slide presentation 1 q08

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Disclaimer

This presentation contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to 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.

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AGENDA: • Highlights• Operational Performance• Stock Market• Business Strategy and Outlook

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Highlights

STRONG PERFORMANCE IN BEGINING OF THE YEAR

• Goals outperformed

• Gross revenues of domestic market increased 43%

• EBITDA 41% higher

• Same-store sales up 40%

• Sales of Hering label 54% higher

• Three franchises launching: 2 Hering Stores and 1 PUC

GROWTH PLAN CONTINUED

• Hering Store chain expansion – Larger distribution network to support growth

• Hering Store credit card launch – To boost growth

• Successful Marketing – Campaign with celebrities and the IBCC

• Own brands – Wider and larger exposition in foreign market

CAPEX AND CAPITAL STRUCTURE

• Net cash balance of R$ 29.5 millions

• Capex of R$ 5.0 millions in 1Q08

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80.5

115.2

10.0

12.2

1Q07 1Q08

18.2%

43.1%

35.0%

Domestic Market

Exports

92.7

125.2

By Market

Gross Revenues (R$ million)

Hering’s growth strategy is focused on the domestic

market

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Gross Revenues – Domestic Market (R$ million)

32.4

55.3

59.9

48.1

1Q07 1Q08

58.1

89.312.6

9.610.7

10.72.6

2.1

1Q07 1Q08

By Brand

115.2

0.6%

30.4%

53.8%

PUCdzarm.Other

80.5

Owned/ Franchised

Multi-brand

24.5%

70.8%

Hering

115.2

80.5

By Distribution Channel

Price repositioning of Hering brand and owned and franchised stores chain expansion are the cornerstones for domestic market strategy.

43.1%

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3.44.8

5.1

8.8

1Q07 1Q08

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Gross Revenues – Exports (R$ million)

Private Label vs. Own Brands

North America3.03.4

4.73.3

1.03.00.9

1.70.8

0.3

1Q07 1Q08

Mercosul

Latin AmericaEuropeOther

41.9%Private Label

Own Brands

12.210.0

43.8%

18.2%10.0

12.2

By Destination

Export’s strategy is focused on own brands for Latin America.

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Gross Profit and EBITDA (R$ million)

28.7 43.1

1.1

0.5

38.4% 42.2%

1Q07 1Q08

3.8 pp

56.6%

50.3%

46.3%

29,843,6 Exports

Domestic Market

14.8 10.5

14.3%13.5%

1Q07 1Q08

41.1%

0.8 pp

Gross Profit (by market) and Gross Margin EBITDA and EBITDA Margin

Strong sales performance and operating enhancement generated growth in operating profit and margin

142157

2510

1Q07 1Q08

36 51 51

141156

188

226274

2510

2006 2007 2008 2009 2010

Hering Store chain expansion (no of stores)

53

43

30151

181

224

277

325

Own storesFranchise

Expansion Plan Quarterly Analysis

152182

48

* estimated

* * *

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10

Stores’ Geographic Distribution

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Distribution Network (no of stores)

181 182224

39 38

44 45

56

19 21

23 22

22

152151

0

0

0

0

0

0

0

2006 1Q07 2007 1Q08 2008

Hering PUC Foreign

Goal: 172

249248

211

Distribution Network Evolution

302

209

Three new franchises opened: two Hering Stores and one PUC

* estimated

*

Quarter State City Location Status

1Q08 SP São Paulo Bourbon Shop. Pompéia Opened

1Q08 PI Teresina Shop. Riverside Walk Opened2Q08 SP São Paulo Rua Dr. Diogo de Farias2Q08 SP Sta. Barbara d'Oeste Tivoli Shopping2Q08 SP São Paulo Rua Juventus2Q08 MG Juiz de Fora Independência Shopping2Q08 SP Guaratingueta Shopping Buriti Guará Confirmed2Q08 PR Maringa Shop. Avenida Center Forecasted2Q08 PR Ponta Grossa Palladium Shop. Center Forecasted

2Q08 PB João Pessoa Shopping Tambiá Forecasted2Q08 SE Aracaju Shopping Jardins Forecasted

2Q08 PE Caruaru Caruaru Shopping Forecasted

2Q08 DF Brasilia Liberty Mall Forecasted2Q08 SP Botucatu R. Monsenhor Ferrari Forecasted

2Q08 MG Patos de Minas R. Agenor Maciel Forecasted2Q08 MG Divinopolis R. Antonio O. de Morais Forecasted2Q08 SC Florianópolis Floripa Shopping Forecasted

Confirmed

Confirmed

Confirmed

Confirmed

Expansion Plan for 2008 – Franchises

Status

1T08

2 Franchises opened

2T08

5 Franchises confirmed

10 Franchises forecasted

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Expansion Plan for 2008 – Own Stores

Quarter State City Location Status

2Q08 RJ Rio de Janeiro Ilha Plaza Shopping Confirmed

2Q08

SP Taboão da Serra Shopping Taboão Forecasted2Q08

PR Curitiba Palladium Shop. Center Forecasted

2Q08 PR Curitiba Rua XV de Novembro Forecasted

2Q08 SP São Paulo Shopping Penha Forecasted

Status 2Q08

1 Store Confirmed

4 Stores Forecasted

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Hering Store – Indicators

Hering Store Performance 1Q07 1Q08 Chg.

Number of stores 152 182 19.7%

Franchise 142 157 10.6%

Own 10 25 150.0%

Sales (R$ thous.) 42,053 68,640 63.2%

Same Store Sales growth - 39.9%

Sales area (m²) 20,724 24,399 17.7%

Sales per m² (R$) 2,036 2,829 39.0%

Check-outs (thous.) 566 915 61.9%

Units 1,309 2,150 64.2%

Average sales tickets (R$) 74.36 74.99 0.8%

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Capex (R$ million)

2.0

1.2

2.0

0.1

1.5

0.4

0.3

0.2

1Q07 1Q08

5.0

2.7

Industry

Stores

IT

Other

By Activity

Sustainable growth with investments in:• launching and updating stores• production technology update• IT - business intelligence

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Indebtedness

-29.5-33.4

184.3184.6201.3

-0.53-0.65

3.423.84.6

2005 2006 1Q07 2007 1Q08

* Last 12 months EBITDA

Short Term57%

Long Term43%

Net Debt/EBITDA*

Net Debt (R$ million)

Total Debt = R$ 114.1 million

Indebtedness Evolution Short Term x Long Term

Cash to support investments in growth

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Stock Market

Cia Hering vs. Ibovespa Base 100 = 12/28/2007

95.4

85.5

12/28/2007 01/28/2008 02/28/2008 03/28/2008

IBOVESPA HGTX3

Number of Trades 534 2.645 395,3%Participation in Trading Sessions (%) 83,6% 100,0% 16,4 p.p.Quantity Traded (000) 854 4.261 398,9%Volume Traded (R$) 5.874 40.991 597,8%Share Price (R$¹) 9,50 8,98 -5,5%Total Shares Outstanding (000) 33.095 53.928 62,9%Market Cap (R$ MM¹) 314.393 484.264 54,0%(¹) end of period

Indicators - HGTX3 1Q07 1Q08 Chg.

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Business Strategy and Outlook

HERING STORE CHAIN EXPANSION

• Own Stores

• Closer to customers

• Growth in EBITDA

• Franchises/Multi-label retail

• Widespread distribution

• Strengthened geographic presence

HERING STORE CREDIT CARD

• Information

• Customers shopping habits and needs/desires identification

• Operating profit increase

• Average sales ticket increase in Hering Stores

• Revenues from financial products

PRODUCTS

• Increase in cross-sales in other categories

• Continuity of “Eu uso Hering” marketing campaign

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Investor Relations Team Fabio Hering – Deputy-CEO and IR DirectorVilmar da Costa – CFOKarina Koerich – IR ManagerPhone +55 (47) 3321-3469 e-mail: [email protected]

Investor Relations Consulting FirmFIRB – Financial Investor Relations BrasilPhone: +55 (11) 3897-6857e-mail: [email protected]

slide presentation 1 q08

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