate despite negative EBITDA. Operating cash flow for the quarter was +BRL 71.7 million, and cash flow regarding CapEx was negative by 21%, resulting in cash generation of BRL 50.7 million. In order to strengthen our cash position and prepare us for the ending transactions with Nike, we conducted the follow-on, and we ended the quarter with a cash position of approximately BRL 1.3 billion.
Let's answer the questions that were sent to our webcast platform. We kindly ask you to give us just one second in order to update the questions. I apologize. We are downloading the questions. Let me go over the first question from Mateus Moda from [audio distortion].
Can you please add some color on the performance of digital channels in July and August? How was it different from brick-and-mortar stores? Thank you very much for your question, Mateus. Our digital channel has been maintaining performance and growth compared to previous months to what we saw at the end of the first quarter. We succeeded in adjusting operations and also with our shadow stores now properly working. We also reduced our gross margins. Thanks to our efforts with our app. Although stores are now reopening and also sales increasing week after week, the digital platform has been keeping the same pace. We did not see any changes. There was no decline. We have many questions. Let me read the next one. It comes from Irma from Goldman Sachs. Good morning. Two questions.
First, how do you see the normalization of inventory and how you are receiving new products, and how is the dialogue with the shopping malls? Thank you, Irma, for your questions. With regard to your first question, there is a disorganization in the flow that is usually right and square. We resumed receiving products, and also we are distributing products to our stores. What we see is that the industry is reorganizing, is readapting right now because we had to adjust our margins when brick-and-mortar stores closed. Probably that will imply in reducing imports, and they will probably be concentrated for the holidays. It's just as if we skipped one order or one entry. That will also lead to a shock in offer. Also considering that plants were closed in Asia and in other parts of the world.
I believe that right now we do not see any red flags. We are receiving products and we are succeeding in distributing it. There was a decline in offer, but we also had a decrease in the number of purchases. Second question, what about the dialogue with the shopping malls? This dialogue is being conducted case per case. When stores were closed, the malls were our partners and they really supported us. In also seeking for a solution for an issue that was not produced by any stakeholder. Now we are going month by month. What we find is that we have different realities at different shopping malls, different managing organizations, but we are working as partners, not as long-term partners, but also with the outlook of growth. I think that allows us to certainly negotiate.
I would not mention anything like the average or the typical. The conversation is being done case per case. What I see is that we have a consistent negotiation pattern. Well, we have many questions about margins. Tiago Matera, Eric Huang.
Well, Pedro has already answered part of that. I think the question is how we are going to manage margins from now on. As mentioned earlier, the market is right now highly disorganized with high inventory levels. We really need to cut down on our margins in order to reach a reasonable level of inventory. We believe that margin recomposition will take place in the next months, and it will be probably at a normal level at the end of the year when we have Christmas and Black Friday.
We believe that starting next year that we will have reached a balance, but obviously this is going to take place very gradually. We believe that this recomposition will take place along the second half so that we reach proper levels at the beginning of next year.
Well, if you allow me, please let me add. I believe as Salazar already mentioned some of the facts, but I like to highlight the fact that we have a more fierce market. We have high inventory levels. The company was growing 20% year-over-year, and we had inventory levels to meet that demand. With the stores closing, we also had to work in order to avoid inventory aging. There is also the mix issue. Regarding pieces of equipment and some other products with a lower margin but had increased sales.
What we see is a gradual recovery with margins improving little by little. Just as José mentioned, with the arrival of new collections, we expect things to reach normal levels. In answering the question about the changes in our mix. We had 2% was related to bicycles and equipment, and in the last quarter, we saw a change of that from 2% to almost 10%. That certainly has an impact. As things go back to normal levels, we do not believe that this will going to stay at a 10% level. We believe that it will be better than the previous 2%, but we do not know exactly where it will stand, but somewhere between 2% and 10%. I think it's important to also add about the mix of channels.
Obviously the gross margin of digital channel is lower, but now we have a higher share coming from digital. The market is really experiencing a dramatic period right now, and we are all working, and we know that things will get back to normal. We just don't know when. It will go back to normal levels. Well, our next question, Lucas Ceron from Safra. Well, good morning. How do you see the renovation of stores and its schedule? Also considering the crisis and how some other stores will close. Do you see a means to actually increase your presence in some other shopping malls? Okay. Renovations, remodeling. We were already doing that, and now we have reopened some iconic stores, such as the one in Recife. Once our cash was more stable, we also took advantage of remodeling some stores.
As for reopening, I believe that once again, we are optimistic for the midterm, but in the short term, there are two factors that reach a balance. We are less certain about our revenues, about our sales, particularly when you talk about less consolidated shopping malls. We are being highly conservative in our revenue's prospects. We know that on the other hand, there is room for opening new stores. We know that some retailers from different industries are permanently closing their stores. We see that, and for this year, we don't have any target regarding a next number of stores. No, we want to open good stores. We know that there will be some exceptions, some excellent opportunities, but we may like some other opportunities for the future.
We have also a new store being remodeled on Paulista Avenue, I hope we have some news in our next meeting. That will be another iconic store. Question from Alex Tanaka from AlphaKey. Good morning, Pedro. Can you please give us a feedback about the follow-on with Nike? Thank you, Alex. We are now waiting for CADE's position. There is nothing new. We are now waiting for CADE's. As soon as we have something new, we will certainly share with the entire market. Thank you for your question. We have two questions from Itaú, one from Helena, one from Thiago. Let me start with Helena's question. The pandemic led the consumers to digital, and also the marketplace also benefited from the platform. Did you see any changes regarding costs of what consumers bought? Also, there was any change regarding platform's performance.
Have you been discussing that about marketplace? It's reasonable to think that the scenario favors marketplace and also specialized products. That was also Marcos' question. We have also a long-term strategy, and there is something in this question regarding a short-term and tactical action. When we think about long-term strategy, well, the marketplace is very different. We have, for example, a platform player such as a store in which you sell about everything and trying to become like a convenience platform delivering and also transactional. Selling about everything, anything people want or need. In Brazil, we have highly qualified players in this segment. There is another one, is playing as an ecosystem, aggregating a certain niche, which means that for consumers, that will mean more than the transaction itself.
This is also available in other parts of the world, and this is the path I see Brazil following. We are trying to build a closer relationship and also in trying to better understand our consumer. I'd say that these are different scenarios. Obviously, there are advantages and disadvantages in both of them. When you think about categories, obviously there is a benefit for platforms. Also, you have consumers coming back to a more open platform. What we want to offset is by increasing our contact points with sports consumers. We have Centauro, and I think that this is very clear when we also embrace Nike. Also, in trying to enhance our relationship with consumers, increasing number of contacts, and also to take this relationship to another level.
I think that these are two very different things, but there is certainly room for us. With regard to the current scenario, two things. First, we really worked hard in order to increase sales through the app. In the short term, this growth has a high CAC, but the hypothesis is that the CLV is higher, and we considered the CAC of a consumer just as if they were buying just once. What we want is to have the consumer coming back, and the CAC of the app tends to be lower in the second or third purchase, because you can also send some links to consumers. We are very confident about our platform and our strategy. With regard to our partnerships, well, two things. We have the premium brands, which is something hybrid, and also, we respect the brands and how consumers see the brands.
For a sports brand, we know that building a brand is something key, and that's why the way they relate to these specialized players is different from more general players. I would not put them in the same box. You cannot buy, for example, a blender and running shoes, because the brand believes that they need really to enhance their brand. We understand that. We also have our own label and some other brands that can enhance their presence. I'd say the GMV is still low in B2W when you consider what we have. The growth we see when you think about Brazilian reals, we are considering our own platform. Well, I hope I have answered your question. We have two more questions. Let me just add to the question about the online environment and also our main competitors.
Also, Philippe Perdigão from Mar Asset, he asked, can we provide more information about the app. We saw a relevant increase in its use. How do you see that from consumer standpoint and CAC? Also, about the marketplace and how that can actually change digital sales channels. Well, first of all, I'd like just to say that for a long time, we had a theory that few apps would be present in consumers' mobiles, and that some would be used less often, and that an app such as ours would not really have its place. We invested in our website and desktop and mobile also, and less in the app. In the past, that was how we worked in the past. Our app actually has a very good performance.
What we see is that now more consumers have mobile phones, and people do keep many apps as we once thought. Once the performance of the app improved, we really started to invest more in it. In July, 54% of our sales came from the app, so 30 points compared to last year, BRL 3.6 million. 337% increase and 1.6 million downloads, 43% more. What we see is that this channel is important. We also know that this consumer will come back. With regard to competition, online competition. First of all, obviously, this crisis had a higher impact on brick-and-mortar stores compared to online sales. The more concentrated digital, the better. We also have some competitors that present a higher presence, and obviously they benefited more during this crisis. I'd say that we have approximately a potential of 90% to enter this market.
I'd say that this will really be a leap. Thank you for your questions, Marcelo and Philippe. Well, we are going to close this Q&A session. Our investor relations teams will be available to answer further questions. Thank you all for participating in our earnings webcast. Sports is part of Brazil. We were always convinced about that, but the pandemic made it even clearer. Even considering this first half of the year in the pandemic, people kept exercising. They have changed their habits, the sports practice, but the willingness to exercise continued. Thanks to our omni-channel, we also continue meeting this demand. We are very proud of our team that despite this delicate time in their lives, worked hard in order to make us more efficient.
We are very proud of the support Centauro and the team gave to Transformer Projects , our initiatives to NGOs that changed the world through the sport. Financial results of this quarter was not good, and it could not be considering the closing of physical stores. Despite this challenging scenario, we were able to limit our losses, generating cash in our operation and in the company, and doubling our revenues in our digital channel, which was already relevant. We know that there will be more short-term challenges, but we are very excited about the future. We will recover, regain little by little the revenues from our stores, and let's work hard in order to continue building sports ecosystem in Brazil. Thank you very much for your participation and interest in Grupo SBF. Have a great day and see you next time.