4Q10 Conference Call

March 04, 2011

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

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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.

AGENDAAGENDA

HighlightsHighlights

4Q10 Operational 4Q10 Operational 4Q10 Operational 4Q10 Operational PerformancePerformance

OutlooksOutlooks

4Q10 HIGHLIGHTS

� Gross Sales - growth in the quarter (+41.6%) and in 2010 (+40.8%).

� Double-digit sales growth for all brands, mainly Hering: (+44.6% in 4Q10 and +44.2% in the year).

� Same Store Sales growth in Hering Store chain: (+20.8% in 4Q10 and +24.4% in 2010).

� EBITDA of R$ 276.5 million and an EBITDA margin of 27.3% in 2010

� Net Profit: growth of 101.6% in 4Q10 and 54.2% in 2010, resulting from better operational performance

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and lower tax provision due to investment grants.

� Hering Store Chain:

� Store openings exceed forecast (+10) in the Hering Store chain, which ended the year with 347

stores.

� New guidance for store openings - 418 by the end of 2011

� Opening of two Hering Kids pilot stores and the first dzarm flagship store.

AGENDAAGENDA

HighlightsHighlights

4Q10 4Q10 OperationalOperational4Q10 4Q10 OperationalOperationalPerformancePerformance

OutlooksOutlooks

15.4

21.2

Gross Revenue ( R$ million)

SALES PERFORMANCE

877.0

1,235.1

37.6%

40.8%

284.7 403.6

861.6

1,214.0

3.0 3.8

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Gross Sales reached R$ 1.2 billion in 2010, with 41.6% and 40.8% growth in 4Q10 and in the year, respectively,

287.7 407.4

41.7%

28.8%

41.6% 40.9%

4Q09 4Q10 12M09 12M10

Domestic Market Foreign Market Total

SALES PERFORMANCE (cont.)

Domestic Market ( R$ million)

Hering Hering

R$ 652.6 R$ 941.1+44.2%

20102009

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Double-digit sales growth in all brands, in 4Q10 and 2010, highlight to the Hering brand (+44.6% and +44.2%).

Hering77%

Hering Kids7%

PUC8%

dzarm.6%Others

2%

R$ 78.4

R$ 54.2

R$ 98.8

R$ 68.9

R$ 58.4 R$ 82.2+40.8%

+26.1%

+27.1%

STORES CHAIN EVOLUTION

2

44

59

74

781

1923

22

15

15

209248

311

365

443

Goal: 224Goal: 273

Goal: 325(+22 stores)

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In the domestic market, we ended 2010 with 347 Hering Stores, 78 PUC, 2 Hering Kids e 1 dzarm. store

2006 2007 2008 2009 2010

151 181230

27634739

4419Goal: 172(+9 stores)

Goal: 224(+6 stores)

Goal: 273(+3 stores)

(+22 stores)

TotalHering Store Hering Kids PUC dzarm. Foreign - Franchised

HERING STORE CHAIN PERFORMANCE

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SSS growth (+20.80% in 4Q10 and +24.4% in 2010) mainly driven by increased stores traffic

GROSS PROFIT AND GROSS MARGIN

52.2% 51.5%

53.3% 52.6%

-0.7 p.p.

-0.8 p.p. 47.3%

49.5%48.7%

50.6%

+2.2p.p.

+1.9 p.p.

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Gross margin expansion of 2.2 p.p. in 2010, with a 0.7 p.p. decrease in 4Q10 due to higher AVP and advanced yarn purchase.

4T09 4T10 12M09 12M10

124.1 170.5

340.9

501.9

Cash Gross Margin (%)Gross Margin (%)Gross Profit (R$ Million)

37.4%

47.3%

4Q104Q09

EBITDA AND EBITDA MARGIN

21.4%

27.3%

26.4%31.1%

+4.7 p.p.

+5.9 p.p.

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Strong EBITDA growth and EBITDA margin expansion in 4Q10 as well as in 2010.

4T09 4T10 12M09 12M10

62.8 102.9

154.5 276.5

EBITDA Margin (%)EBITDA (R$ Million)

63.9%

79.0%

4Q104Q09

0.1% 0.1% 0.8%0.5% 4.6%

1.3%

EBITDA Margin - 4Q Variation

0.1%1.1% 0.3% 1.2% 3.9%

0.0%

EBITDA Margin - Annual Variation

EBITDA MARGIN

Mg EBITDA

4Q09

Deduction Tax Incentives

AVP Net Gross Margin (ex TI and ded)

SG&A Dilution

Others Mg EBITDA

4Q10

26.4%31,1%

EBITDA Mg 2009

Deductions Tax Incentives

AVP Net Gross Margin (ex TI and ede)

SG&A Dilution

Others EBITDA Mg 2010

21.4%27.3%

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Significant EBITDA margin expansion due to the high operating leverage of our business model.

NET PROFIT

212.0

21.0%30.5%

19.1% 20.9%

+ 9.4 p.p.

+1.8 p.p.

54.2%

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Net profit growth due to better operating performance, adjustment to present value (AVP) and establishment of investment grants

4T09 4T10 12M09 12M10

50.0 100.8

137.5

212.0

Net Margin (%)Net Profit (R$ Million)

54.2%

101.6%

4Q104Q09

By Activity ( R$ million)

CAPEX

8.1

12.1

127.5%

71.0

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Capex in 2010 totaled R$ 71.0 million of which R$ 48.6 million was aimed at the industrial area and R$ 12.1 million was invested in stores.

.

4T09 4T10 12M09 12M10

3.8 11.6 14.4

48.6

1.4

2.6 4.8

0.5

2.7

9.3 129.1%

7.7

17.6

31.2

4Q104Q09

Industry IT Other Stores

CASH FLOW

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Free cash flow decrease due to higher capex, restocking and advanced yarn purchase.

Net Debt ( R$ million) Short Term x Long Term

INDEBTEDNESS

Short Term51.6% Long

4.6

3.5

(0.7)

0.1 (0.2) (0.2)

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In 2010 the R$ 23.7 million debt reduction was a result of the Company’s strategy on concentrating its financing in operations with lower interest rates and longer maturity.

Gross Debt = R$ 53.9 million

51.6% Long Term48.4%

* Last 12 months EBITDA

Net Debt/ EBITDA*

2005 2006 2007 2008 2009 2010

201.3 184.6

(33.4)

11.0

(25.1)(61.9)

AGENDAAGENDA

HighlightsHighlights

4Q10 4Q10 OperationalOperational4Q10 4Q10 OperationalOperationalPerformancePerformance

OutlooksOutlooks

OUTLOOKS

� We remain confident about growth prospects for 2011.

� Hering brand continues to be the company’s main growth platform:

� HS chain - stores openings and growth in same-store sales concept.

� New guidance for HS openings, + 71 stores in 2011, reaching 418 stores.

� Share increase in the multibrand channel mainly though specialization.

� Children’s market – opening of two more Hering Kids pilot stores.

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� Children’s market – opening of two more Hering Kids pilot stores.

� With dzarm. we will continue to execute the brand strategy by launching collections in the jeans casual concept, supported by marketing campaigns associating young celebrities to the brand.

� The company decided to rethink the current online business format in order to better explore the potential of the channel.

� Rising cotton prices might affect the gross margins in the coming quarters, however we believe we will be able to sustain EBITDA margins at 2010 levels.

INVESTOR RELATIONS TEAMINVESTOR RELATIONS TEAM

Fabio Hering – CEOFrederico Oldani – CFO and IRO

Karina Koerich – IR ManagerAdmar A. Topazio Junior – IR Analyst

Tel. +55 (47) 3321-3469E-mail: ri@hering.com.br

Website: www.ciahering.com.br/ir