2. 1
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.
4. 3
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
7. Gross Revenues – Domestic Market (R$ million)
32.4
55.3
59.9
48.1
1Q07 1Q08
58.1
89.3
12.6
9.6
10.7
10.7
2.6
2.1
1Q07 1Q08
By Brand
115.2
0.6%
30.4%
53.8%
PUC
dzarm.
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%
6
8. 3.4
4.8
5.1
8.8
1Q07 1Q08
7
Gross Revenues – Exports (R$ million)
Private Label vs. Own Brands
North America3.03.4
4.73.3
1.03.0
0.9
1.7
0.8
0.3
1Q07 1Q08
Mercosul
Latin America
Europe
Other
41.9%
Private
Label
Own
Brands
12.2
10.0
43.8%
18.2%
10.0
12.2
By Destination
Export’s strategy is focused on own brands for
Latin America.
9. 8
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%
29,8
43,6 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
10. 142
157
2510
1Q07 1Q08
36 51 51
141
156
188
226
274
2510
2006 2007 2008 2009 2010
Hering Store chain expansion (no of stores)
53
43
30
151
181
224
277
325
Own storesFranchise
Expansion Plan Quarterly Analysis
152
182
48
* estimated
* * *
9
12. 11
Distribution Network (no of stores)
181 182
224
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
*
13. Quarter State City Location Status
1Q08 SP São Paulo Bourbon Shop. Pompéia Opened
1Q08 PI Teresina Shop. Riverside Walk Opened
2Q08 SP São Paulo Rua Dr. Diogo de Farias
2Q08 SP Sta. Barbara d'Oeste Tivoli Shopping
2Q08 SP São Paulo Rua Juventus
2Q08 MG Juiz de Fora Independência Shopping
2Q08 SP Guaratingueta Shopping Buriti Guará Confirmed
2Q08 PR Maringa Shop. Avenida Center Forecasted
2Q08 PR Ponta Grossa Palladium Shop. Center Forecasted
2Q08 PB João Pessoa Shopping Tambiá Forecasted
2Q08 SE Aracaju Shopping Jardins Forecasted
2Q08 PE Caruaru Caruaru Shopping Forecasted
2Q08 DF Brasilia Liberty Mall Forecasted
2Q08 SP Botucatu R. Monsenhor Ferrari Forecasted
2Q08 MG Patos de Minas R. Agenor Maciel Forecasted
2Q08 MG Divinopolis R. Antonio O. de Morais Forecasted
2Q08 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
12
14. 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
13
15. 14
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%
16. 15
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
21. 20
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
22. 2121
Investor Relations Team
Fabio Hering – Deputy-CEO and IR Director
Vilmar da Costa – CFO
Karina Koerich – IR Manager
Phone +55 (47) 3321-3469
e-mail: ri@heringnet.com.br
Investor Relations Consulting Firm
FIRB – Financial Investor Relations Brasil
Phone: +55 (11) 3897-6857
e-mail: eduardo.campos@firb.com
