Hi, hello. Magdalena Kopaczewska, Investor Relations, LPP, and Przemyslaw Lutkiewicz, Vice President of the Management Board, LPP. Good morning. We would like to welcome you to our result conference, during which we will talk about our results for the first quarter. We will tell you what interesting events have taken place ever since we saw you last time. We will tell you about our plans. Towards the end, we will encourage questions from you as usual. We will start with the events. I will talk about the collections and trends and then turn the floor over to Przemek. The first quarter of this year marked the debut of the home products collection in the Reserved brand. The ReHome offer, as we call it, is only available online, which reflects our strategy to offer a wider assortment in the online channel.
The collection consists of three lines: classic, minimalist, and romantic. Most importantly, the products in these lines are designed by our design team, and the orders are placed largely with the Polish manufacturers and suppliers. Already today, we can see that the most popular products in the ReHome collection so far have been decorative products, porcelain products, or glass products. Mostly in the Japandi style, that is the combination of the simplicity of the Japanese style with the Scandinavian style. The share of ReHome sales in the Reserved brand's total revenue in Q1 accounted for about 2%, and in Reserved's online revenues, more than 5%. The first quarter also saw a joint project between Reserved and the Polish brand Le Petit Trou, as a part of a capsule collection of exclusive lingerie for women.
Our goal was not only to increase the recognizability of the brand, but also to offer our clients a premium product at an attractive price. The collection is available online because, first of all, such a product requires an appropriate setting, and secondly, as I mentioned before, our strategy also envisages broadening the offer in the online channel. Already in the first days of sale, the collection met with a very positive reception, both in the fashion world and among our female consumers. The months of April, May, and June are usually a time of special events such as holidays, communions, weddings. It is for these events that our brand, MOHITO, prepares its collections. Similar has been the case this year. Our clients have particularly appreciated comfortable single-color suits that this year were very popular as double-breasted jackets with cigarette trousers.
Trousers, we also sold pencil skirt, shirt dresses, but also more sophisticated dresses with ruffles, popularly known as Spanish dresses. Interestingly, customers of MOHITO also bought basic products of the brand, probably because of their versatility, so oversized shirts, tops, and T-shirts in neutral colors. We are also pleased to see that MOHITO customers are eager to buy online. In Q1, MOHITO's sales in this channel accounted for almost 35% of the brand's total revenue. We will return to the topic of MOHITO later in this presentation, but for now, I will pass the floor to Przemek, who will talk about the other events. Thank you very much. Ladies and gentlemen, I should start with the changes in the structure of our logistics. You might remember that we have established LPP Logistics, and this partnership continues its development abroad.
Now, two further subsidiaries were established: LPP Logistics in Slovakia and LPP Logistics Romania. This is a result of our strategy of strengthening, on the one hand, of our logistic endeavors, and on the other hand, the strategy involves optimization and lowering the cost of logistics that are considerable, particularly in e-commerce. Let me remind you that so far, we have had two logistic centers abroad, in Slovakia and Romania, and that was in the outsourcing model. That means that we rented logistic warehouses in those two countries and also an operator, a company that would provide employees and was responsible for storage, warehousing-related activities in those storage spaces. We still do that in terms of renting the spaces, the warehouses, no changes here, but now it is us who employ the employees through our subsidiaries, LPP Logistics.
That means that we have total control over the employees and operations, total control over the costs that the activities involve. As you know, we are, owing to this, in a position to lower our costs, among others, because we do not have to pay a margin to an external operator. Additionally, we can optimize costs of our operations in the warehouses, and that means that, again, further savings are guaranteed in terms of our logistic endeavors. An additional element that will be found in Romania, as announced before, is as is a logistic hub for Southern Europe. This partnership, LPP Logistics Romania, will conduct not only warehousing-related operations, but also customs, clearance, transport activities related to transporting our goods that are produced in Asia through the Black Sea to the ports of Romania.
From a Romanian port to the warehouse, again, it is our company partnership that will be responsible for the operations, and again, also for customs clearance, related to the input of the goods produced in Asia. Another element I would like to mention is the application, the mobile application. You know, two are available so far for two of our brands, Reserved and Sinsay. We are working on further ones. I will tell you about that in a moment. What is important is that we roll out our applications to our new countries. Towards the end of the year, the application, both, Reserved and Sinsay, was available in two countries, Poland and Romania, and additionally, Reserved application was also available in Germany. In Q1, both the applications were implemented in three further states: in Czechia, Slovakia, and Hungary.
Now, in June, as we are speaking, the application is also being rolled out to Bulgaria. In further months, we would like to implement it, to implement Sinsay application also in the Croatian market. The rollout is underway, and the applications are important because owing to them, we can reach the marketing message, we can pass it on to our customers more efficiently. Of course, it is far easier also to conduct purchases over the application and pay for the goods. We have observed that when the applications are implemented in a given country, they quickly gain popularity and are eagerly used by consumers. In those markets where we have used the applications for over a year, we can see that half of the online revenue is carried out via mobile applications.
Let us move on to our map now. What you can see here in the table on the left-hand side is that we have over 2,000 stores, which means that over 300 stores were added over a year, 200 of which abroad and over 80 in Poland. Of course, it is the foreign markets that will be those markets in which the company will keep on developing at the fastest pace. When you look at the map, the greatest number of stores is in Poland, it's over 1,000. Other markets, also important for us, very important, looking at the volumes of shops, stores, and also the revenue, is Romania, Czechia, and Ukraine.
The biggest emphasis is being placed now on Southern Europe in terms of development, so Romania, but also Bulgaria, Serbia, former Yugoslavian countries, the two new markets that we opened last year towards the end, so Italy and Greece. We are moving on to financial results. We are now present with our stores, both offline and online ones, in 39 states. Our sales in the first quarter increased by 20% year-to-year. Our sales area increased by 20%. It's not a mistake. These are well-proven numbers, an increase by 20%, both in terms of revenue and in terms of our commercial space. That means that the offline stores have increased. You can see the positive LFLs, an increase by over 5%.
That means that the customers are returning to the offline stores, and that is why this distribution channel keeps on striving. We can see some drop in revenues by 5% in online, but that means that we have limited performance marketing costs, so buying clips externally that I will talk about more in a moment. Moving on to the revenues, PLN 3.6 billion of sales this year, so 20% more year-to-year, and all our brands have noted increases in sales over that period. Of course, the biggest increases were generated in the network that is developing the fastest, that is Sinsay brand, almost 20%, and selling of PLN 1.5 billion over a quarter, constitutes our greatest contributor to the overall sales.
Also Cropp sold really well, where, again, quite a number of new stores were added, and this brand is developing in the offline as well. In terms of Reserved, over 15% of increase, both offline and online. Both female and male collections sold well, but also female collections in particular. The best-selling brand out of our group is the one whose strategy we are going to discuss in a moment. That's MOHITO, where we've got an increase by around 24% year to year, although we haven't added many stores to this brand. All the brands sold well, we are satisfied, and we can see that the collections that we've introduced to the market find recognition among our customers, both male and females ones, and the change in the weather.
Let me remind you that May was still a cold month, but we've noted higher temperatures starting from the beginning of June, and that's conducive to the increases in sales. Now, e-commerce sales, a minor drop year-over-year that results from the limitation of the budgets on e-marketing. How big is this restriction, limitation?
... we spend for performance marketing around PLN 750 million. This is quite a substantial amount, but we have noticed that very often customers attracted this way are random ones, so to speak. This is just a one-time purchasing opportunity; they do not return. These are customers from Western countries that gave it a go, but they are not likely to return. This brand, it means, has to strengthen itself in order to attract the customers back. We decided, given these data, that maybe it makes no point to invest so much in e-marketing, and that is why we cut the investments here by half. From PLN 750 million- PLN 350 million or PLN 400 million is not a tragedy, because that's still a very substantial amount for performance marketing.
We've been introducing our mobile application, and that is why we decided that it is the mobile applications that should be the basic carrier of our marketing policy, pricing policy, and also they should transfer all sorts of sales opportunities, bargains, and so on. Cutting the budgets by half results in only a minor drop in sales, but quite a sharp increase in the profitability of our e-commerce business. In the first quarter, around a quarter of the sales is online, so via e-commerce.
Looking at what kind of tools internet users have been using, we can see that 70% of the total sales are those made via smartphones or mobile devices, and it is the applications that have been present in the market for a longer time that result in the fact that over 50% of the purchases are made using the online mobile applications. In foreign countries, as a source of growth, we can see that about 14% of products are being sold abroad. Looking at the corresponding table at the right, we can see that the growth of floor space abroad is the quickest one, 25% year-over-year, whereas in Poland it's about 14%.
Total increase, it's year-over-year, equals 25%. The biggest sales are effectuated in the countries abroad, with the biggest amount of shops in Romania, Czech Republic, and Ukraine. Let's go to the margin, profit margin. It has remained at the same level as last year, about 50%. It's still under pressure due to collections, which were bought with a higher price, with dollar, stronger dollar last year, where the dollar rate was at the level of PLN 4.42. At the other side, we have the high costs of freight and the increasing share of Sinsay brand, which has a lower profit margin than other brands in our portfolio.
We are trying to manage better our stock. As we can see here in the lower chart, the inventory value is similar year to year, PLN 3.3 billion. The decrease at the level of 5%, this is the KPI which we were talking about. Looking at the following quarters, this factor should be decreasing. Looking at the rotation, that last year was 240 days on stock, was lowered to 164 days, and we can see that there is still room to improve. Our plan for the future to come is at the level of 140-150 days.
The bigger amount of the collection is for the summer to come, and then for the next season. A few words about costs. Starting with the costs of own stores. The costs per one square meters have increased by 4%. It's not a big increase, taking into account the inflation is at the level of more than 15% in the Central Europe region. When we have a look at the three elements at the chart, the renting costs, the staff costs, and other costs, the energy, depreciation, optimization, and materials, year to year, they are stable.
Similar to last year, there was no increase here, only the renting costs, rental costs are higher. They were valorized by the inflation costs at the level of 70%. It was more or less 9%. We need to add that the euro exchange rate was lower than the last year. As we compare the costs from the first quarter of this year to the other quarters of last year, we can see a significant decrease. The staff costs per square meters have decreased as well. Total costs were at the level of PLN 173 in the first quarter.
Looking about outlook for the quarters to come, the level of costs should be maintained at the level of PLN 173-175 in the two following quarters to come. At the bottom, you can see the chart with the total costs per square meters. The e-commerce shops and central costs, the decrease about 10% year-over-year per meter, PLN 305. We should here take into account the changes in the logistics and decreasing the marketing budget as well, which allows us to keep the costs per square meters at quite a low level.
A second factor, which is important, is the factor cost to sales, which we would like to maintain at the level of 40%-41%. In the first quarter, it was 43%, it's still much smaller than last year, where it was 47%. We are maintaining a strict cost discipline in order to improve our rentability. Now, I would like to move to profit and loss account. Top line, the increase is at the level of 20% year-over-year. The brute margin, gross margin, a little bit lower, and the costs increasing by 9%. We can see that the costs are increasing slower, so our operating leverage is growing.
We can see that our profit was twice bigger as last year at the level of PLN 230 million. The exchange rate differences were much better at this year at the level of PLN 111 million. Year-to-year, it was the continuous economic operation, we compare apples to apples. Good results in the first quarter according to our outlook and guidance for this year. We were promising the profit from offline stores. It's increasing whether it's stable year-to-year, we are maintaining the costs discipline, this is our outlook for the quarters to come.
Now, we would like to talk about operating cash flows, our liabilities at one side and working capital at the other side, and trade liabilities. Our liabilities were bigger than stock in the first quarter. Trade liabilities, about PLN 4 billion, were higher than the stock. Still, we have the trade receivables, inventory. The working capitals is plus. We believe that in the next quarters, it should improve. Now, the normalization of working capital is happening to the level which we used to have before the war. Now, minus the turnover cycle was minus 83. Now it's about 11. The cash flows were...
Operating cash flows were very good, about PLN 1 billion 140 million of income, and it was improving. The operating working capital is being normalized, and we are generating profit on it. Net debt. Here we can see the net debt at the level of PLN 4.2 billion. This is a safe factor, which is at the level of 1.5, so we are remaining at the safe levels. If we recount the net debt according to MSR 17, then we would have to take into account the leasing, which was quite important, which was at the level of PLN 3 billion.
PLN billion. At the other side, we have the money located in investments in money funds. If we add this and subtract financial leasing, our debt would be at the level of 0. We can consider the company as not in debt. CapEx, our investments in the first quarter, we invested PLN 270 billion mainly in stores and in infrastructure and IT systems, we invested PLN 50 million as an increase year-over-year. We are happy with the results of the first quarter. We have high dynamics of sales, so we can see that clients are coming back to the offline stores. We are maintaining cost-saving policy, which help us to improve our rentability.
our net profit is increasing, we are managing our significant improvement of operating cash flows, and we are maintaining a safe debt level and increasing profitability.
A few words about the plans. Starting with the outlook on the second quarter. In the second quarter, we can actually see the same trends that we've observed in the first one, so still very good sales in the offline channel. Several % increases in sales. Here, May, owing to the weather conditions, was somewhat worse, but we can see that the sales are increasing, with further weeks being ever better in terms of results. On the online side, we have a stable sales as year, as every year, so these trends, as I said, are continued.
We still are very careful in terms of costs, and we make savings here in our expenditure because the goal, both in the second quarter and over the entire year, is to increase the working revenues and profitability of the entire group. What we also saw in Q2, which is something that we can see we are still in it, is a positive impact of Children's Day and Mother's Day on the revenues, as well as of all the occasions such as weddings, communions. That is something that makes it possible for us to sell those more fashionable lines, particularly in MOHITO and Reserved brands. Right, soon we are going to have the sales season as every year. On the 20th of June, we are opening the sales season that will last until mid-July, the entire July, actually.
That will be standard sales, typical for this time of the year. We're going to sell our summer collections, and we will be entering the sales of the autumn ones. What is also important, ladies and gentlemen, is a piece of information we would like to emphasize. That is the debut of MOHITO stores in Italy. The first two ones we would like to open, MOHITO stores, we would like to open them by the end of the year in Italy. Why Italy? Because we can see that very good sales of MOHITO are typical for the entire region, but they're particularly strong in Southern Europe, Romania, Bulgaria, Croatia, Serbia. The first stores that opened were the online MOHITO stores, both in Italy and Greece. They keep selling really well.
That is why we made a decision to support the online channel with the offline channel. We would like to have the entire omnichannel available in Italy. Let me also remind you that this year we are opening two Reserved stores in Italy, two MOHITO stores in Italy, and around 15 Sinsay stores also in the same country, Italy. We would like to increase the recognizability of our brands by establishing offline stores. To this, we add a mobile application for MOHITO. Given that MOHITO sales constitute one-third in e-commerce, we would like to provide as good a service as possible in this distribution channel.
That is why a decision has been made to introduce the MOHITO application, by the end of the year, we believe that the average value will increase of the products and also the ease of accessibility to our collections will be guaranteed. Now, a few words on the offline stores. Let me remind you that our out of this year, that is not changing, is the plan to open around 300 brands of Sinsay and 100 of other brands, all together, around 400 stores. When we look at this plan and how to what extent it has been implemented, we've got the four months that constitute one-third of the year actually. We can say that after this time, we've implemented a third of our plan in terms of brand stores openings.
The plan is equally distributed across all the quarters of the year, so that this machine building it, the construction, architectural companies also can enjoy a stable situation so that they can plan their schedules and plan the work accordingly. That is why we have, like, one-third or one-fourth of the overall package plans to be opened. After four months now, we have, as you can see, 133 stores opened, most of them of the Sinsay brand. In further quarters, we hope that the pace will be equal. We will operate to schedule. For a longer-term perspective, we sustain the goals for this year. We would like to increase our floor space by 20%.
That means that at the end of this financial year, we would like to have 2 million square meters of floor space. Most of the increase or faster increase will be noted abroad, 25% there, and around 12% more of the floor space opened in Poland. For further two years, we again stick to our goals, so the increase of floor space by 10%-15% in 2024 and 2025. Of course, the greatest increase will be that of the Sinsay brand. Looking at a broader picture, how we perceive our financial strategy for this year, again, we stick to our primary goals and targets.
We believe that the offline channel is going to grow faster than the offline, we can see positive harbingers that will be conducive to supporting the sales, not only in the newly opened stores, but also in the existing ones. The revenue of the group, we believe, will reach PLN 18 billion. That is maybe somewhat more. The gross sales margin, across the all year, should be between 51%-53%. The second half of the year should be significantly stronger in terms of gross sales margin. We should see an increase resulting from three factors. First of all, of course, we can see strong złoty and a weaker dollar. That's always very helpful. On the other hand, we have lower freight costs. They have been normalized already, they returned to the levels from before the pandemic.
The third factor is that the goods that we buy, dollar-wise, is being purchased, cheaper. It is bought cheaper year to year, so 10%-11% is the decrease of the average cost per unit, dollar-wise. To this, we of course, stick to our savings policy, around PLN one and a half billion. Of course, we've talked about cutting the performance marketing cost by half, but also reducing the cost of logistics. The EBIT margin, we would like to exceed 10% this year. We keep investing, we also stick to our CapEx plan, over PLN 1 billion per CapEx, out of which PLN 800 million for stores themselves. Normalization of working capital, obviously, and making sure that we keep a stable balance level, so a very low level of indebtedness, following IFRS 16.
Of course, there are some opportunities and risks. What do we perceive as opportunities? Well, meeting the tastes of our customers in terms of the collections. We can see that MOHITO and Reserved collections are ever better. They sell well, and we're also expecting the improvement of Sinsay collection and the return of the customers, or increasing purchasing power of the customers in the value for money brands. We can see that, as mentioned a quarter ago, there is a certain stratification here. The inflation, observed not only in Poland but also in other countries, shows that, well, the inflation has greater impact on the value for money sector.
Those who used to purchase more expensive brands keep on doing that, but those value for money ones need to fight for every złoty or any other currency in the pockets of our customers. That's inflation concerning food products or the power market. We roll out the mobile applications, both Reserved and MOHITO. Additionally, MOHITO is the additional one; Sinsay and Reserved has been being rolled. We also want to maintain our cost discipline. What do we have on the side of the risks? We have been observing the economic slowdown impacting the shopping behavior of our customers. Again, we've got the inflation burden, which means that our customers need to pay more for the foodstuffs and to pay their bills, so they do not have that much for purchasing clothes.
We believe that the inflation is going to be on the decrease in the second half of the year, whilst the minimum sales salaries are going to increase, which means that we can expect the increases in sales. We can also see that there is a growing competition in the value for money segment. This is about the only segment that keeps on developing strongly in the clothing industry. A certain risk is limited expenditures in performance marketing, but as mentioned earlier, we can see positive sides of it. Mostly, we see that by the fact that the sales are not much lower, but on the other hand, the profitability of the business is increasing clearly. At the end, two slides about the dividend.
As what we were saying before, a quarter ago, we maintain our proposal, which will be discussed at the next shareholders meeting. The dividend is 430 PLN per share in two tranches. The first one will be paid in July, the second one in October this year. One hundred profit is-
... meant for dividend, and some capital as well. I would like to remind that during pandemic, we created an extra capital, which we wanted to use as buyback. When the courses dropped, we didn't use even one złoty from this stock. We didn't buy one share. Looking at the shares today, we think we won't need this capital, so we decided to return this capital special to move it to usual capital to stronger our equity, and part of it we will use as dividend this year.
The dividend politics for the years to come, we would like to divide our revenues with our shareholders every year in a certain framework. We would like to use about more than 50% of the profitability, but not more than 70%, so that we could keep 30% of the profitability as a capital in the company to keep safe. We would like to be paying dividend in two tranche: first, in spring, in May, and the other one in the autumn, in October, November, as we are doing it now. We focus on dividend, and we cancel the share buyback scheme for the years 2025. It will be voted during the next shareholders meeting.
This is all from my side. Thank you very much for your attention. I welcome you to ask questions. The first question: what are the plans of the group for shares issuing? Now we are moving in time our decision if we are going to issue bonds or not, and looking at the results, financial results and at our cash flow, it seems that we do not need the means from the bonds issues, so we moved the decision to the fourth quarter, which means that this year we will not issue bonds. The second question: in financial report, you noted the growth of offline.
Can you say what's the dynamics among the brands and what brands bring you the most revenue? Here we have the continuation of the trends from the first quarter. The best-selling is the MOHITO, Reserved, and other our brands. Taking into account the weather and its effect, we can see that the sales are improving. How is the group going to control the operating costs in the quarters to come and logistics costs? What kind of savings we can talk about? Is the cost control we always take care of it. Maybe now we focus on it a bit more. Now we started to improve costs starting from the fourth quarter.
We are saving on marketing budget, performance marketing, because we've got mobile apps. We are saving on logistics. We are taking over foreign abroad centers. We created logistics Romania and Slovakia, which reduces our logistics costs, and we are saving in our offline stores as well. We are trying to save at every level. The savings are about one and a half billion złoty, PLN 350 million-PLN 400 million on performance marketing and PLN 150 at the logistics, plus the savings in our headquarters and the offline stores. The group wants to develop, to grow the mobile app. When MOHITO will introduce its app? We hope that it will be the autumn this year. Now, MOHITO.
When is MOHITO going to introduce, to appear on the market in Poland, and what, apart from Italy, which countries are taking into account for the development of MOHITO? We are opening two MOHITO stores at the end of the year in the Q4. We haven't got plans for the next openings. We would like to take care of these openings and see how they perform. We haven't got any specific plans regarding the future to come. We will inform you as soon as possible. Which brands are identified as competition in the value for money segment? Sinsay is one of them.
It's the brand which is moving to retail parks, to smaller cities, to street locations. It's being developed not only in Poland, but abroad as well. Its competition is Pepco, KiK, TEDi. There are a few of these brands, and because they are moving fast, all these brands can grow quickly. Looking at the horizon of a few years now, it seems that it's the best moment now to conquer these locations, because soon it may be difficult to enter a retail park with a developed position. We think that in the forecast of three, four years, we have a chance to grow.
In this quarter, you've shown a huge reduction of costs in quarters per square meter from PLN 131 to PLN 214 in the second quarter of last year. A few years ago, the costs reached about PLN 100 per meter. What is the cost-cutting level, and at what level the costs will be stabilized in the years to come? The costs at the level of PLN 120, PLN 130 per meter are not only the costs of headquarters, but other departments, commercializations, for example. This is how we see it. This year, these costs will be stabilized at this level, which will quarters to come bring? It's hard to say.
use of the inflation costs. We think that the growth will be stabilized, will be slow, and will not be growing as fast as sales. Next on costs, what are the tendencies in the own stores? I understand that the optimization is being done now, and in the first quarter, the saving was PLN 173 per meter. What will happen in the second half of the year? We do not wait long. When we cut costs, we are doing it in one quarter, so the level which we have now will be maintained, and this is our target level. In the quarters to come, we will try to maintain this level.
Given into account the increase of minimum salary, probably the cost will be increasing in the second half of the year, but I do not expect them to reach the level from last year. We hope to maintain the costs at the low level. What is the demand on the foreign market, British and Germany, and Romania? Maybe I will start with Germany. E-commerce is selling good, offline good as well. Rentability has been increasing. We have 17 shops there. We are looking at the perspectives of further growth, but we hope rather to add one or two stores. We concentrate on online sales.
Our brands are being known due to offline stores, and we are aiming at growing sales, online sales in these places. Great Britain. This year, we plan opening of three stores with lower rental costs. These shops will be profitable. Looking at the British market, it's a big competition, but it's a very big market, so when we open the offline stores, we will try to increase online sales as well. We need a bigger scale in order to increase online sales as well, but we are very optimistic. Market in Romania, the biggest market apart from Poland, we would like, in the forecast of three years, have about 200 shops, 200 stores-250 stores.
We can see a big potential. I can say that today we are the player number three, so we are quite visible on this market, and we are moving towards the biggest companies, clothing companies in Romania. I hope that we will get to the rank second or first in the perspective of three years. It's the biggest market after Poland, and we are very well received. We are creating a logistic hubs there.
What's the risk of write-off of receivables? We are talking about first quarter, where the part of receivables were coming from Russian companies, partly from Egypt, and partly of receivables sent to other companies. I think that the risk is quite slow. Maybe the write-off will be at the level of a few PLN million. If a invoice is overdue, we are creating reserves. I don't think that the risk is quite considerable. A rollout of app of Sinsay to Croatia and Bulgaria. You plan to create mobile apps till the end of 2024. Will it happen? Yes. The mobile app of Sinsay in Bulgaria has started.
In Croatia, it will be open in Q4 this year. Certainly, there will be plans of introducing them in other countries, but now we have stopped for a while in order to introduce the MOHITO app on the market. I hope that in the next quarter, new apps will be rolled out.
Saying the annual guidance, what is the volume of sales improving like? What is the assumption for the second half of 2023? Do you have a greater comfort of reaching operational profitability over 10% this year? How much of over PLN 500 million of the savings expected this year, supported by the results of the first quarter? Quite a complicated question. I can repeat it if need be. I think I can handle that.
Okay, let's start from the end. What part of the savings were those made in the first quarter? I'd say that out of the PLN 500 million of savings, 150 were already noted in Q1, but we also have quite a lot to save in the second and third quarter of this year. The beginning of the question concerned to what extent improvement of the gross margin of sales is something to expect in Q2, and to what extent do you expect it to be attributed to the second half of the year? Well, as for the gross margin, you know that the second quarter is mostly the sales one, so we are about to open the sales season. I think that the rebouncing of the margin is something that we would expect in Q3, Q4.
That is when we expect the increase in the margins, but that does not mean that the situation is going to be dire before that. Particularly, we are focusing on the EBIT margin. We've got Sinsay that has this first margin lower, but then when you look at EBIT and the increase in the value of increases, we believe that every consecutive quarter is going to be better and marked with other great increases. The goal of a minimum 10% of EBIT will be met, and every new quarter should be better than the previous one. Another question concerning the MOHITO application, to which markets are you going to introduce it? Where do you want to roll it out?
The first market will be our domestic market, that is Poland, and then looking through the criteria of how big a market is, then Romania, Slovakia, Czechia, Hungary, but we of course, believe that one of the first markets to roll this application into is going to be Italy. Sinsay, I noted a negative like-for-like in the first quarter, could you diagnose this weakness against Reserved and the other brands? What corrective measures are supposed to be introduced? We have the image of negative likes in the second quarter, so around 20% of increase in the floor space. Generally, the situation is cooler than in the Vinted. How is the like-for-like sales expected to develop in Sinsay in Q2?
The second quarter is actually the continuation of Q1. Let me repeat that what sells good is sell MOHITO and Reserved, the more expensive brands. MOHITO is somewhat cheaper. It still has a lot of products from previous collections, purchased for this frantic development plan for the previous year. Actually, there is still a lot of goods in stocks and former collections that we sell now at a lower price. On the other hand, you might remember that we've planned and implemented an increase that was not accepted by Sinsay customers. We stepped back, now the prices are similar to those from a year ago. There is a certain pressure on the margins. That also means that we have slightly negative like-for-likes in Sinsay.
I remember the situation is improving, so I hope the second half will be significantly better. We'll have new collections at good prices, so I believe that the situation is likely to improve in Sinsay considerably. The second one is about working capital. What should this capital look like towards the end of the year in terms of our liabilities versus our inventories? We should look back to think about over 200 days for our liabilities, and again, the inventory should be at the level of 100-150 days, so we're going to have a negative working capital. We believe that by the end of the year, we will generate cash out of our working capital, the way it used to be in 2021. Another question concerns the improvement of gross margin.
Is there a chance to improve the margin to the level of 50%-58% from 2022? A difficult question. To 58%, I don't think that there is a chance because we have Sinsay that does not sell within this kind of margin, and there is more of Sinsay in our product mix, therefore, this margin is going to be diluted. You keep on looking at our margins, probably, maybe we'll go to 55%, but that will be an ambitious task. We are looking very much on the EBIT margin, because if the first margin in Sinsay is around 50% or below that, then in time, this upper part, the total one of the group, will be diluted. Sinsay has significantly lower operating costs.
That is why, having those two business models in our portfolio, so value for money and, those more expensive brands like Reserved and MOHITO, we are looking at the EBIT brand that should be higher than 10%. Now, the question concerning our guidance for sales, isn't it too conservative? If I were to give you a guidance that was to be very aggressive, and in this economic situation, I would be slightly afraid to do so. We prefer to be on the safe side and give a slightly conservative sales guidance. On the other hand, I do not like to offer such guidance like PLN 18.5 billion. I prefer to round it, let's stick to PLN 18 billion with a potential upside in the second half of the year. That was the last question.
Thank you very much for all the questions. We are prior to the period of vacations, we would like to wish you a fruitful, relaxing vacation time. We invite you to the conference that is going to be held in September. Thank you very much. Goodbye.