1Q17 ResultsConference Call

April 28th, 2017 – 12:00 pm (BrT)11:00 am (NY)/ 4:00 pm (London)

1Q17 Results

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.

• Financial Performance

• Outlook

• Q&A

2

FINANCIAL PERFORMANCE

GROSS REVENUES AND BREAKDOWN BY BRAND

R$ MILLION

GROSS REVENUES BREAKDOWN PER CHANNEL

DOMESTIC MARKET EX-OTHER REVENUES

1Q17, R$ MILLION – CHANGE 1Q17 X 1Q16

Gross Revenue of R$ 389.0 million in 1Q17, influenced by sales recovery

in multibrand, own stores and webstores channels

3

1Q17 1Q16 Change

389.0 376.1 3.4%

275.2 274.6 0.2%

54.2 45.5 19.2%

26.1 26.0 0.7%

14.9 14.3 4.3%

9.9 9.1 9.1%International

Market

HERING STORE NETWORK

GROSS SALES

SELL-OUT, R$ MILLION

Gross revenues of R$ 270.3 million (-4.0%), impacted by SSS drop

due to macroeconomic scenario, consumer’s flow reduction and

lower traffic.

¹ Change in store count over the last 12 months.

STORE REFURBISHMENT PLAN

4

Evolutions in shopping experience,

setting and VM

FINANCIAL PERFORMANCE

EBITDA of R$ 42.2 million, 130 bp of margin expansion due to sales

growth and gross margin increase.

Gross margin gain (+320 bp) due to lower volume of past-season

collections, result of improvements in the quality of company's

inventory in recent quarters.

GROSS PROFIT

R$ MILLION

EBITDA

R$ MILLION

5

FINANCIAL PERFORMANCE

NET INCOME

R$ MILLION

CAPEX

R$ MILLION

Net income of R$ 37.8 million (+29.2%), due to operating income

improvement, net financial income and lower income tax rate.

Lower investments in IT past the conclusion of SAP

implementation in 1Q16.

6

FINANCIAL PERFORMANCE

Cash flow of R$ 72.7 million, R$ 26.3 million lower than 1Q16, explained by sales growth resumption

and its consequent impact on working capital

CASH FLOWS

R$ MILLION

7

Cash Flow - Consolidated (R$ thousand) 1Q17 1Q16 Chg.

EBITDA 42,245 36 ,491 5 ,754

Non cash items 3,972 3,612 360

APV (Adjustment to Present Value) - Clients and Suppliers 9,857 5,712 4,145

Current Income tax and Social Contribution (2,744) (3,795) 1,051

Working Capital Capex 23,908 62 ,768 (38,860)

Decrease in trade accounts receivable 87,197 123,202 (36,005)

(Increase) in inventories (37,570) (10,378) (27,192)

(Decrease) in accounts payable to suppliers (21,075) (37,329) 16,254

(Decrease) in taxes payable (6,353) (6,580) 227

Refurbishment Project - Franchisee Financing 3,397 (2,680) 6,077

Others (1,688) (3,467) 1,779

CapEx (4 ,579) (5 ,834) 1 ,255

Free Cash Flow 72,659 98 ,954 (26,295)

OUTLOOK

• Signs of economic recovery, combined with operation’s improvements from both Product and Store (P&S)

fronts, should translate into brands’ resumption growth throughout 2017

• Strategy based on Product and Store continues:

• Product:

• winter collection displays important evolutions in style and value for money translated into good sales performance for the channels (sell-in)

• launching of Basicamente isso (‘Basically this’) campaign of Hering brand that explores brand's casual style good momentum in the apparel market

• Store:

• supply processes’ improvements with automatic replenishment of shrinkage for fast-selling basics

• Sales growth resumption combined with margins recovery through inventories normalization and strict

expenses control will allow us to extract our brands’ greater value9

INVESTOR RELATIONS TEAM

Fabio Hering – CEOFrederico Oldani – CFO and IROBruno Salem Brasil – IR ManagerCaroline Luccarini – IR Analyst

www.ciahering.com.br/ir+55 (11) 3371 – 4867/4805ri@hering.com.br