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For the other participants, we orient that the questions please send through the Q&A icon on the lower button of your screen. If your question is not answered during the video conference, the Investor Relations team will enter into contact with you afterwards to answer any questions. Representing Vivara we have Thiago Borges, CEO, Elias Leal, Cassiano Lemos, COO, and Caio Barbuto. Now we will collect your questions. Remembering that to make a question, all you have to do is send your request through the Q&A icon on the platform in the bottom of your screen. Please wait while we collect the first questions. Thank you. Our first question is from Luiz Felipe Guanais from BTG Pactual. We now open your audio, so you can make your question. Please go ahead.
Good morning, everyone. I think two questions from my side. The first is in relation to the balance between the Life and the pricing about the demand. We saw a slightly bigger need in this quarter. How do you see this in terms of pricing in Life looking forward with the categories and the higher price category? The second question is how do you see the dynamic of SG&A of the company compared to what we saw in the first quarter? I mean, is there a initiative to accelerate certain investments since the end of last year? Wanted to understand how we can expect this dynamic during this quarter going forward. Thank you.
This is Thiago speaking. I'm gonna start with the first part of your question, then Elias can finish your second part, answer your second question. As far as the matter of balance between the pricing between demand in the category, in the Life category, we have already done the adjustments in price, and the necessary price adjustments. I think that this is a decision that we have already taken. I think it's worth mentioning that the elasticity that we've seen how it behaves between the two categories, it's not just in this price adjustment that we've done. We've had a positive impact on the commercial categories with an increase in prices, in the volume, in the adequate volumes.
As we mentioned in the Moments category, this price has happened in the 2nd half of last year, the 2nd quarter of last year. Just remembering the strategy that we used in the past, in the fourth quarter of 2024, we reduced greatly the category of Moments to be able to do for Christmas launches at that time. We had certain items with lower prices in the first quarter of 2025. This category represents 30% of the revenue. Of the subcategory Moments, it represents 30% of the Life brand, but it has half the volume because there are several different guys with several items that have prices below average in the category. When we look at this fallen volume in the Life category, that for us does not scare us.
In fact, it was expected and connected with the reduction of these subsidies. The factory in the past produced a volume, a very large volume at the beginning of last year and in the end of 2024, and it generated this higher subsidy, which in this quarter we have equalized the production to in the factory. However, when you exclude the Moments category, you see that the other categories that respond for a good part of our sales, in Moments there's only 30%, the rest is 70% represents growth in volume, of 17% in volume, while it has shown a average ticket, a stable ticket, so average ticket price. The pricing, the repricing that was done, and to speak a little bit about the question of average ticket.
We have worked a lot in the average tickets in the lower level, in the Tier 1 level, which is very important since it's a category very used for presence. It's also a main focus of ours. We look at the velocity of same-store sales for Life. One of the questions to accelerate these same-store sales would be to work in these categories, in these lower entry-level price range. We're looking at Life is to work on the introduction of new collections, which we have been doing. We believe that we're gonna open our portfolio of products in Life at a level that we're working here with a cycle of launches and production. These that these things will happen over time with Silver in the second half of the year and closer to more heavily in the fourth quarter.
However, this fall off in volume was expected and is connected with the strategy that we've been using since last year. In the second quarter of last year, this increase in the Life category, this diminishing has already started. I'm gonna pass it over to Elias now to comment. I think it's worth it, is in the previous call, the major focus of the conversations was in gross margins, and we had a level of visibility of the business. I think it's very important for us to those who accompany our business see the dynamic, however, quarter by quarter in a retail company like ours, BRL 2 or 3, 4 million of this quarter can just be a number. When you put it in the next year, it's something else.
When you put it on the lines of other expenses, a question of provisioning, of labor cases, labor lawsuits. We also are no longer plan to adjust eventual operations and collections working with the numbers by explaining this. And recurring basis, when you remove only the effect of these subsidies, the EBIT that the company has grown, and we've maintained this margin even with this space of comparison of expenses a little bit stronger this year compared to last year. In May, we came in on strongly with a great deal of tranquility, the level of SG&A of the company always rising in a healthy way. When we look at the line of freight, there are two actions which we believe bring a good return to the company.
Which the 1st of which is the DC in Espírito Santo, which is, we're gonna have this base for comparison in the 3rd quarter, but it brought approximately BRL 12 million in benefits, in subsidies, benefit subsidies in the 1st quarter. The other stores that will be more priced in in the 2nd half of the year, of last year, and we'll have a base that's a little different in comparison to previous numbers. The products that we transferred and the capacity of turnover they have in the new stores is one of the motives that we have to explain why our stock in this first quarter compared to the fourth quarter of last year is in the lowest in the series since the IPO.
Reduced 77 days compared to the first quarter of last year. We look at the growth in the quarter-over-quarter, it's the lowest, it's the lowest growth since the IPO. This also, with this comparison between stores, which happened last year, has been very successful, but on a bare basis of comparison of freight for this pressure in the first team. When we advise these numbers, we don't advise these numbers compared to this revenue. Okay, here's Elias.
We see a 3.8% of gross revenue, and our expenses are growing by approximately 20%. Almost all of the growth in this line, the percentage of revenue, comes from the line of freight and marketing. We are going to talk a little bit about freight going forward, but I wanted to bring a little bit of color about what we see in the line of marketing. When we see our historic series of marketing in this semester, it represented 3.87% of gross revenue, and this percentage is only higher than the same quarter of last year. Since 2021, comparing the first quarters, we see that our marketing line has been every year has been high except for in 2025.
We saw in 2025, we made several cuts and reduced our investments in marketing, principally in the offline medium. Over 2025, since 2024 and during all of 2025, we have been increasing this percentage in a way that the percentage of marketing expenses, expense of revenue is now 3.3% of gross revenue versus 3% of gross revenue in 2024, which are levels that are much lower than what we saw in recent years in 2021, 2022, and 2023. When you see this, what do we expect for this year? This percentage that I mentioned, which is 3.7%, is completely within the trajectory in which we don't see big increases in marketing expenses like we had last year.
The marketing expense tends to grow when we look at online media as well as offline media a little bit above the gross revenue of the company, especially because the revenue that we've had has grown more than the company's revenue. We continue to invest in performance media, in branding media. We continue to have these excellent results that we've been able to have in the digital world. Even growing at this rate, we're still able to compare the ROAS that we had last year. We're going better. On the other lines, the line of rent, personnel, other sales expenses have all grown in line with gross revenue and includes, in fact, the personnel line since the 2nd semester of last year.
We have new stores coming online into our base, which bring an additional expenses, higher expenses for personnel as they go maturing, and this tends to come back closer to the average as they reach the two or three years of maturity. I think the initial page, as Cassiano mentioned, how we see the freight line.
Guanais, Hi. This is Cassiano. I'm gonna make a detail about the freight cost, as Thiago mentioned. The freight is due to three factors, several temporary factors. One, the re-managing of products between stores in line with our program of optimization of stocks, we have the co-location as part of that. This is an effect which will have an effect on costs as we have a new model of distribution between stores with costs significantly lower than the direct transfer between stores. The other factor was the attendance of the e-commerce leaving directly from the stores to the house of the clients. This went above 50% of the e-commerce orders in this 1st quarter. This level should go up slightly with the rest of the year with more people, with more products in the DC and more express delivery.
This distribution model for the network and with the utilization of the new DC in Espírito Santo with a large part of our stores. This was inaugurated in July of last year. As part of our design for our basis for comparison of this new network will be the 2nd half of this year. The levels of freight compared to revenue, net revenue in the 2nd half of last year are good reference points for our operation. In the 2nd semester is the expectation that the expenses will grow less than the sales rhythm, with operational growth and with the growth of the net revenue.
Very clear. Thank you very much.
Thank you, Guanais. The next question is from Danni Eiger from XP. Go ahead.
Hi. Thank you for taking my question. I have two from my side. The first is in relation to the competitive dynamic. We've seen some players doing movements in the against these questions. In the case of silver at the beginning of the year, we also saw Monte Carlo making some adjustments, not passing through the increase of gold in the gold products. I wanted to say, how is your vision of this? How do you see eventual impacts for you of these movements, both in gold as well as in silver? It's a vision of more of a competitive environment, we can look a little bit more with gold regarding gold. I'll do ask Cassiano about the working capital, if you have any other effects of seasonality.
We also see clearly the beginning of this movement of improvements, but we're not seeing clearly the improvement of the working capital, of the turnover. We see the same-store sales. We have activities to accelerate that. How is this movement of optimization of stock in the Life stores? If you're having any positive signs of improving turnover in the stores, it would be very interesting to understand how is this rollout going.
Hi, Danni. This is Thiago. Thank you for your questions. I'll try and answer them here. Far as the competitive scenario, we're starting with ouro, with gold. We perceive that the pieces have a higher added value, the level of elasticity for the company here is more positive. These are categories in which we increase prices and volume continues to grow. We've done market research every week to evaluate the position of our competition in these areas. When we look at that, we see very few pieces, very few categories in which we do not have. Of course, we have to put it into the numbers that we are a player. We are the top-of-mind player, so we have our price associated with the credibility and the confidence and experience.
A positioning within the shopping center and a national coverage in e-commerce, which gives us a differential in prices. When you look and compare what the competitors have done, our price of gold is still very attractive. The movements that we've done, the impacts above these categories are very positive. I think within the gold, category of gold, we have seen, we've been presenting gold and silver within Vivara, which is evolving very well. This category together with the category of silver in Vivara has doubled in participation in the first quarter of this year compared to the first quarter of last year. In spite of all the commercial activity that these pieces combine volume, elegance and status with a price that is very attractive and a store experience which is superior.
I think in the question of gold, it's a very interesting dynamic that we've seen. As far as silver, I think that the movement that competitors have done was to get to prices the same as or close to ours. It's extreme that is, they somehow have prices that are out of the market, they arrive to more closer to our prices. Running their stores, we see the traffic in our stores, our Life stores especially, we have a mix of an assortment in the Life stores which is extremely superior to the competitors in terms of the coverage and offerings and the depth of each category that we offer. We also offer other categories as well. We run, we walk, we visit other stores, and we see that these other stores have 3 or 4 times.
Anecdotally, more clients in the same schedule, the same time period as we do. We have 3 or 4 times as many clients as they do. In practice, we look at other categories beyond the direct competitors. Since the scenario of retail in recent years was very inflationary and certain categories have already passed through to their prices the inflation that has happened, with our pass through now, we have a careful look at other categories that might possibly enter into the selection of pre-presents, products for presenting, for gift giving, and which robs our share. It's very, the coverage of the competitors is very high. We don't just compare other companies that sell silver, especially here in Brazil.
More than having said all of that, when we look at the moment of prices that we have and the replacement that we've done in the commercial lines, the answer in volume was positive, and the collection, not even mention it. It was even better. Looking at these different category by category, we're very attentive to the competitive scenario in general, and I'm gonna pass it over to Cassiano to talk a little bit about more about our working capital.
This is Cassiano. Thank you for your question. In this first quarter, we have continued to evolve in our question of stocks and our plan, our growth plan with the opening of new stores and new areas in these digital stores and a better assortment of products, along with these, an efficient management of inventory. We have 77 days of inventory compared to the previous period, and with finished products in the stores as far as the inventory of raw material, even with the increase in the price of all, of gold and silver, we've been able to maintain good levels with high level of efficiency.
In terms of the creation of bases for a more precise coverage of our inventory as we look at each, which is the base for the management of each category, and look at our matter, our model. This is a gradual process which combines the use of data, the intensive use of data, and with people that understand a great deal about our jewelry business, and that we have confidence it will give good fruit over time. As far as the levels of inventory that we desire for our business, as I mentioned, we are used to working with 400 to 450 days of inventory. We can mention that the comparisons of inventory over the years that best represent our business are the comparison in equivalent periods, the first quarter with another first quarter.
Looking at the seasonality of sales and the dynamic of preparation for events, especially when we look at turnover in Life, our stocks, our average stocks in the stores have been reduced by approximately 20% and 10%-15% in Vivara. In Life, we see the people with the lowest level of stock out. We observe an evolution also in the evolution of the turnover in the stores.
Okay, thank you very much.
Next question is from Joseph Giordano from JPMorgan. Joseph, please go ahead.
Good morning. I'd like to explore a little bit more this question of inventory. I mean, we see a movement that's very relevant and the composition of this inventory of finished products and raw material. I wanted to explore a little bit more if you see a tendency, as we mentioned in the previous call, but also looking at the next two years. You have 600 days, a very high level of inventory. In this context, how should we think about the occupation of the factory? We understand that the factory is in a position below that which might be ideal, and we wanted to understand how we might be able to help you out in uplifting your margins and see what's better to look at in the short term.
Then looking at the question of Life and taking away Moments, which is a very different picture, in some way, we could change our mentality looking at the short term and as you normalize the prices of silver.
Good morning, Joseph. This is Cassiano. Thank you for the question. Continuity about the management of inventories, this imposition on our stocks, which is basically 2/3 finished product and 1/3 raw material, we didn't see a big change. You can expect that the stock of raw material will have an adjustment a little bit higher than it had in the previous quarter. However, in general, it's a composition of the business which is very stable. The raw material, we have seen a reduction in the stocks, especially in the stocks of gold, in the inventories of gold. We're doing a great deal of work with stones and other components, which are items which are very relevant in our raw materials inventories, which is different from gold and silver. There's a great diversity of material.
We're doing an evaluation, a specific evaluation of each one of these items, looking at the turnover, discussing the development of new products with the materials that we have the possibility of being utilized. We're very confident that this work will have an evolution, not just in the stock of finished products in the stores, but also of the assortment as well as the management of our raw material. As far as the integration with our factory, which is an aspect which is very important for our business, the factory is a major differential for us. The change in the profile of the products that we need and that we direct very closely to the factory.
When we need less of berloques and we reduce the volume produced, and we need more gold, then we can the time which has more time on the bench being worked on has more added value, but we'll also reduce the total volume. We do a work that's very close because over time we change and adapting our production to attend our demands. As far as the utilization of capacity, if on one side we can adjust with this visibility our internal, the size of the factory to our demand, we also see as a counterpart a special plan for Life of increasing gradually. This is not quick to internalize the production from third parties, which today are about 40% of our total, and over time increase the production in our factory.
We're working very hard on the development of new products that allow us in the future to increase the internalization of this production. This management of capacity is something that we look at very closely over time to gain efficiency and not lose efficiency. Let me mention here a little bit the division of stocks, of inventories and how we're able to see it in the first quarter and looking at the competition. If you're coming to the company for quite a while, you see that we've come for a important revolution since 2023 when we changed the factory. We increased the space so that the factory could absorb more and more this demand for new products, especially in the Life market. Over 2024, we increased the quantity of people working in our factories.
In 2025, we started to gain productivity. We've been reducing overtime over the cycle, re-reducing the index of reworking of pieces. The same piece sometimes has to be redone due to failures, due to defects. We've corrected this in the production process. There's a lot of learnings we pull from the jewelry factory, which is a process which is quite stabilized and well-established, and we bring it to the Life factory, Life production, where we need more scale. We see in Life the use of stones manually and also done by the robots, which we don't have with the jewelry. Over 2025, we have been able to, looking at this number which we shared with you in our results .
Starting this year, as we publish the consolidated numbers and numbers with the CGF inside the CMV, even so, we're able to see this gain of productivity. Everything that does not have in terms of reworking and losses in this, in the productive process is all reflected in the quarter in which it happens. Everything that I'm able to allocate the product, it goes to our inventory, and it goes to the results when the sale actually happens. We look at the factory being more productive. We see those pieces that we contracted last year with a higher level of maturity, and this continues to evolve, tends to continue evolving as this maturity continues to grow.
Another aspect which we see when we compare last year to this year, we also see a level of production which is very high, both in the number of pieces for Life as well as in the gold in the jewelry factory. This means that in the production process, the losses are less. When you compare last year with this year, the losses in the production process in kilos was proportional to what, that which is being produced. Both in monetary value, we lost less this year than in last year, and also gaining the efficiency and controls which had a lower level of loss. When we look at our inventory, over the next 18 to 24 months, it's very important for us to remember that we have this seasonality.
We see that since the IPO, this was the evolution of the fourth and third quarter, even so, we were able to increase our stock. With all the opportunities that we mapped out and haven't been able to map out with the reduction of coverage of the different lines, as Cassiano mentioned, this should remain during the rest of the year and into next year. It's very important for us to maintain these inventories in a healthy level. We need a healthy level of inventory, to replace the and reduce the coverage of that which we don't need. We have stones, components, and many things that we can incorporate into the products that we're developing so that reduce this level of coverage.
This will be used over time, and the effective reduction depends on the seasonality and the events in the seasonality, which happens in the second and fourth quarter. It's natural there will be an increase in the inventory in the first and fourth. In the second quarter, we have a reduction, sequential reduction from the first quarter to the second quarter as it is every year. We continue to evolve and reduce the quantity of days that we have of inventory. Finally, the question that came from the competitive scenario for Moments, the Moments line in terms of sales, number of stores and the, and the brand were much bigger than our competitors. Vivara and Life, when they think in their position in the market, they're much more trendsetters rather than followers.
When we see the revenue that we've had in our stores, in the Life stores, in shopping centers that don't even have Pandora, there's no correlation. We see at the Moments, the behavior of Moments this quarter has much more to do with the pricing, which has varied between the first quarter of 2021 and 2025 than in the first of 2026 than any effect from any action of our competitors. To give you a little bit of color about what I'm talking about, we left a PMV average of Moments of approximately BRL 220, went down to BRL 180 in 2025, and only came back up to 2024 when, in the first, comparing first quarter to first quarter. This, the principal effect of this is the reduction of pieces of Moments year-on-year.
The principal leverage is the increase in quantity in Moments from 2024 to 2025 to 2024 compared to 2024. With what the competitors are doing, we're very focused on following the gains in productivity and in the discussions and the inclusion of silver products, discussion of new alloys. All this is much more important for us than the actual moment of our competitors. Let me ask a question about the Moments. Even though we have sub-categories haven't had an accelerated investment as we've been investing, it's a fundamental category, an investment in the aspect of the growth is the remodeling of the calendar of launching new products.
For this, the second semester, we have a very, very well-prepared calendar of the launching of new collections, and we're very optimistic as we look at the rhythm of the renewal which will grow, which will help the growth of this business.
Very well. Thank you. Next question.
This is from [audio distortion] of BBA. Good morning, everyone. I wanted to ask a little more about the gross margins, especially starting in the 2nd quarter. Is it true, and you've been saying this, that the base, you have a very different base of comparison from the 1st to the 2nd quarter last year was very high? I wanted to ask you how you see this challenge of gross margin over the year due to all of the incentives that you've already done. Please list the levers that you've already placed in the game which can bring a relief for these margins during the rest of the year. The pass-through of prices, I think something was very relevant, was done at the beginning of the year.
Although you already mentioned in the call, these products from the factory, I wanted to get a little bit the perception and the level of confidence that you have in the maintenance of healthy levels of gross margin and not large expressions of gross margins and the basis of comparison in the evolution of the markups.
Thank you for your question. I think I'm gonna zoom out a little bit on this question of quarter by quarter for the moment. Since our IPO, we have been trying to transmit a message that our margins, our gross margins, they're very high and they're predictable because the company has several levers in our business. The first, the initial openings is in the question of repeating, that since the IPO, the margin of the company, the gross margin of the company is around 69%. I think that obviously the commodities have behaved in this period of time, and we reacted to this in introducing new levels, new levers, and working with the levers that we had and use some that hadn't made sense at that time or in the future would make sense.
This is the first point. The margin of the company is, for seven years, stays at the same level of 69%, of approximately 69%, and that's what we're bringing again in this quarter. Again, there's a base of comparison quarter by quarter which has been done with some a little up, a little down. When we look at the year, we don't see, and we said this in the last call as well, and it was also the object of the notes, that the management is confident that the margin for this quarter for the year will be without pressure. I think we're confident of that. However, that's due to the levers that we have in our hands. One lever that's very important, which is the management of our categories.
We have different categories indicating markups and different markups among them that we can manage and sometimes leverage even reducing price. You take a category that has a high markup, such as these collections, and you do a lower markup, but it still is above the average of the company and continues to help to increase the average markup, the average margin up, upwards. The pass-through of the gold price of gold in our finished products is much more slow than of the competitors. We have the capacity to surf momentaneously with margins in some categories in gold higher than them. Also the category of silver, gold, silver and Vivara Prata, which has been doing very well in the Vivara stores with markups, superior markups, raising the margins. In these category, we have three examples.
I can list others as well. There we have lots of sources that we can work with, the team can work with, and the company historically has been doing. I think that another lever that we can work with is the horizon of medium to long-term, and little by little the company has been doing this, are lighter pieces. You can make these pieces lighter basically in two ways. The first, designing it originally lighter and pieces that are 100% noble materials, or a piece that you have today redesigning it, and then we can do the transfer of technology. Principally in gold today, it makes sense, and in the future, maybe it will make sense in silver, but we're investing more time in gold.
In our portfolio of products, of gold products, 30%, approximately 30% doesn't make any sense to produce them with the technology of direct foundry, which you save metal. The other 60% of these 60/20, we have space to raise this 20 to a higher, much higher level over the next two years, and this always helps a little bit with our gross margin. Every quarter you substitute a little more transfer of technology for direct foundry, and little by little, you transfer that, and that helps to offset eventual other effects. I think that is also part of the internalization of Life by Vivara. It was 60% and now of production versus third party, and right now it's our focus is to bring new products to the stores, as Cassiano mentioned, in the Moments category and other categories.
Once we stabilize these introductions, the factory will then become more updated to handle, to focus preponderantly on these Moments products to support the production of the collections and the commercial needs. The silver factory will become a factory of complete silver jewelry that has been doing this, and we've been investing in that direction. The internalization is very important for us. Finally, we have the lever of pricing. To not go into the lever of substitution of stones and metals. We have laboratory diamonds, which is something today we've already introduced. We've been working with and without accelerating it too much, knowing that our clients, our core clients preferred diamonds, natural diamonds, in the future could be a category, an important category.
In our Life pieces, which are gold-plated, yellow gold and rose gold, we look at the competition and the competitors uses an alloy in these pieces. In the rose gold, completely different, which is silver, alloyed silver. We're investing in studies and tests so that in this material, which present a important parcel of our sales of the Life brand, we do this, which is already widely utilized in the market. From the market logical point of view, we're developing technical aspects to be able to do the rollout of these initiatives. Just repeating, to pass a little bit to Elias to comment a little bit on the short term.
I think in the long term, that's what these are the levers that reinforce our confidence, and these are not levers that we're working with for the first time. The company works very well with these levers since the beginning. Looking a little bit more at what we see over the year, we see that the first quarter of this year, we already see that the rhythm of the factory has been reduced a lot because the revenue on the stock that we have was lower than we had in the previous year. Since the second quarter of last year, we've had a factory rhythm similar to what we have today. During this year, we tend to see this revenue subsidy revenue, nominally speaking, very similar to what the levels that we saw last year.
As we're able to see as a percentage, some changes. Since the 3rd quarter, we've had a percentage, an operational percentage that is very high of this net revenue versus gross revenue. When we look at the nominal revenue, the center in the Espírito Santo has an important effect in the maintenance of the level, the nominal level, and the factory tends to continue, the rhythm continues as it was in this 1st quarter. This dynamic of subsidies is directly reflected in our gross margins. Thiago mentioned about the increase in the cap and the pricing average cost of gold, which tends to continue to grow in a very gradual way, and it also softened by our cost of goods.
The melting of gold we have and the coverage of metal that we have here, which is a very protection margin which we have in our gold. Also the pricing which we have almost regained margins in jewelry and have all of these initiatives, as Thiago detailed here, so that we can offset the increases in silver prices and the gross margins of Life. Remember that since the 2nd quarter of last year, we started to see bigger markups with the reduced reduction in prices of expensive pieces that we've had. When we look at the dynamic for the rest of the year, the second part of last year was when we had the biggest margins, the comparative base which was most difficult that we've had during the year.
Even though all these initiatives that we have had are being used to bring us closer. We look at the second and third quarters, especially the fourth quarter, the base of comparison is not so difficult as in the second quarter. The 3rd quarter, we see diverse opportunities, which we've been mentioning, materializing, and also in the 4th quarter, we especially see a gross margin above that, so that when we see the picture of the whole year in March of next year, and then when we're talking with you in March of next year, we expect to have a gross margin stable or slightly positive. As we mentioned in the last call, our perspective for the year remains the same compared to the 1st quarter of this year.
Very good. Thank you. That's very clear. Elias, Thiago, thank you for your answers. Next question is from Vinicius from UBS. Vinicius, please go ahead.
Good morning, everyone. I wanted to see if you could explain a little bit more about this dynamic of the price of gold, and how do you see these positioning of prices of Vivara in jewelry with the spike price of gold and your costs? You commented that you have, let's see, you have advantage in sales and margins, but can you explain how is the price of the competition, the competitors in the categories of jewelry, sterling silver jewelry, and how do you see this evolving looking at the coverage of stocks, of inventories when you replace your raw material at the current gold spot prices? If this is something that we can see a signal of this in the second quarter, how do you see the prices of gold going forward?
You commented on margins for 2026 and 2027. If you confirm that you do not see this as a risk, for your gross margins in 2027 due to the timing and the time average cost of your inventories.
Okay. Vinicius, let me start here, and then Elias. This is Elias speaking, afterwards Cassiano and Thiago might wanna add. As we have been anticipating, we have a lag in the coverage of raw material of gold, as well as gold raw material, as well as finished products in the market. This brings us an advantage, competitive advantage in the scenario where gold has gone up a lot, where we've had a delay of several months in having to replace, redo our prices once, since our average cost does not go up as quickly as our competitors. We saw an opportunity during the first quarter to increase prices in several subcategories of jewelry, and with a very positive elasticity. The elasticity has two principal explanations.
The first is what one that we already knew, and we knew that we could count on it, which are products with a higher added value and less of attacks from the competition, have less elasticity. The problems and the products and the collections of Vivara, our Life collections tend to have a lower level of comparison with our competitors. While the commercial products and the wedding rings, you can find them in other jewelry stores, and they have a higher level of elasticity. That's what's happening in this quarter. As we mentioned, the average cost of the raw material and of our inventories being lower, we have been working with very competitive prices compared to our competitors.
We brought, even in our release, an example of the wedding rings from Vivara, where we increased the prices and still grew in quantity. This reinforces it's very counterintuitive because when you don't think that would happen in any other category, but a competitive price that we understand that we have, and the effect winds up being different than what we see in our historic series. I'm saying this because we still feel that our price is very competitive, and we're very satisfied when we look at the, what we've passed through in prices and how we positioned it during the diverse subcategories. We're gonna accompany this price, the spot price, we're gonna be accompanying where the spot prices for gold go and what our competitors are doing.
Also the performance of each one of our SKUs, of each one of our businesses, and be accompanying this to see where we need to make any types of adjustments. However, in the past, looking back at February and the increased prices and the replacements that were done in April, we're satisfied with the levels of prices that we have.
Just complimenting here, Elias mentioned that obviously we have categories that we look at the competition in a very much better way of looking at it, looking at the commercials and commercial products and the wedding rings and the current chains and so forth, categories that have a important representative. Also in the collections which have a very high level of importance, is something that we'll be able to have a great differential, and the comparability is less. When we see the collections that we've launched this year, we've focused on some of them on the gold, silver/gold, which brings a competitive ticket and a better markup for the company.
Even so, even in a scenario of average ticket below of a pure gold product, we've been able to see sales in these collections which have been launched with very positive impact. Having a product which is, as Cassiano and Elias mentioned, the more value you've seen, but the question of price is secondary. We're creating a desire in our clients, creating store experiences, which is very motivated and irresistible products, and bring this attraction of clients to the store to see our collections. Commenting, as Elias mentioned, it's very fundamental, and we've been working on this so that we don't wind up becoming easily compared in categories in which we are not comparable.
Very good. That's clear. Thank you all very much. Thiago, Elias, thank you. Next question is from João Soares from Citi. João, please go ahead.
This is actually Felipe from João's team, and I had a follow-up on several points of questions you already made. How do you think about the trade-off between gross margin and stock and inventories? The point, do you prefer? If you have a preference of price over volume? Second question, if you have any, if you have some expenses, non-recurring expenses, I would like to thinking about this going forward, it could help us to break down which are more structural factors in these expenses and which are more one-offs. Thank you.
Talking about these expenses, as we commented, Felipe, we've had a G&A very much in line with the past year, and we've been able to be very disciplined to maintain these general expenses at a level, in a good level, a fixed level, and we shouldn't have any surprises as far as that goes looking forward. The SG&A with these expenses and sales, the two principal expenses that we've had in this quarter were two that in large part depended on our decisions. We're doing a transfer between stores, as Cassiano mentioned, to be able to have a more optimization of our inventory, which has a direct reflection on our ROIC.
How we're spending more now, we're producing less, 'cause we sent from one store to another store without having to have any production, and the other store utilizing the invested capital. This is routine for us, but in the level that it's operating today, that we didn't have over time. In this sense, this line of freight should be optimized. Once we look at the picture of the whole year, we're gonna see that the gross revenue will be as it always was. The marketing line, I wanna involve a little bit that line. As I mentioned previously, it was the basis of comparison with the first quarter. We still have the second-best quarter in terms of % of gross revenue in the marketing expenses.
We're looking at the marketing expenses, we look at it much more than in just % of gross revenue. When we look at the expenses we've had in this first quarter, they had a bigger effect based on a comparative basis, also due to the lower revenue that the first quarter normally has. In no way should it change the dynamics of neither our selling expenses or SG&A, it shouldn't have any effect. As far as the trade-off between gross margins and turnover, I think that it's case by case to understand item by item what makes sense to put a product, for instance, that's not active, but that's still representing some sales during the next few months. This obviously, we can also do a quicker turnover in the short term.
In detriment to our margin. João is gonna look at our historic levels when we see no pressure, no margin pressure from this attitude looking at these inventories. Our business has a spectacular characteristic, which is that we can melt down our pieces. When we're talking about gold, it's an option which is very viable, and this also, this helps us both for products which we may have a coverage, which is very high level of coverage. When you think you're gonna have a quicker giro or a quicker turnover by melting it down, or you can melt and you don't have to put it on sale. You can melt it down and make a new part, and you presume that it will sell in a better period of time.
Those products that you actually have, you see that the turnover is very low and you have no perspective of recovering this cash in a reasonable horizon of time. In the past, last year, we did a lot of melting, and now we continue to do melting, and we do more or less, in our estimates, about two months of gold for production to melt into finished products, which it means that we avoid buying gold from third parties during a large part of this year. These are initiatives without having any impact on sales. We do all of this to maintain our sales velocity. These are initiatives which for us are very viable, and I think the trade-off that we have is always looking at these three pillars, the margin, the turnover, and bringing the gold back and turning into something new.
Okay, very good. Next question is from Felipe Rached from Goldman Sachs. Felipe, please go ahead.
Hi. Thank you for taking my question. I wanted to do a quick follow-up. Excuse me for insisting on the theme of gross margin and costs. In 2027, by our estimate, if the pressure on gold, the cost of gold should reach a peak in more or less in the middle or second half of 2027. Does this agree with what you expect? In this sense, it's very clear as we look at all of the levers that you mentioned, such as price, coverage, which the long level of coverage that you have in jewelry to produce. Do you think the thing more than you are currently thinking more about silver in 2026? Thinking specifically in 2027, do you think that this level which is available to you in jewelry will be enough to offset the prices of gold?
Do you think that in looking at the future, there could be another category, perhaps Life itself in the pipeline of innovation where we see dynamics that are better to look at an eventual price of gold? I don't want you to have to repeat all the levers you already mentioned in previous questions, but just to see if there's any other change or a specific situation in 2027, specifically in 2027.
Okay, Felipe, thank you for the question. It's important, very important for us to remember that the growth that we have in Life and even of the Vivara Prata and gold inside of our jewelry, we're able to do a category management for different effects in each one of these categories, looking different using different metals. The plan for the year is for us to continue taking advantage of this lag, this gap in prices between the costs of our finished products and the cost of our gold as a raw material, and the price, the spot price over time. When we have to go back to buy gold from our suppliers, in a more normalized way, we should continue to evolve.
As part of our strategy here in Vivara, it's always been a part of our strategy to have a stock in stores which makes it possible for us to not lose sales. This increase that we're gonna have to get to until we get caught up with the spot prices, it will be gradual during 2026 and 2027, and even 2028 in a way that by then we will have this introduction of the initiatives that we've been speaking about of Life, and as Thiago mentioned, the growth that we see in the gold, silver and the Vivara gold, maintaining our gross margins of approximately 69% or 70%, which we've always been maintaining over time. This is the dynamic which we should see during the rest of this year, and we'll see this softened over time and aligned with the margens brutas that we'll be maintaining.
To add to what Elias Leal said, it's always important to remember that in the major brands, the price can never surprise. The surprises must always be gradually, gradual and without jumps up or down. We have a stock coverage which is a differential which helps us to get through periods of great price variation tranquilly without huge increases because we're attentive, constantly attentive, and we have this great equalizer, which is the prices of our different types of products and the price of the raw materials and the performance by sub-category, which is always gradual but always continuous, and always looking at the market and adjusting this as part of our business without any jumps.
Very well. Thank you very much. The question and answer session is now ending, and we'd like to pass the closing to Thiago Borges for his final words.
Thank you for your participation in this call. Lots of good questions. Due to the time of the call, which is I wanted to make a very short comment. In this quarter, when you exclude the effect of subsidies, the company grew its EBITDA in line with revenue. We have a operational performance was extremely healthy. The trajectory of the reduction of inventory with the maintenance of top line of approximately 14% with 16 same-store sales in the stores of 10%, and the lowest level of growth in our inventories quarter-over-quarter since the IPO, showing that we're on the right road. The generation of cash was extremely strong in this quarter.
Our expenses, which in this quarter hit above the previous year, above the revenue of the previous year, are still 100% within what we expected, what was expected, and with a annual comparison without bringing any pressure on us. Having said that, wanted to reinforce an invitation, which I did at the opening, inviting everyone for the next 45 days to visit our stores. We have Mother's Day coming up on Sunday. It's a special period for us to give that special person that's so special in our lives. In sequence we have the Girlfriend's Day and Valentine's Day pieces, which are irresistible, also beyond prices, also an experience, a store experience which is superior with a team which is very involved to bring you a solution of what you're looking for and to give in presents.
Well, in the name of the team, I wanna thank you all very much, please stay with us and our team, a Happy Mother's Day to all.
The video conference of results with reference to the first quarter of 2026 for Vivara is closed. The IR department is at your service to answer any other questions that you might have. Thank you for the participation. Please have a good day. Thank you.