Hering reported its 2Q13 results with revenues growing 11.6% and EBITDA up 36%. While gross margins expanded, EBITDA margins declined slightly. Net income grew 4.3% despite higher taxes. Cash flow was down due to taxes, capex, and inventory growth. Hering expects continued growth from its apparel brands in 2H13 but cautions about economic uncertainty. It aims to gain retail market share and expand its store network while improving the online shopping experience.

1. 2Q13 Results
Conference Call
July 18, 2013

2. 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.

3. AGENDA
Operating Performance
2Q13 Results
Outlook

4. 4
2Q13 OVERVIEW
Gross Revenues (R$ million)
EBITDA (R$ million)Distribution Network
R$ 340.9
R$ 35.3
R$ 28.3
R$ 380.3
R$ 41.7
R$ 29.4
+11.6%
R$ 40.0 R$ 54.3+36.0%
+18.1%
+3.9%
2Q12 2Q13
Foreign
Market R$ 6.9 R$ 7.9+15.3%
R$ 460.7 R$ 521.2+14.4%
Hering Store Network (Sell Out R$ million)
Channel 2Q12 2Q13
% Domestic
Market 2Q13
Multi-brand
Retail
16,806
clients
17,596
clients
50.8%
Franchises 485 stores 589 stores 37.1%
Webstore 3 stores 3 stores 1.3%
Own Stores 61 stores 66 stores 10.7%
350,3 350,3 350,3
387,1
+71
Stores -1.2%
-
2Q12 Expansion SSS 2Q13
+10.5%
110.0 116.7
28.7%
26.8%
6.0%
2Q12 2Q13
EBITDA EBITDA Margin

5. 5
2Q13 HERING CAMPAINGS
Valentine´s DayMother´s Day
 Positive SSS performance on the 1st
half of 2Q13
 Good acceptance of the collection
 SSS deceleration after Mother´s Day
 Impact of uncertain social-economic scenario
 Lower consumer flow

6. AGENDA
Operating Performance
2Q13 Results
Outlook

7. 7
SALES PERFORMANCE
In 2Q13, Gross Revenues reached R$ 521.2 million (+13.1%) with double digit growth
across Hering, Hering Kids and PUC brands.
Gross Revenues per Brand (R$ million) Gross Revenes per Channel (R$ million)
340.9
380.3
40,0
54.335.3
41.7
28.3
29.4
2Q12 2Q13
Hering Hering Kids PUC dzarm.
18.1%
3.9%
11.6%
36.0%
231.2 257.2
155.4
187.6
4.7
6.7
53.2
54.3
2Q12 2Q13
Multibrand Retail Franchise Webstore Owned Stores
43.6%
2.1%
11.2%
20.7%

8. 8
GROSS PROFIT AND EBITDA
0.8 p.p. expansion in gross margin due to lower promotional activity in relation to 2Q12
compensated by higher profit sharing provisioning, not translating into EBITDA margin
Gross Profit and Gross Margin (R$ million) EBITDA and EBITDA Margin (R$ million )
173.1
200.6
15.9%
45.2%
46.0%
46.3% 47.0%
2Q12 2Q13
Gross Profit Gross Margin Cash Gross Margin
110.0 116.7
28.7%
26.8%
6.0%
2Q12 2Q13
EBITDA EBITDA Margin

9. 9
NET INCOME AND CAPEX
+4.3% growth in Net Income, as a result of EBITDA growth combined with higher
Income & Social Contribution Taxes. CapEx totalled R$ 16.6 million in 2Q13, with
highlight to IT infrastructure (R$ 5.7 million) due to the process of extending the SAP.
Net Income (R$ million) Capex (R$ million)
85.2 88.8
22.2%
20.4%
4.3%
2Q12 2Q13
Net Income Net Margin
6.2
8.5
4.4
5.7
0.5
0.2
1.2
2.2
12.3
16.6
35.0%
2Q12 2Q13
Industry IT Others Stores

10. 10
CASH FLOW
Reduction of R$ 7.3 million in cash flow generation in comparison to 2Q12, due to (i)
higher incidence of Income and Social Contribution taxes, (ii) increase in CapEx and
(iii) inventory building.
Cash Flow - Consolidated (R$ thousand) 2Q12 2Q13 Chg.
EBITDA 110.008 116.656 6.648
Non cash items 953 1.104 151
Current Income tax and Social Contribution (25.329) (32.386) (7.057)
Working Capital Investment 17.484 14.689 (2.795)
Decrease (Increase) in trade accounts receivable (38.824) (28.987) 9.837
Decrease (increase) in inventories 34.086 18.802 (15.284)
Increase (decrease) in accounts payable to suppliers (964) (2.565) (1.601)
Increase (decrease) in taxes payable 18.782 7.219 (11.563)
Others 4.404 20.220 15.816
CapEx (12.348) (16.643) (4.295)
Free Cash Flow 90.768 83.420 (7.348)

11. AGENDA
Operating Performance
2Q13 Results
Outlook

12. 12
OUTLOOK
 2S13 initiates with caution due to uncertainties in the social-economic scenario.
 Evolution in the organizational structure of the Company with higher focus on Brand
Management.
 Hering and Hering Kids as the main growth avenue
 Guidance of 77 new Hering Stores e 30 Hering Kids in the year
 Hering Store project evolution with 1st pilot store under renovation in the Ibirapuera Shopping Mall
 Gain of share in the multi-brand retail channel through qualification strategy
 High growth potential in the Hering Kids network
 Continuation of campaings and improvements in shopping experience to further exploring the
online retail.
 Room for gross margin recovery, however PPR normalization allied to a scenario of high volatiliy
in exchange rates, should not reflect in operational margin expansion in the year

13. INVESTOR RELATIONS TEAM
Fabio Hering – CEO
Frederico Oldani – CFO and IRO
Patrícia Salem – IR Manager
Daniel Popovich – IR Analyst
Tel. +55 (11) 3371-4867
E-mail: ri@hering.com.br
Website: www.ciahering.com.br/ri