This document summarizes Cia. Hering's 1Q17 results conference call. It had gross revenues of R$389 million, a 3.4% increase year-over-year. EBITDA was R$42.2 million, with a 130 basis point margin expansion. Net income increased 29.2% to R$37.8 million. Cash flow was R$72.7 million. The company expects signs of economic recovery and improvements in product and stores to drive brand growth throughout 2017. Strategies focus on evolving product styles and value, and optimizing store supply and inventory processes.

1. 1Q17 Results
Conference Call
April 28th, 2017 – 12:00 pm (BrT)
11:00 am (NY)/ 4:00 pm (London)

2. 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
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3. 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
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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

4. 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
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Evolutions in shopping experience,
setting and VM

5. 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
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6. 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.
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7. 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
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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)

8. 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 value
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9. INVESTOR RELATIONS TEAM
Fabio Hering – CEO
Frederico Oldani – CFO and IRO
Bruno Salem Brasil – IR Manager
Caroline Luccarini – IR Analyst
www.ciahering.com.br/ir
+55 (11) 3371 – 4867/4805
ri@hering.com.br