1Q14 Results

Conference Call April 25, 2014

DISCLAIMER

This presentation contains forward-looking statements regarding the

prospects of the business, estimates for operating and financial results, and

those regarding Cia. Hering's growth prospects. These are merely projections

and, as such, are based exclusively on the expectations of Cia. Hering

management concerning the future of the business and its continued access

to capital to fund the Company’s business Plan. Such forward-looking

statements depend, substantially, on changes in market conditions,

government regulations, competitive pressures, the performance of the

Brazilian economy and the industry, among other factors and risks disclosed

in Cia. Hering’s filed disclosure documents and are, therefore, subject to

change without prior notice.

AGENDA

1Q14 Results

Outlook

Q&A

4

1Q14 OVERVIEW

Gross Revenues (R$ million)

R$ 335.8

R$ 34.9

R$ 22.8

R$ 342.7

R$ 34.5

R$ 21.9

+2.0%

R$ 43.7 R$ 51.9 +18,8%

-1,3%

-4.1%

1Q13 1Q14

Foreign

Market R$ 7.5 R$ 8.0 +7.5%

R$ 454.3 R$ 466.7 +2.7% 214.8 226.1

174.7 179.5

5.5 5.1

42.2 40.3

1Q13 1Q14

Multibrand Retail Franchise Webstore Own Stores

16.8

2.6%

11.6

-7.1%

-4.5%

5.3%

2.7%

Gross Revenues per Channel (R$ million)

Gross revenues of R$ 466.7 million (+2.7%), mainly due to a growth below

the expected in the franchise channel.

5

1Q14 OVERVIEW

Hering Store network (Sell Out R$ million)

273.4 273.4 273.4 284.6

79 stores -4.1%

-

1Q13 Expansion SSS 1Q14

+4.1

SSS volatility throughout the quarter

Vacation and fall collections + End of year RAPA (promotional season).

Redeeming period for the Bonus Card.

Hering Store network growth mainly due to store openings.

6

GROSS PROFIT AND EBITDA

EBITDA generation impacted by lower sales level associated with expenses growth due

to the new organizational structure.

Gross Profit and Gross Margin EBITDA and EBITDA Margin

170.1 174.9

2.8%

44.8% 44.3%

45.9% 45.6%

1Q13 1Q14

Gross Profit Gross Margin Cash Gross Margin

102.2 94.5

26.9%

24.0%

-7.5%

1Q13 1Q14

EBITDA EBITDA Margin

7

NET INCOME AND CAPEX

Decrease of 6.9% in Net Income in the quarter, in line with EBITDA. CAPEX in-line with

Company’s annual budget.

Net Income (R$ million) Capex (R$ million)

69.4 64.6

18.3% 16.4%

-6.9%

1Q13 1Q14

Net Income Net Margin

1.4 0.6

5.6 7.2

0.2

1.5 1.3

2.3

8.5

11.6

36.5%

1Q13 1Q14

Industry IT Others Stores

8

CASH FLOW

Free Cash Flow of R$ 27.5 million, a R$ 8.6 million reduction in comparison to

1Q13, due to lower EBITDA.

Cash Flow - Consolidated 1Q13 1Q14 Chg.

EBITDA 102,211 94,497 (7,714)

No cash items 2,427 2,477 50

Current Income tax and Social Contribution (30,417) (28,818) 1,599

Working Capital Capex (29,686) (29,103) 583

Decrease in trade accounts receivable 20,501 38,665 18,164

(Increase) in inventories (30,323) (21,146) 9,177

(Decrease) in accounts payable to suppliers (2,309) (16,230) (13,921)

(Decrease) in taxes payable (19,512) (30,185) (10,673)

Others 1,957 (207) (2,164)

CapEx (8,478) (11,556) (3,078)

Free Cash Flow 36,057 27,497 (8,560)

* Dividends: approved by the General Shareholders’ Meeting held on Apr 23rd 2014 the distribution of additional dividends

in the amount of R$ 50.0 million (R$ 0.3037 per share) to current shareholders on the date, correspondent to the utilization

of the retained earnings reserves. Dividends shall be paid by May 28th 2014.

AGENDA

1Q14 Results

Outlook

Q&A

10

OUTLOOK

Challenging scenario remains in 2Q14

Associated with the macroeconomic scenario and the World Cup.

Sales and margin growth should be negatively impacted.

Initiatives to be implemented mid-year on

Launch of 1st Hering For You store;

Hering Store: improvements in product assortment and the re-launching of the basics starting in

the summer collection;

dzarm.: new business plan;

Sustaining both expansion plan and growth in the multi-brand retail;

Webstores’ platform substitution.

AGENDA

1Q14 Results

Outlook

Q&A

INVESTOR RELATIONS TEAM

Fabio Hering – CEO

Frederico Oldani – CFO and IRO

Bruno Salem Brasil – IR Manager

Daniel Popovich – IR Analyst

Tel. +55 (11) 3371-4867

E-mail: ri@hering.com.br

Website: www.ciahering.com.br/ri