THG (LON: THG), the Manchester-based owner of Myprotein and Lookfantastic, saw its shares fall sharply earlier today despite first-half results that beat its own guidance on revenue and profit.
The shares dropped to 29.20p, down 7.9% from yesterday’s close of 31.70p, after the online beauty and nutrition group published its interim results today, near the bottom of its 52-week range of 27.20p to 52.55p.
Group revenue rose 7.2% year-on-year on a constant-currency basis to £828.7m, ahead of THG’s own 6.5% guidance, while adjusted EBITDA, underlying profit before interest, tax, depreciation and one-off items, more than doubled on a like-for-like basis to £42.8m against a £40m target. Myprotein-led THG Nutrition drove the beat, with EBITDA doubling to £26.0m, while THG Beauty grew EBITDA 23.8% to £25.0m, though its gross margin slipped as manufacturing orders were pushed into the second half.
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The shares fell because management guided to only around 2% revenue growth in the third quarter, a sharp slowdown from the first half’s 7.2% pace. THG pointed to a new EU duty on Beauty products in force since 1 July, a European heatwave that dented demand, and revenue phasing into the fourth quarter and next year. Management still expects fourth-quarter growth to recover to 6-7% and reiterated that full-year revenue, EBITDA and free cash flow remain in line with consensus.
Chief executive Matthew Moulding said: “Looking ahead, we enter H2 with real momentum, whilst also acknowledging broader market challenges around consumer discretionary spend, record high whey commodity pricing, as well as recent EU tariffs.”
