In the second quarter of 2004, gross revenue totaled R$ 705.2 million, against gross revenue of R$ 553.2 million in the same period of the previous year, an increase of 27.5% comparing the quarters.

In the first semester, gross revenue totaled R$ 1,278.1 million, against R$ 961.6 million in the same period of the previous year, signifying growth of 32.9%.

In the “same store sales” concept, that is, excluding new stores inaugurated less than a year ago and not including Americanas.com, the first semester growth was 18.7% in relation to the same period of the previous year.

Revenue per Associate increased by 31.5% compared with the first semester of the previous year. Comparing the quarters, there was an increase of 26.1%.

The table below shows the breakdown of sales by form of payment in the second quarter and first semester of 2003 and 2004:

In the second quarter of this year, the Company’s gross margin was 29.9% of net revenue (NR), against a gross margin of 29.4% of NR in the same period of the previous year.

In the first semester, the gross margin was 30.5% of net revenue, the same figure as in the same period of 2003.

Sales Expenses

In the second quarter of 2004, sales expenses amounted to R$ 89.6 million, or 16.5% of net revenue (NR), compared with R$ 77.9 million, or 16.7% of NR, in the same period of the previous year. In spite of the growth of 27.5% in gross revenue in the second quarter in relation to the same period of 2003, sales expenses did not increase proportionally in 2004.

In the first semester, sales expenses totaled R$ 172.3 million, or 17.2% of net revenue, an improvement of 0.7 p.p. in relation to the same period of the previous year.

It will be noted that the sales expenses for the first semester of 2004, compared with the same period of the previous year, take into account the opening of 16 new stores, in addition to increases in public rates, rentals and collective labor agreements.

General and Administrative Expenses

In the second quarter of 2004, general and administrative expenses amounted to R$ 15.8 million, or 2.9% of NR, resulting in a small increase of 0.2 p.p. in relation to the same period of the previous year.

In the consolidated results for the first semester, general and administrative expenses amounted to R$ 28.1 million, or 2.8% of net revenue, an improvement of 0.4 p.p.

In the second quarter of 2004 the operating income, before financial income and equity accounting, showed growth of 22.8%, totaling R$ 44.7 million, against R$ 36.4 million in the same period of 2003.

In the first semester, the Company showed operating income of R$ 80.5 million, representing growth of 43.5% compared with the same period of the previous year.

It is worthy of note that this is the ninth consecutive quarter in which the EBITDA margin has been maintained at over 8.0% of net revenue. The EBITDA margin for the second quarter reached 10.5% of net revenue, higher than the 9.9% of NR recorded in the same quarter of 2003. This represents growth of 23.5% in EBITDA for the second quarter of this year in relation to the same quarter of the previous year.

In the first semester of 2004, EBITDA totaled R$ 105.1 million, growth of 38.5% in relation to the same period of 2003. The EBITDA margin amounted to 10.5% of net revenue, an improvement of 1.1 p.p. in relation to the first semester of the previous year.

Financial revenues for the first semester of 2004 totaled R$ 72.5 million, 7.2% of net revenue (NR) and financial expenses amounted to R$ 136,0 million, 13.6% of NR. The Company continues to maintain its commitment to the conservative cash investment policy, by taking a hedge position in U.S. dollars to protect it against exchange variations, for both its financial liabilities and its total cash position.

The Eurobonds issued in 1996, amounting to US$ 150 million were liquidated as planned at the beginning of June 2004.

The net income for the second quarter of 2004 was R$ 6.0 million, compared to R$ 18.9 million in the same period of the previous year.

In the first semester of this year, net income amounted to R$ 11.1 million, compared to R$ 31.5 million in the same period of the previous year.

Despite the significant development in the operating results of the Company and its subsidiaries, the consolidated net income in the first semester of 2004 was influenced by the increase in the Social Contribution on Revenues – COFINS rate and by the financial expenses for the period, due to the payment for the Eurobonds.