THG posts profit surge but shares fall on Q3 slowdown outlook
THG reported a 78% jump in adjusted EBITDA driven by Myprotein, yet investors reacted negatively to a forecast of slowing growth in the third quarter.
Manchester-based THG reported first-half revenues of £828.7m, exceeding its internal guidance, but the stock declined following the announcement. The group’s adjusted EBITDA rose sharply to £42.8m, a 78.3% increase year-on-year, while the statutory operating loss narrowed significantly. Despite these improved profitability metrics, the market remained cautious, citing the company’s own admission that revenue growth will decelerate in the coming months due to external economic pressures.
The positive results were driven primarily by the Nutrition division, where Myprotein revenue grew 9.2% to £328.5m. Adjusted EBITDA for this segment more than tripled on a like-for-like basis, reaching £26m. THG attributes this margin expansion to a strategic shift away from low-margin whey protein toward higher-value categories such as hydration, creatine, and activewear, which saw a 57% increase in global product units sold.
Beauty platform margins expand
THG Beauty contributed £500.2m in revenue, representing 5.9% growth on a constant-currency basis. Adjusted EBITDA for this division increased 23.8% to £25m. UK retail performance was supported by premium brand launches and a 17.4% rise in skincare sales at Lookfantastic. Customer loyalty deepened as membership grew by 9% to 3.5m, with returning customers accounting for 90% of total revenue. The company also noted strong early sales for its holiday advent calendars.
Guidance flags near-term headwinds
Management expects revenue growth to slow to approximately 2% in the third quarter, a significant deceleration from the first half. This forecast is attributed to pressure on discretionary consumer spending, the impact of European heatwaves, and new EU duties affecting beauty products. Additionally, the timing of certain own-brand sales has shifted into the fourth quarter. THG projects growth will recover to between 6% and 7% in the final quarter of the year.
Market reaction reflects caution
Investors appeared unpersuaded by the operational improvements, with shares sliding after the release. The reaction highlights a disconnect between improved historical performance and forward-looking uncertainty. According to market commentary from GN stocks/shares-surge, the market is prioritizing the risk of a near-term revenue slowdown over the company’s current profitability gains. Net debt stood at £329.7m at the period end, despite cash and available facilities of £238.7m.
