In this quarter, the company will dedicate 100% of the time in this teleconference for questions and answers. The audio with the initial commentaries and analysis of the financial performance done by Thiago Borges, CEO of the company, and Elias Leal, CFO and DRI, is available since yesterday and can be accessed at any time from the IR site of Vivara. If you need simultaneous translation, we have this tool available, clicking on the globe icon, which is written "interpretation" at the lower corner of your screen. Just select your chosen language, English or Portuguese. For those who are listening to the conference in English, there is the option of silence and original audio in Portuguese, clicking on mute original audio. For the sell-side analysts who cover this paper, these securities, we make it possible for you to participate live.
For this, please send your message with your name, the name of your company, and the question on the Q&A icon on the platform. We thank you for your registration in the order in which you have entered. Due to the dynamic, the name of the company that you represent will be automatically on the screen so you can ask your question. All you have to do is use the request button on the bottom of your screen. For the other participants, we invite you that the questions be sent through the icon of Q&A on the lower right-hand corner of the screen. If your question is not answered during the video conference, the investor relations team will get in touch with you afterwards to answer any questions you might have.
Representing the Vivara team, we have here with us Sr. Thiago Borges, President Director, and Elias Leal, CFO and Director of Investor Relations, Cassiano Lemos, COO, and Caio Barboza, Manager of Investor Relations and Treasury. We will now collect our questions. Remembering that to make a question, just send your request to the Q&A icon on the platform on the bottom of your screen. Let's go to our first question from XP, and we will send it over to turn on your audio. Please go ahead. Danni.
Good morning, Thiago and Caio. Good morning, Elias, and the rest of the team. Thank you for taking my question. I have two from our side. First is focused on Life. We have seen a scenario which is more challenging in terms of growth. Obviously, it is at a level which is healthy, looking at the brand overall.
We see, for example, some signs of points of attention. For example, in the general competitors on bringing other challenges from the side of pricing. So I wanted to understand a little bit how we can define this strategy going forward, especially at moments when there is the biggest challenges that we see. So we do not depend only on the direct competitors, the category that we are seeing for the first time in this exposition on the macro side, those who are present, but also have to see a little bit how to think about this evolving over time. But to understand a little bit, what is your strategy in relation to the brand from the standpoint of the balance of growth, margins, et cetera, and innovations and eventual changes in terms of your positioning and pricing? That is my first question.
My second question is in Vivara, a little bit about the head of the pricing area. You talked about on the YouTube video that you have no additional material, but we have some adjustments, especially below the commercial area from wedding rings and so forth. To look at some SKUs, see some going up in terms of categories.
Thank you, Danni, for your question. This is Thiago. The brand overall to become more and more less depending on one category, which was 50% of our business, and transitioning the brand into a complete jewelry brand. We involved other categories in the brands, especially collections, commercial, more commercial questions, and wedding rings. We've seen an attraction through this lens in the commercial area.
We also commented on this, the growth, which is very healthy growth in that area in the second quarter. As far as the collections, we have a calendar of launches, very robust. We have the revenue from Life and products launched during the year, which previously ran around 40%. This year, it's below 20%, but we're looking at this number, and we think there's a correlation, very important correlation of this number with same-store sales and the growth of our business in the stores. Just a few things that we've been doing, which have appeared, perhaps not completely appeared, but in the internal data, shows that we're on the right road to looking at same-store sales of Life at a level which is much better than we've ever done in the last two quarters due to the calendar effect.
As far as your second question of pricing of Vivara, we had a scenario. We're a very high growth, the principal commodity which affects us, working a great deal on the categories gold and silver, and we have a lot of silver, going from 5% or 6%- 10% participation in the second quarter, which helps a great deal. We have products which are in the entry level, which are more competitive with our business, as well as several initiatives for engineering or product engineering, which we're doing, and technology in the manufacturing process. The movements that we've done of pricing, we don't see any changes, but it's a very good market. When we look at this, the price of gold in the last 60 days, it's been an unprecedented fall in the value of gold and the price of gold.
Above 50% during this very short period of time. We have to adapt to that, but also the principal consequence is that all of our initiatives that I've commented internally, most important is that when we look at all of the levers of value that the company has presented over its long and successful history, has always followed gross margins of 69%, 70%, independent of the scenario of the price of its principal raw materials. I think that in the first semester, we have the highest gross margin in history and looking at the highest levels, showing that we have several levers within our business. Beyond that, the strength of the brands and the customer experiences within our stores, which the clients have had more than 3,500 salespeople, and we've been able to put our policy of markup to maintain our margins.
We're very confident that we'll continue in that trajectory in the next quarters and next years.
Very well. Thank you. Our next question is from Eric Huang from Santander. Eric, please go ahead.
Good morning, Thiago, and everybody else, for your space. My question is more of two questions. The first is more on the side of expenses. We saw an increase, a higher increase in the price of raw material as a whole, which has an effect on the stores. We also have to understand a little bit better if there's anything of expenses that are operating expenses in the stores during the second half of the year.
Also, we should look at the run rate of OpEx, thinking about perhaps for the rest of the year, so we can see if there's any space for looking at a more comparable base of expenses in the second half of the year. The second one has to do with, you mentioned, Thiago, about the evolution of the collections. I think that I'd like to understand how's your mentality thinking about the second half of the year, also in the acceptance of product acceptance, which products are really a point at the lead. Again, we've got to look at this trajectory of Life by Vivara, which is very sequentially, very hooked up with our calendar. We look at the same store sales, which is very stable and very consistent.
Hi, Eric. Good morning, everyone. I'm going to start with talking about expenses. When we see our level of operating expenses, compared to the first quarter of last year, we grew 10.5% gross sales, or gross revenue. When we look at the two percentage points that we have seen in this semester due to the calendar effect and the World Cup, it has an effect on our expenses, on our operating expenses. Also have to remember that in this quarter, and in this half of year, this quarter, we had to look at the results.
In other words, we had this during the period of 10.5% of growth in our operating expenses with a dilution of growth of almost two percentage points in our revenue, which we would have to have due to the calendar effect, and principally, the expenses on comparable basis. In other words, we're already able to see that this dilution is happening over time.
We have different effects on each one of them. On the line of personnel, we had a natural increase in the hiring of people because these are new stores that we're hiring. We're accelerating the number of stores we're opening since last year. We have 51 stores open in the last 12 months, versus 43 last year in the same period. This naturally impacts not only the stores that are already open, but the stores that I'm going to open. We've researched that our guidance, we have several stores that are under construction, where people are being hired right now, and that will be opening during the second half of the year. Part of this effect is already in the numbers, but we're waiting for these stores to open.
We hope that this increase of personnel from the new stores will continue to be diluted as these stores open and mature and the gross revenue grows. The other side, we are also already able to see several actions which bring a dilution or a lower level of growth in revenue and expenses during the second half of the year. We thought in the release. The principle was that freight, which we have reduced quite a bit to zero, the number of transfers between stores starting in July. We did this since the third quarter of last year, which is several sales of several items without the need to change anything. If there are any things that we can do of the transfers between stores on the line of freight compared to gross revenue, it has been stable.
This item of freight here is, for instance, checked. We think that going forward, we should not have any pressure on that line. The line of operating expenses, as I mentioned, could continue its dilution, which we have seen in the second quarter.
As far as Life, this is Thiago speaking. You asked for a little more visibility about that. These initiatives that we have done to transform the mix of products more completely between the stores. This has been happening, and we expect that this number of new products versus the total that we have in the stores can accelerate even more, starting with the fourth quarter. We have seen a little bit how this mix has reacted very well. We are very optimistic about Life for 2027. The new stores that we have opened have performed well and several points have appeared.
Some new stores with good locations have appeared. Retail has reacted more widely than us. We have seen opportunities between shopping centers with other brands who may be optimizing their store portfolio. We are taking advantage of these spaces to continue expanding the Life brands in the best points in shopping centers. We have seen a pipeline, a very qualified pipeline of new stores, so that together with the same store sales of Life, will help us to help the brand to grow. Continue to help the brand to grow.
Very well. Thank you very much for your answers. Our next question is from Felipe Rached from Goldman Sachs. Felipe, please go ahead.
Hi. Good morning, everyone. Thank you for that. A little more detail about your performance in the month of July during the World Cup. Thank you for that.
Seeing the number of impact of this growth, I want to understand a little bit how was the flow of sales in the days in which there were no Brazil games compared to April and May. The idea is to separate a little bit how much of this deceleration came from the World Cup and how much was due to other factors. If you can give us these details and how has been the recovery after the Cup. That would help us great after the end of the World Cup games.
Felipe, this is Thiago. This analysis that we did of the impact of 2% on the top line of the company in the quarter, in the first half of the year, BRL 19 million behind the World Cup was the calendar effect.
The way we look at it is when there are days on which we had games, the World Cup games, Brazil games, our stores were 100% in shopping centers with the exception of one on Oscar Freire. These, if you agree with me, that the shopping centers basically do not even hardly open during those days or with very few hours in operation. We saw that compared to what we would see on a normal Sunday compared to what we saw on the days when there was a game, and we are able to calculate this impact. This impact of 2%, half of that effect is from the World Cup games, and a half is the calendar days of holidays, which came during this quarter, which hit us in this period with Corpus Christi, which came very close to the Dia dos Namorados.
Valentine's Day was a very important date for us, and last year we saw part of Tiradentes, which happened on same one weekend, and this time it was two. Which wound up being long weekends on holiday weekends. The number of workdays compared to last year. When we see all these effects, we always look at how things have been going on Fridays, on Thursdays, and on the weekends before those games. This is the number that we come up with. However, in general, even with these impacts, we have had a month of growth without much difference compared to the other months.
Felipe, this is Cassiano. Also to complement what Thiago said, and this was my first June here with Vivara, and I was very impressed with the distance of Dia dos Namorados to the business. It is very strong in terms of the magnitude of the impact.
It is close to May, it was very close, very strong. An event on Valentine's Day, Dia dos Namorados here in the month of June, it was very successive days. 11 and 12 were very good days for sales. It was a month that had a good performance, it was very important. This effect of the World Cup, it passes the visibility because it was very specific on those days. For the month of June overall, it was a very good month, even with these external events.
Also, I would add this to Cassiano, if you look at the day, at the 12th, which is the Girlfriend's Day and then Mother's Day, both of these dates were the best. It was the best Mother's Day in our history and the best Girlfriend's Day in our history. Not just this effect.
It had the effect of execution, that we are able to bring excellent days of sales for Mother's Day and Valentine's Day, the Brazilian equivalent of Valentine's Day. With several of our stores hitting their sales records for those dates, more than 100 stores reaching record sales on Mother's Day or Valentine's Day. In consequence, some of the other stores had their best days ever. We looked more at profitability. I think that the gross margin was a highlight, which was beyond sales. We wanted to see this in this quarter. Thank you very much.
Thank you, Cassiano and Thiago. I am interested to know, because other retailers and other shopping center operators said that the flow during the month of June was relatively weak, and it only came back a little bit after the Cup. The calendar effect and all that, it seems to be very positive, your impact, compared to the others. Our next question comes from BTG Pactual. Please go ahead.
Thiago, Elias, Caio. Two questions from my side. One, about stocks, your inventories. We see that there is an improvement in the inventory cycle due to the reduction in the number of raw material, in the months of raw materials, and our finished products has remained high. How do you see that this line will behave during the next quarters in this scenario, more constant scenario of the price of this commodity? That is my first question. The second question is, the revenue that you have been receiving rebates for the planning and seasonality with the revenues from these with the level of production affecting them or not. These two questions, with the amount of subsidies that you have received.
This is Cassiano. I am going to start with your first question about our evolution of our inventory, and we are continuing in line with our plan. The same mission, to return to the historical levels of inventories to 400- 450 days during next year, during 2027. Our approach in relation to inventory can be divided into two major blocks. The first, that the raw material, which is approximately 30% of the total, and it comes from two segments. One, our objective is to have greater efficiency in the chain, which is doing well. In terms of the components, with a variety, is a large part of the variety, a great part of our business, we work with the age and efficiency in these numbers. The second block are the finished products, which represents 70% of our total inventory.
On this front, we are working especially in the management of categories, looking at each sub-level on a specific level with assortment to increase the presence of the items which have the highest turnover, and getting rid of the ones that have lower turnover. Because we want to increase our inventory of high turnover items. Looking at these initiatives, the objective is not the reduction of inventory by itself, but to increase the efficiency of our inventory and create conditions to accelerate this turnover.
I think that this quarter we have seen that the biggest highlight is cash generation. We reached the highest level of conversion of EBITDA to cash in our history. Also the principal reason for that was the reduction that we have seen in days of inventory. We have been talking about this since the second semester of last year, always looking at what actions we are taking.
Now we are starting to see since the first quarter, but now even more strongly in the second quarter, in a more cash generation. This effect on the reduction of production and consumption of inventory has affected both the revenue from our subsidies, answering your second question, as well as affecting the net profit. In the second quarter, we have seen based on a very comparable base compared to last year. Looking forward, we have this different dynamic between the factory and the subsidies coming from our district centers. Last year, as an industry, we had a subsidy a little bit higher depending on the state, but we also had a factory in a production level that was lower than the third quarter. This year we have the DC and the factory continuing in its production level close to the second quarter.
We tend to have, in the DC, a lower level of subsidies in this quarter. The fourth quarter, we see the dynamic which is more comparable from last year. This dynamic of subsidies and inventory reduction also winds up affecting, and this affects our levels. When we isolate that effect, our net profit has been increasing by 25%, as we mentioned in our release. Important to show the efficiency of our business, excluding these effects of subsidies and accounting advantages.
Thank you, Elias. Thank you very much. Our next question is from Vinicius from Itaú BBA. Vinicius, please go ahead.
Thank you. Our question is, we're talking about the buy side since yesterday, that the growth of the top line is the biggest concern for the second half of the year.
You said that was a little bit below what you expected due to the impact of the World Cup and so forth. When you look at the trajectory of growth since July, especially after the World Cup, if you're seeing a recovery of growth more accelerated with Vivara. Based on this performance, if you think that it's possible to look at a higher level of growth, a double-digit level of growth. The second point is about gross margins. You said that in this level of commodities, which is a little higher, want to understand what do you still have in the way of levers to be able to expand this even more, that margin expansion. We've done a lot in terms of product engineering and if there's any other levers that you still have to use to improve those numbers.
Vinicius, thank you for your question. This is Thiago speaking. I think that the way we look at this internally, we have maintained the growth of the second quarter of 11%-12%, and the other quarters, it's more effect of the calendar effect. What we see is it's a type of pace from the growth of our business, and retailing is done.
It's very dynamic, this scenario, and these levers of growth which we've been having, the number of stores opened, and something that we've done here, we want to comment on the digital side as well, to improve the experience, the customer journey, and we've had a very good space in this channel. So much so that we've started to continue to release the same store sales with the presence of digital. Because now the client chooses, and all of its efforts and its physical points, you see it in an integrated way.
The same-store sales in the second quarter has had this calendar effect, which is more or less 10%, which is a very healthy number growing on the macro side that as we know very well. We have several internal initiatives, and we're very confident about the top line. In relation to the gross margin, it's important to mention that this company, if we look at its history of 10 years back, of our implementation and our institutional plans, the margin is 69%-70% year after year, whether it's rain, sunshine, whatever, interest rates up, interest rates down, no matter what happens, the margins are the same.
We have several levers to say that our margins, due to external levers, their internal levers, the strength of our brands and so forth, to be able to continue to process any external effects and return this to the client in an easier way. We're continuing to look at this, and the efficiencies that we'll have here in-house. The main preference is to pass this to our clients through productivity and maintain our brands more and more leaders in their respective segments.
I'd like to add to that, Thiago, about the gross margin. We have two approaches. One is looking at the products, and the other one is looking at the portfolio of products. We look at the products, would you consider it to be the performance and city, the way in which it's located, the raw material involved, and also what's happening in the unified numbers.
If we look at the total portfolio of products, we see the opportunities, as Thiago mentioned earlier, to look at the lighter pieces of new technology, new production technology, and also to give greater emphasis on categories such as silver and gold. We have to read the market, see what's happening, look at our products, our portfolio, and look to make these adjustments in such a way as so that the variation of the raw materials is only one component of the total picture. We have several elements that mean that we're able to be hitting the mark over time and continue to maintain the stability of our margins for the business overall.
Very well. That was very clear. Thank you. Our next question is Alexandre Namioka from Morgan Stanley. Alexandre, please go ahead.
Good morning, everyone. Thank you for taking our question here. I wanted to ask two follow-up questions, one in relation to the top line of Life, which I think was the first question of the call, focusing especially on Moments, the Moments collection. To try and unlock a little bit, how did that performance, if the performance of that line is being impacted by the lack of new launches in the segment? Also like to reinforce, if you could repeat to us what are the levers for this growth, specifically for the segment of Moments, it would be very interesting. As far as the gross margins, we also felt that, in general, it was a positive highlight for the quarter. Also we thought perhaps it would be important to see what are the levers that you've commented on the recent calls.
One of them specifically was in the segment of Life segment, which you mentioned, the increase of growth in the share of direct channels. I want to understand how much of this increase is already impacting the gross margins, and how much time there is to grow in this method of production. As far as Life goes, I'm not sure how much you can share as far as the initiatives of new alloys, new metal alloys, because we've seen these products in Life arriving in the market, and how much we should think about the entrance of these products and the impact of these products over the next few years. Thank you.
Thank you for your question. As far as starting here, I think all of us are, in a certain way, in the same boat looking at Life.
The Moments collection category, you have different pieces, bracelets and so forth. We have a lot to do with these two fronts. New product launches should start arriving at the market more strongly, starting in the third quarter in our stores, and that's what's going to change the category. I think that certainly there'll be lots of space for this category to continue to be relevant in our business, and we're going to look at the question of the level of prices we can protect it for that category and look at the work of evaluating the costs to see where we'd have space to cut costs. Your next question, and the direct answer, it's more directly connected to gold, but it also have to migrate to silver.
Silver, of course, has just a few centavos of the price of gold, it has a direct impact on gold, and it has a comeback that's much quicker. We focused on this margin, as you saw in the first half. As a direct function, it helps, but something marginal. Because the company has been doing this work in the direct function for a long time, this migration for the products that we can touch, and our mapping today of products which it's possible to have space to increase, which is already being done in a direct result, the 60% more or less. We've been working on month after month to increase that percentage. In relation to the new alloys, the metal alloys, this is a subject which is very strategic and very important for our sector in general.
We have accompanied the worldwide tendencies in relation to that subject and standards of the different market standards, depending on the geography in which we're looking at. We've accompanied this very closely, and we've also been working on to have this in-house, this technology and the methods that are necessary to be able to react quickly. I think it's part is market logical and part is industrial. Which we have evolved to be able to be ready, if necessary, when necessary. Not even so much if necessary, more or less when necessary. For our business, we understand that we can continue changing. As far as new alloys, I think that it's a characteristic, very similar as it was, the mix of metals at the beginning when we introduced Life Silver 15 years ago, when we introduced the gold, silver in Vivara and innovation, as a laboratory product.
Innovations, I don't see any break in this line. Much more a continuity of what we have always done, using new alloys as we have done over the life of the company, over the history of the company.
Very good. Thank you very much. Very clear. Our next question is from Guilherme Domingues from HSBC. Guilherme, please go ahead.
Good morning, everyone. Thank you for the space. I have a question about the digital sales, which continues to grow well, very strongly. In the quarter, there was a lot of growth in the app, and wanted to see how do you see the opportunity to increase the digital penetration in the next years? Up to what point this growth could happen without impacting the productivity of the stores? That's my first question. The second is in relation to competition of Pandora investing heavily in Brazil marks in the launch of new products if you see this as an important change in the competitive environment.
Thank you, Guilherme. This is Thiago speaking. To answer your first question, we analyze in external benchmarks, we see a penetration of digital sales above ours, which gives us confidence that there's still space to work, to grow there, to work there, to increase our participation in that channel internally in a consistent way over the next years. I think the company has been doing that very successfully. However, there's still space to increase even more our participation in that market, in the short term, this has made an evolution of our digital platform and the layout of several pages have already seen the increase of the rate of conversion.
In several others on the customer journey, in several other pages, we have been improve the experience, increasing the time of involvement that the client spends, which has reached almost two minutes on the site. The initiatives looking at these fruits is the participation in the app. The conversion of the app reaches more than two times the conversion of the site. The client who's more faithful, who communicates more efficiently, more constantly. We have a relevant number of clients in our app already, which already helps us with the launch of new products and the speed of reaction. These actions have been happening, have been accompanied in operationally our delivery periods with our relationship with our clients and several other items, which are the backbone of digital sales. We've evolved quite a bit.
However, there has been a evolution in search and personalization, the big agenda of content, and we see lots of space for the digital to continue to grow at strong rates of growth and for various semesters to come. At the first moment, we see lots of synergy with the stores. Between 20%-25% of our sales, the digital sales, are done with the code of the salesperson. Our salespeople are very well trained, and they don't lose sales if the client is willing to go and buy online or come back two or three days later to the store. We've done this work very carefully, incentivizing our sales team, our strength of our sales team, which is one of the strengths of our company, to not lose sales and use the concept to the maximum.
Not only the competition, as you mentioned specifically, but we also measure in the shopping centers that we have stores, Pandora also has. How was the Life performance compared to the Life in shopping centers that don't have a Pandora? We see that how there hasn't been many correlation, it's very little coincidence. We even actually grow slightly more in shopping centers where Pandora is present. We see that in relation to the relations that they're doing compared to what we've shared in the way of results. Obviously, we're not immune to what they do, Our actions today are affected by internal effects as well.
Thank you very much. Our next question is from Ayrton Santana from Bank of America. Ayrton, please.
Thank you, Thiago and Elias. Thank you for taking our questions. A couple of quick questions from my side. The first is on the question of the expenses in the marketing line. I wanted to understand a little bit about if you could separate, what's the higher marketing level that due to these commemorative dates like Mother's Day and Valentine's Day compared to the past. If you could look at the seasonality, perhaps this is a level of marketing which you have done a higher level of marketing and which we can expect going forward, and how we should think about that going forward if you're able to deliver that as well. The part of generation of cash, you've had a good cash generation in this quarter.
One of the questions that has caught our attention when you look at the receivables from last year, it was a question of you having anticipated a little bit last year, but we also have this tendency that you are closer to the consumers with more timed sales, more monthly payments plans. Finally, another quick question given this interesting performance and the question of watches. If you could give us a little color about the growth in that category, that would also be interesting to hear.
This is Elias speaking. In your first question regarding our marketing expenses, we see that the biggest in growth that we've had was in the first quarter, when the growth is much higher due to the comparative base of the first quarter of last year, which was a growth in expenses compared to our historical levels.
We work here to maintain our marketing line along the historical lines of 4%-5% of net revenue, dividing those expenses between what we spend on the online marketing and the offline marketing. This online marketing, we invest a great deal in performance marketing as well as in sales to bring the customer to the store to communicate with him, the Gold Week and so forth, and all this attached to our brand, and the performance that we use to promote sales. In the offline market, the events and the influencers, all of the actions that build our brand in the medium to long term. The biggest increase that we've had, the biggest part of the increase that we've had, was in offline marketing. It's where we had the more biggest reduction last year, and we saw this sequential difference of increase this year.
This is an investment which it brings returns in the medium to long term, building the brand, and also, most importantly, for Life. We have a brand that is younger and that is building this brand over time. It's a brand that's more and more our own brand, a complete jewelry store, and a brand that doesn't compete with the Vivara line. Looking at the two lines together, the two markets on and offline, we see growth in offline, gaining efficiency. We are improving our ROAS year after year. As far as working capital, we see that the biggest driver for cash generation is our inventory. In other words, the reduction in number of days, or whether it be in the reduction of the advances that we make to suppliers, especially suppliers imported products. This generates more cash. It uses more cash, and we have reduced our inventories.
We also see the behavior of the consumer when the interest rates are high, there's a tendency to pay things over time. The percentage of time sales done on credit cards doesn't change too much, but the percentage of these sales which is done paid, which was cash or made in only a few payments, has increased up to as much as 10 monthly payments. We have a minimum payment for both brands since our average ticket and many clients have decided to use time payments for these purchases, and stretch out their time payments. This affects us, but when we look at the natural cost of cash on hand.
Second part, this is Thiago Borges speaking. The last part of your question about the category of watches. This good performance is due to the work of the team which has been working on this category.
We're looking at the internal aspects. We have strengthened our relationship with our partners, but also looking at our own brands, like Life, which is the second brand of watches in our portfolio, which has been growing year after year. Today, it's the second-largest brand, and this shows that this work of selecting external brands in the development of products. We also have a breakdown of which store is where we're going to put which mix of watches. In some, we have to negotiate with partners, and we've been working very strongly with that, with our partners. Also work a lot on the management of the availability of these inventories. It's a category which has no substitute products, obviously. If the client wants a certain brand, that's what he wants. He wants that, and we're not able to offer him anything else. The availability is very important.
The online channel also helps us quite a bit in this category. Online is a product which the customer does not necessarily have to prove to protest the amount. We need the 40. Online and offline, it goes very well. These characteristics which explain internally the good performance of the category.
Thank you very much. My next question is from Gustavo from Bradesco BBI. Gustavo, please go ahead. Gustavo? You can open up your microphone and speak. Go ahead, Gustavo.
Hello? Hello? Okay, sorry. My headphone was turned off. I just wanted to follow up about the line of finished products. When we look at the breakdown of these products, we see that the participate of Life has increased year-over-year. I want to understand a little about the quality of this inventory and a breakdown of how it is in between collections, like moments and collections.
Looking forward, if you can give us a little more, if there's any way to reduce this inventory, and I want to understand your question in terms of gross margin and reduction of stocks of finished products looking forward.
Thank you for the question. This is Cassiano. In relation to the stock. You're talking about the portfolio and the proportion of stock, if it's well-balanced between the different types of products, and between products of a high and low turnover. We mentioned, we're heading to become a complete jewelry store, which means that some types of products have a development and a commercial use that is a little more accelerated than other types of products.
We're able to do with a great deal of constancy all during the year. We have moments in which we have commercial activities, well-structured, aimed at accelerating the sale of a certain type of product or a lower turnover product. This product of balance is not a problem in terms of the expectation that this might bring to inspect our margins. We don't have this expectation because it's continuous and very well distributed over time.
Okay, thank you very much. The question and answer session is now closed. I'd like to pass the microphone to Thiago Borges for his final comments.
Thank you all very much for your participation and active participation in our call on the second quarter, the entire team of Vivara and our commitment and the great deliveries that they've made. As a final message, I just wanted to reinforce what we had the opportunity to comment on during the call, which is the generation of cash being in the highlight that we perceive important for this year. Our business model has shown once again its resilience, and we have been able to have a gross margin, a high gross margin, healthy gross margin, and considering the calendar effect, looking at the first quarter, and we continue very confident. To close, I wanted to invite all of you on this Sunday, Father's Day.
If you haven't yet bought a present in our stores, we have a complete mix of rings, collars, bracelets, as well as excellent watches. Beyond this whole full mix, you're going to find things at the price at which you desire any product in our store. Let's go visit our Vivara stores and Life Stores in the next three days so that we can honor our fathers of our families. Thank you all very much and have a great day. The teleconference results for the second quarter of 2026 of Vivara is closed. The Department of Investor Relations is at your service to answer any other questions you might have. Thank you very much and have a great day. Thank you.