Arezzo Industria e Comercio SA

BOVESPA:ARZZ3

Earnings Call Transcript 2018-Q3

[Operator]

Good morning, ladies and gentlemen. Thank you for waiting, and welcome to the Arezzo&Co conference call where the results for the third quarter of 2018 will be presented. [Operator Instructions]

This call will be translated into English, and overseas participants will be able to ask questions.

[Operator Instructions] We would like to remind all journalists and others from the press that this conference call is exclusively for professionals from the financial market and current and potential shareholders. Any questions must be submitted to our press relation, Caroline Muzzi, whose contact information is available on the company website at www.arezzoco.com.br

This conference call and the slides are being streamed on the web and can also be seen on the company website. In case any of you do not have a copy of the Arezzo&Co press release published yesterday, Wednesday, October 31, you can get a copy from the company website.

This conference call is being recorded, and the recording is available on the website after the call is over.

Before we proceed, we would like to clarify that any statements made during this call regarding the company's business prospects as well as projections, operational and financial goals concerning its potential for growth are forecasts based on the expectations of the management for the future of Arezzo&Co. These expectations are highly dependent on domestic market conditions and the general economic performance of Brazil and international markets and are therefore subject to change.

Now I would like to hand over to Mr. Alexandre Birman. Mr. Birman, you may begin.

[Alexandre Birman, executive]

Good morning, everyone. It's always a pleasure to be able to interact with all of you. Thank you for participating in our 3Q '18 earnings conference call. I have with me Rafael Sachete, CFO; and Aline Penna, the IR Officer.

To give you the context of what I will talk about, I'll mention the topics that I will address during my opening remarks, a more encompassing landscape about the third quarter. I'm going to talk about our main pillar, which are brands, and what they did this quarter. I'll give you some flavor about how we've advanced in the strategic planning. And after that, I will make more encompassing remarks about our business. And then handing over to Rafael Sachete, who will give you more flavor about our results.

So the third quarter, in July, we had the winter collection [ landing ] and the resort collection coming in. So August, we have the full summer collection. In general, we had good results this quarter, and we're very satisfied with our performance. It's worth noting, the strength of our more extensive strategy, which is to be a platform of brand and literally a multi-brand company with relevant brands that don't -- not just depending on 1 or 2 brands, and also a multi-channel company. Our channels add on to each other. And in the ideal world, we should grow every quarter all the brands, all channels, but at least the minimum objective is the consolidated growth of Arezzo&Co, which we have presented in a very consistent manner. The third pillar of our strategy, which is already starting to support our growth, is to be a multi-market company as well. So our operations in the North American market start to have an interesting contribution to our revenue share.

The summer collections start in August. It always takes place in the beginning of August, and this year, it took place on July 31. And we noticed that we had an opportunity to change that date, moving the summer collection start to mid-August, because, on average, in the south and southeast, people are coming back from winter vacation, the temperatures are still a little low. And the results also show efficiency and agility in replenishing our network, where we want to balance out our inventory, and that's demonstrated by the coefficient of same-store sales sell-out and sell-in, especially based on the last 12 months.

Now we'll talk more about our brands. The Arezzo brand has continuously created a very deep connection with our consumers. The brand is based on hereditary, legacy, it's passed on from generation to generation, where we created a concept that we will expand even more in '19, which is, together, we are stronger. [Foreign Language] So that strong appeal of the brand has helped in the appreciation that it received from its consumers. And the other highlight is the 360 strategy for product activation. So we've learned that in addition to the collection, it's very important for you to have icon products. And therefore, you give that product a name and visual merchandising that's completely different training for the sales team, very motivational. So activating and communication, especially in digital, which is very extensive, was the highlight for our icon, ZZ Astral, which is customized according to your birth sign or -- and -- which was the Fiever, and also the espadrille model with a lace-up on the -- around the ankle called Alice.

So we've also been working on the data information from our consumers. You probably know our project, Valorizza, which we have to mention has a double Z. We have hundreds of millions of -- of thousands activations on a monthly basis, and we've seen that the activations with loyal customers has been working well and also with customers that haven't bought for a while. So that shows the quantification of the isolated positioning that this brand has compared to the competition, where it's a brand that has an amazing market share.

Regarding Schutz, we are strongly focused on the international growth, and it's shown excellent results. We've strengthened the brand being with the BECAUSE SCHUTZ theme, that shows a dichotomy of freedom of expression. And in the summer collection, we have a topic that we called WE SAY YOU CAN DO BOTH. So there's a strong trend in the more casual sneakers, but there's also the women that love high heels. And even women that buy sneakers, they always have high heels. So that's what we were working strongly on, high heels and sneakers. This brand has a strong digital adherence, over 3% of revenues coming from e-commerce. And we've had continuous growing in the projects that we launched at the end of last year called [ Schutz Sole ]. We already have 15 renovated stores with a digital concept.

Anacapri has been consolidated as a brand in the Brazilian market. It achieved maturity in many pillars that's important for sustainability, which is -- are its products, obviously. Distribution and a clear branding proposal, having a team that manages the brand with [indiscernible] to that purpose. It's worth mentioning the share that this sneakers category has in the Anacapri brand, exceeding 40%, highlight to some icons which have their own names, the Bia, Duda and New Ana sneakers, that together account for over 200,000 pairs. It's also worth noting our capacity with an agile replenishment cycle, especially for the continuous sale items that account for over 40% together in all the brand sales.

Now about Alexandre Birman's brand, which has had especially high results in Brazil. The Iguatemi store -- same-store sales for October reached almost 40%, selling almost BRL 800,000 in 30 square meters. That's mainly a result of reverse branding effect. So all the investment and strength that this brand has been gaining abroad is reverberating in the domestic market, as well as the international growth is a huge focus of ours.

We already have a good presence in the North American market, with an opening of our store at the Bal Harbour Miami mall store. And in this quarter, we have started a small operation in the European market, inaugurating our showroom in Milan in September.

Other startup brands now are our Fiever brand, which is showing to be very assertive in the cool concept, urban concept, having its product platform anchored in -- on casual sneakers. We've inaugurated the fifth store of the brand at Higienópolis Mall. We've had a lot of actions to strengthen branding. So in terms of online share versus total brand share, Fiever is having 30% of its sale coming from online sales. So that has shown a lot of desire to consume the brand. And we have the online -- the brand online multi-brand channels in our own stores. And our brand is now 5 months into operation in [Audio Gap] only in October, focused on women 35 years and over, AB1 class, who are looking for a product that's maybe based on comfort with design. So we've seen a growing demand for this type of product. So many actions that are customized to strengthen branding such as the summer launch in a pottery studio, offering this for opinion makers, where they can make their own potteries, focusing on wellness. And we opened the second store in the Higienópolis shopping, placing Fiever and OWME in the brands that are looking forward into the future, bringing results to our company.

Now about strategic planning. I would like to highlight a few points. First is our digital transformation. We have a leader with a lot of experience, although he's very young, that implemented our web commerce a few years ago, and now we're on a continuous evolution process. We are with a BI process. We're implementing a new strong tool that will have a structure in our store and will provide agility for the whole team, with online data availability to help us make decisions. We're implementing a new system to cut flow in our stores. And our tool on those stores that have e-commerce sales is very effective, especially -- so you can have only 1 cart to check out on your online shopping. We are also doing a benchmarking with [ Clear ], which has been relevant in this digital transformation. So it's a very important topic, and the results have been coming.

I would like to also highlight, if you remember our Arezzo Day 2017, we had our summer projects, and one of them was the new concept, expand the Arezzo brand to small cities that we called Arezzo Light Project. So we are 100% aligned with our planned strategy from last year. We opened 19 stores, and we will go from 30 stores -- more than 20 stores from the next month. And this really shows that we have a path to consolidate the brand, reaching an even higher number of cities with our mono brand experience.

I also highlight the main pillars of our long-term growth, operation of becoming a multi-market brand focused on the U.S. We are growing strongly in our revenues there, with continuous growth, strong investment and structuring, especially people, systems and branding. We will also open between Saturday, the day after tomorrow, and Thursday 2 stores simultaneously, almost in the city of Miami, in the largest malls, Schutz at Aventura Mall and Alexandre Birman in the Bal Harbour Mall. Our work with the main department stores have brought strong results, especially with Nordstrom, and we're sure that we are investing in future growth, which already shows strong growth of revenue. And this leverage will be based on our investments that I mentioned.

To conclude this first part, I would like to highlight the strong capacity of growth. This is fruit of our passion and that willingness to make it happen. And this also was highlighting the culture project that we did. We did a snapshot that highlights the passion and the willingness to make things happen. And within this context, we've been having great results, with solid growth, with the rhythm that we need for our revenues and also to make it feasible. We decided to invest, which will boost the continuous growth in the future. In most cases, you can see our -- they will show in our -- as expected, our track record with great results. These have been a real driver to boost growth, which makes us confident that we're on the right path.

Continuing with our presentation, I would like to ask our CFO, Rafael Sachete, for his part, and we will be open for questions later. Thank you very much.

[Rafael Sachete, executive]

Thank you, Alexandre. Good morning. Continuing with our presentation, we will now go to Page 4. On the left side of the chart, we can see that the gross revenue of the company was BRL 498 million in 3Q '18, with a 6.6% growth in domestic market and 39.4% in the external market. And our operations in the U.S. grew 49.7% in the quarter.

On the next page, we show the opening of the gross revenue on the domestic market, with highlights to Anacapri, that grew 45.8% in the quarter. The brand contributed with 13.6% of the revenue in the domestic market compared to 10% last year.

On the franchise channel, we obtained strong growth of 48%, and the performance in the channel is due to opening 40 stores in the past 12 months. In addition to our own growth in the same-store sales, that continues to be high, even with the comparison base that is very challenging. It's also worth mentioning that the increase of the penetration of the multi-brand channel obtained strong growth in the quarter. Arezzo achieved revenue of BRL 245.4 million, an increase of 3.1% year-over-year, representing 55.3% of the domestic revenue at Arezzo&Co.

Schutz kept its revenue level similar to 3Q '17, with a global revenue of BRL 150 million, representing 30.3% of the consolidated revenue of the company. In the domestic market, the brand revenue totaled BRL 118.1 million, a retraction of 6.2% year-over-year. In the foreign market, the Schutz revenue grew 33.7% year-over-year in Brazilian real.

Alexandre Birman brand grew 29.5% in the quarter, also in global terms, with highlight in the strong increase of same-store sales in Brazil, where we have 4 owned stores, and the growing performance of sales overseas, both in the U.S. as well as European countries.

Fiever is still consolidating itself as a sneakers brand, showing a 66.3% growth and strong performance in all channels, owned stores, multi-brand and web commerce.

Now going to Page 6. This is a view of the gross revenue per sales channel. We highlight the performance of web commerce, which grew 23.3% in the period as well as multi-brand and franchise channels, which grew 7.2% and 4.6%, respectively.

In terms of sell-out, our mono brand store network that includes franchise, owned stores and web commerce shows a 7% growth in sales, especially due to the strong growth of online and the net opening of 70 franchise and 3 owned stores in the past 12 months, in addition, to sell in the same stores that grew 1.6% in 3Q '18.

The company's revenue coming from mono brand stores represented by sell-in of franchise and sell-out of owned stores and web commerce showed a 6.4% increase in the third Q '18 year-over-year. As we always say, the analysis of the sell-out and sell-in indicators should also be done -- take into account the longer period, which eliminates seasonal effects that reflect the dynamic of launching our collections. The accrued figures for the past 12 months, Arezzo&Co presented 2.5% same-store sell-in and 4.8% same-store sales sell-out, meaning a 2.3 percentage point difference. Multi-brand channel, in turn, grew 7.2%, reflects a combination of several factors, by acquiring new customers and continued effort to greater cross-sell between brands at the same point-of-sale.

On Page 7, we have an increase on the number of same stores and franchises as well as store area. We closed the quarter with 649 stores, being 640 in Brazil and 9 overseas, an increase of sales area of 8% and 73 net openings in the past 12 months. This quarter, we opened 16 stores: 7 Arezzo, 5 in the Light format, 5 Anacapri stores, 2 Schutz stores, 1 OWME store and 1 Fiever store.

Now going to Page 8. We presented on the left side the gross income in the quarter that reached BRL 190.6 million, a 12.3% increase year-over-year, and gross margin of 46.5%. The expansion of 70 basis points on gross margin in this quarter is explained by these following effects: increase of gross margin in the sell-out channels, owned stores and web commerce, and sell-in, franchise and multi-brand, due to the ICMS exclusion from the calculation base for PIS/Cofins; higher share of web commerce and operations of the U.S. in the mix.

Still on this page on the left side, we have EBITDA performance, which reached BRL 70.7 million in the quarter, 8.1% growth, and 17.2% margin, 40 basis points below year-over-year. Increase in expenses seen in the period comes from the decisions on our strategic planning that includes developing the North American operations as well as other fronts, among them, related to expanding Alexandre Birman brand in Europe, developing OWME brand and some corporate fronts such as our CRM department and sustainability initiatives.

On Page 9, we can see that the net income for the quarter achieved BRL 40.2 million, 6.6% higher year-over-year. Excluding the noncash effect, the net income of Arezzo&Co would have achieved BRL 44.4 million, meaning 17.9% higher year-over-year. The net income was negatively impacted by worse financial results resulting from a higher exchange variation entertained in the period, without a cash effect in company's results; by financial expenses increase relating to higher indebtedness year-over-year; and a lower financial revenue based on the reduction of the Selic rate in the past 12 months.

Now moving on to Page 10. We present the cash -- operating cash generation for the company. In the quarter, it was BRL 38.5 million. It's worth mentioning that company paid interest on capital in -- for the first half of 2018, on July 25, 2018, in the amount of BRL 21 million.

On Page 11, on the left, we can see that CapEx for the quarter was BRL 13.7 million, with the highlights: investments in Brazil with the new Arezzo&Co headquarters in São Paulo; investments in technology in the new Alexandre Birman brand; and renovation of the new stores for Schutz with -- based on the new Digital Store concept; building an owned plant for tenants and comfort -- sneakers and comfort shoes; and the Fiever store in Pátio Higienópolis Shopping. In the North American market, we developed a new international web commerce for Alexandre Birman and invested in branding for the Schutz brand. On the right side of the page, we have indebtedness. We closed the quarter with a net cash of BRL 111.3 million and net debt over EBITDA of less than 0.5x.

Lastly, on Page 12, our ROIC was 32.6%. That means 870 bps over year over -- greater than year-over-year, mainly explained by an expansive growth of 42.5% to our NOPAT, which also includes the recent inclusion of collection of income tax, CSLL over the tax benefit.

Those were our comments for the results for 3Q '18. I'd like to open for a Q&A session. We're open for questions.

[Operator]

[Operator Instructions] Our first question is from Luiz Felipe Guanais from BTG Pactual.

[Luiz Guanais, analyst]

My question is about sell-in. And I understand that you suffered loss in Q -- in 2Q because of the truck drivers' strike compared to the rest of retail or the average and not just stuck up in franchisees for Q3. So now for the fourth quarter, what are the expectations? What are the market expectations? What can we expect from Arezzo regarding sell-in? And can we expect levels going back to 1Q '18?

[Alexandre Birman, executive]

Luiz Felipe, this is Alexandre speaking. Your comments make a lot of sense. So to give you a more objective response about our expectations for 4Q, we will, yes, resume figures closer to 1Q, talking about low single digits to remain in line with same-store sales sell-in and sell-out, within high single digits.

[Operator]

Our next question is from Richard Cathcart from Bradesco.

[Richard Cathcart, analyst]

Alexandre, I'd like to know about the campaigns that you did with Schutz in the U.S., BECAUSE SCHUTZ and We DO BOTH. And correct me if I'm wrong, but I think it's the first time that you're having such a big campaign in the U.S. So I'd like to know about the reaction that you've seen not only on the consumer side but also your partner's side in the U.S. and how that's been helping you, and with Nordstrom as well, so if you're putting it into more department stores -- the brand into more department stores now and also driven by your own channels.

[Alexandre Birman, executive]

Richard, thank you for your question. This is Alexandre speaking. The investment has been very strategic. Even though it's generating a lot of buzz, it's not as expressive in terms of financial investments, but the results are very positive. So the first thing that we see in an almost automatic way is the growth of online sales for the Schutz brand in the U.S. market exceeding 200% growth, reaching levels -- interesting levels of revenues in a channel that is already profitable in the North American -- in the American market. Next is the strong growth with our partners, especially with Nordstrom. I just received a picture from Nordstrom at the Northpark Mall in Dallas, a picture of the brand. So it's amazing how big our table is, with over 40 items. All of them are very nice and up-to-date with the trend in the U.S. market, and boots is the highlight for Schutz. That was -- that's something new. We had some trouble in that category, but now -- and that's much different than Brazil. We already have highlights of this product. So it's a number of factors. And without a doubt, our investment in branding, especially in digital, has brought in results. You'll see the 4Q results with results that are probably higher than 2 digits, so 3-digit growth in the U.S. market. Thank you for your question.

[Richard Cathcart, analyst]

I have a follow-up about your last comment about the growth that you're expecting in 4Q in the U.S. I'd like to understand what's going to drive that growth. Are they -- would it be specific campaigns with department stores or more department stores? Could you give me more flavor on that, about how you're going to drive the growth in 4Q?

[Alexandre Birman, executive]

Great. Without a doubt, based on the volume that we're going to present, the major size is department stores, where you have more scalability. Our share of wallet is still small. Nordstrom alone has an annual revenues in shoewear over $3 billion. So if we can grab 5% of that business, imagine how much that would be. So we're going to have more results based on volume, which will drive a very strong percentage, as I mentioned, in revenue. In department stores, but also mono brand stores, they really help in branding. So as I mentioned, and being more specific, we're going to inaugurate a Schutz store in the Aventura Mall. It's an exceptional point of sale, and that will boost our sale in the same brand -- mall, because it will make our brand stronger. Imagine that we're going to have a mono brand in the Aventura Mall and strong presence in 2 department stores. On Thursday, we're inaugurating at Bal Harbour, and then we're going to have a gigantic one in Saks Avenue. So we're -- at Saks Avenue. So we're boosting that in online growth. And the strong growth in department store is still low, but it has a very strong potential to grow in the mid- and long-term.

[Operator]

Our next question, from Marco Calvi, Itaú BBA.

[Marco Calvi, analyst]

My question is about the gross margin. There were some factors, most of them with a positive effect on the company, but there was one with a negative effect in -- drop in gross margin on owned stores because of a higher sales period. Can we have a flavor of how much this negative effect was on the gross margin? And also, about the increase in inventory that we see year-over-year, I would like to understand if inventory has to do with change in the strategy in the U.S. and if it's -- this inventory is more positioned for that operation specifically.

[Rafael Sachete, executive]

Thank you. First, your first question about our gross margin. You can see we have an expansion in our gross margin. This expansion is supported especially by a mix of channels. So we have a growing revenue in web commerce. And the U.S. operations, with gross margins that are a bit higher, this supports greatly. And we also had a smaller effect and a negative adjustment in owned stores, but it wasn't substantial. It's not recurring. We don't have that perspective. And also, the PIS/Cofins collection are not on the same base as the previous year, which also helps in our accounting. You also asked about working capital and inventory. Your reading is perfect about it, your understanding. We have an impact because of some channels that grow more than others compared to the company's gross revenue, especially web commerce and U.S. operation. And they have an inventory profile that is a bit higher than our sell-in and multi-brands channel. But it's not just that. We also have a seasonality period in which this company decided to create some inventory, most of them of projects that continue, with a low risk of markdown and sales, which should be sold in the fourth quarter. So our outlook for the fourth quarter is a figure more aligned with what we had last year in the fourth quarter because of this change in the revenue profile.

[Alexandre Birman, executive]

Thank you. This is Alexandre, Marco. Just to give you more flavor about what Sachete just said. Although we're going to balance our fourth quarter, in our strategy, we want to grow more and more with an open grade in the stores. And the company needs to have a higher inventory level to be able to distribute it. This shows -- this is very strong at Anacapri. 40% of our sales are the continued items with an open grade. At Arezzo, it's more than 50%, and we really want to grow this number. So it's a continuous process. As I said, we also look at our -- the consolidated figures of our business, because it's a multi-channel and it gives us the capacity of increasing gross margin as a company, and that's our main goal. And about working capital, our goal is to have a strong cash generation, but our strategy is to migrate for supply in an open grade.

[Operator]

Our next question, from Ruben Couto, Santander.

[Ruben Couto, analyst]

I would like to go back on Schutz, focusing on the performance in Brazil. Can you give us more information about the 6% drop in sales year-over-year? And also the contribution of e-commerce, what is the drop in sales for that brand? Can you tell us about that as well?

[Alexandre Birman, executive]

Ruben, it's a pleasure to answer your question. It's Alexandre speaking. Schutz, you know that I had the opportunity of opening that brand 18 years ago, so it goes much beyond something that really drives revenue in our business. It's something very dear to me, and more than half of my 42 years, we're running Schutz brand. And I'm really proud of Schutz. It has a different show, with a very high recall with our customers. 2 years ago, it was the first strong investment in the go-to-market that we did after the IPO. We hired a first-line consulting firm, and we really worked on the brand, which tripled revenue in the 4-year period. So about Brazil, the marketing is very strong in the premium segment for prices. It grew a lot with handbags in 2016, which drove its growth. It already accounts for 20% of the revenue. We're not happy with the negative result. We don't think that's what we should achieve. And we can see continuous improvement in distribution, brand awareness, and we're investing for that to happen. So the outlook for 2019 is to stabilize the brand in terms of sales volume. About e-commerce, it already corresponds to 22% of the mono brand. And e-commerce has a share of about 1/4. And in the multi-brand channel, the share is 3%. I'm sorry. I was hearing you -- if you will have anything else to add?

[Ruben Couto, analyst]

Just specifically, there was a worsening in the first quarter. Was there anything specific in the fourth quarter that was corrected with any model of the stores or any agreement with the franchisees, something that made this performance be an outlier?

[Alexandre Birman, executive]

There is no specific cause or something that -- specific events. One interesting, if you think, we're in a moment of going from owned stores to franchise. When you have investors willing to buy operations in their owned stores, we passed on 3 of the stores in Belo Horizonte and 2 in Brasília. And when we showed the consolidated results, there was a decrease, but it doesn't mean that there was a decrease in brand. We're going from something that was sell-out to something that is sell-in. So it almost doubled the revenues. So it's interesting to think that there are franchisees investing and buying Schutz stores. There is a potential. Other retailers have franchise that are going in the opposite direction. The franchisees don't want the operations anymore. So this really gives us some idea that Schutz has a very strong vitality. So we're going to continue to have results close to the one that we showed in the third quarter in the short term, but we're sure that in the mid-term, in 2019, we will resume growth. And our focus is not having a strong growth in the brand in Brazil. It has a high share of wallet. We want to go back to a positive level, focusing on shoes and handbags. And a great focus on the brand growth, we'll draw more attention to, is the international growth. The brand already shows positive revenue that we include the operations in the U.S., and this will continue. If we're talking about 2020, 2021 and 2022, there is already a large space in the market. It already has 50% of the premium market. So a strong growth in the long term, you will see 2 digits growth in the foreign market.

[Ruben Couto, analyst]

Okay. Alexandre, that's very clear. About e-commerce, can you tell me how much e-commerce represents for each brand? You said 13% in Schutz?

[Alexandre Birman, executive]

In Arezzo, it's about 9% of the consolidated results.

[Operator]

Our next question is from Alana Imaizumi from Citibank.

[Alana Imaizumi, analyst]

I have 2 questions still relating to Schutz. First of all, I'd like to understand in the multi-brand channel if there were any changes. Or what's the overview for the multi-brand channel for Schutz? And my second question is about the U.S. Do you have any defined expansion plans for 2019? Those are my 2 questions.

[Alexandre Birman, executive]

Alana, thank you for your questions. This is Alexandre speaking. So in relation to multi-brand, Schutz accounts for 50% of Arezzo&Co revenues in the multi-brand channel. So that shows that there's a lot of capillarity in that brand exceeding 1,000 points of sale in Brazil. So we've maintained a strong story in the relationship of Schutz and the multi-brand channel and for its distribution. So -- and so the market already has very high penetration. The multi-brand channel will grow with our new brands, our start-up brands that still have low revenues, where they still have an ability to have a high share of wallet. And our -- it's our most consolidated brand in terms of recent growth, which is Anacapri, with the capacity to have more points of sale than Schutz, and that's in relation to multi-brand channels. In relation to the U.S., we have some 5 to 8 stores that are already defined, but it's worth mentioning that the growth strategy for the brand is multi-channel. So we have a strong growth in e-commerce, where we will continue to invest in modernizing our platform, especially investing to create more awareness and, consequently, more sales in e-commerce, because it's our own operation, it's all ours, from systems to the logistics and customer service. So we're going to migrate to a very qualified logistic partner as from January 2019 and the department store growth as well. So in terms of number of stores, that's the only type of -- not the only type of growth that the brand will have. We'll have a multi-brand channel growth for that brand. Thank you for your question, Alana

[Operator]

Since we have no further questions, I'd like to hand over to Mr. Birman for his final remarks.

[Alexandre Birman, executive]

Thank you, everyone, for participating. We are very happy. It's an honor to have all these analysts following us. That's such an extensive and external view of our business. It really helps us to see continuous opportunities and evolution. I'd like to reiterate and thank our team for all their passion and development that they put into their day-to-day at Arezzo&Co as a pillar in their lives. A very important moment to prepare for the end-of-year event. Our company, Arezzo, Anacapri, given their target price, are actually the icons in gifts. So we want to see our stores packed with our product. Therefore, we have a number of investments.

On November 15, we're going to have the National Sales Convention. The stores will only open in the afternoon. Thousands of salespeople that will be involved with a lot of engagement. So we'll launch high summer as from Tuesday, It's just a very important moment for our business. And for those who are in Miami, it will be a pleasure to have you. Some investors have already confirmed that they will visit us. And -- like Schutz at Aventura Mall on Saturday; and on November 11, the Alexandre Birman store. I'd like to mention Arezzo&Co Day, which will be on December 11. It's a pleasure to have this opportunity to interact with you -- with all of you on that day.

I'd also like to thank our Board of Directors, who have supported our growth strategy. Thank you once again.

[Operator]

The Arezzo conference call is now over. Thank you for your participation. Have a good day.