4Q15 ResultsConference Call

February 26th, 2016 – 11:00 am (BrT)9:00 am (NY)/ 2:00 pm (London)

4Q15 and 2015 Results

DISCLAIMER

This presentation contains forward-looking statements regarding theprospects of the business, estimates for operating and financialresults, and those regarding Cia. Hering'sgrowth prospects. These aremerely projections and, as such, are based exclusively on theexpectations of Cia. Hering management concerning the future of thebusiness and its continued access to capital to fund the Company’sbusiness Plan. Such forward-looking statements depend, substantially,on changes in market conditions, government regulations,competitive pressures, the performance of the Brazilian economy andthe industry, among other factors and risks disclosed in Cia.Hering’sfiled disclosure documents and are, therefore, subject tochange without prior notice.

• Financial Performance

• SAP Implementation

• Outlook

• Q&A

FINANCIAL PERFORMANCE

GROSS REVENUES AND BREAKDOWN BY BRAND

R$ MILLION

4Q15 4Q14 Change 2015 2014 Change

595.4 603.9 -1.4% 1,857.3 1,976.0 -6.0%

475.4 475.0 0.1% 1,415.0 1,482.6 -4.6%

58.4 57.1 2.3% 204.8 213.3 -4.0%

35.9 40.9 -12.4% 130.2 155.8 -16.5%

17.4 25.6 -31.8% 82.4 99.5 -17.2%

12.5 8.1 53.0% 42.8 35.1 22.2%International

Markets

GROSS REVENUES BREAKDOWN PER CHANNEL

DOMESTIC MARKET EX -OTHER REVENUES

2015, R$ MILLION – CHANGE 2015 X 2014

Gross revenues of R$ 1.9 billion, influenced by the negative effects of macroeconomic scenario

and greater conservatism of distribution channels.

HERING STORE NETWORK

GROSS SALES

SELL-OUT, R$ MILLION

Gross revenues of R$ 1,577.5 million (- 0.3%), affected by challenging consumer

environment, partially offset by the opening of 13 stores in the year

¹ Stores opened in the last twelve months net from closings.

FINANCIAL PERFORMANCE

EBITDA of R$ 262.9 million (-33.6%) explained by sales retraction

and operational deleveraging.

Gross margin retraction due to sales contraction, insufficient to

dilute fixed costs and higher promotional activity.

GROSS PROFIT

R$ MILLION AND GROSS MARGIN

EBITDA

R$ MILLION AND EBITDA MARGIN

FINANCIAL PERFORMANCE

NET INCOME

R$ MILLION AND NET MARGIN

CAPEX

R$ MILLION

Operating income decline was partially offset by higher

financial income and lower income tax.

Inauguration of São Luis de Montes Belos plant (Goiás State), and

implementation of SAP system.

In stores, investments were mainly to the opening of 2 DZARM.

stores, after its business plan reformulation.

FINANCIAL PERFORMANCE

Cash flow of R$ 114.7 million in 2015 , result of lower operating result and higher working

capital during the year, opposed in part to lower income tax and social contribution.

CASH FLOWS

R$ MILLION

Cash Flow - Consolidated 2015 2014 Chg.

EBITDA 262,876 395,835 (132,959)

No cash items 25,693 18,106 7,587

AVP (Adjustment to Present Value) - Clients and Suppliers 18,219 20,017 (1,798)

Current Income tax and Social Contribution 1,631 (74,042) 75,673

Working Capital Capex (96,812) (76,561) (20,251)

(Increase) decrease in trade accounts receivable 9,931 (37,623) 47,554

(Increase) in inventories (28,908) (3,736) (25,172)

Increase (decrease) in accounts payable to suppliers (20,420) 18,235 (38,655)

(Decrease) in taxes payable (24,745) (50,704) 25,959

Others (32,670) (2,733) (29,937)

CapEx (96,915) (96,553) (362)

Free Cash Flow 114,692 186,802 (72,110)

FINANCIAL PERFORMANCE

Cash generation converted into shareholder’s return.Payout of 47% in 2015.

SHAREHOLDER’S RETURN

R$ MILLION

SAP IMPLEMENTATION

Implementation schedule foresees project closure in March/16

‘Go-Live’ with assisted operation during the month

Operation normalization, but still monitored by the project team

Project closure, with operations conducted by the company normally

Jan

Mar

Feb

53

PERSPECTIVAS

Economic environment remains challenging in 2016

Priorities for 2016: actions to revamp sales growth by improving Products supply and Shop

experience (P&S)

Aggressive refurbishment plan at Hering Store Network

Balance Sheet and Earnings protection - CapEx reduction, expenses control and reduction in

collection leftovers.

Fabio Hering – CEOFrederico Oldani – CFO and IRO

Bruno Salem Brasil – IR ManagerCaroline Luccarini – IR Analyst

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

ri@hering.com.br

INVESTOR RELATIONS TEAM