THG Shares Gain as Strong Sales Growth Boosts Sentiment

THG PLC shares (LON:THG) are trading higher today, up 3.74%, following the release of a trading update that revealed a strong quarter of organic sales growth. While still down 10.3% YTD, the Q3 performance has buoyed market sentiment, signaling a potential turnaround for the e-commerce group.

The company reported a 6.3% increase in group revenue on a constant currency (CCY) basis for the third quarter of 2025, marking its strongest quarterly organic growth since Q4 2021. This growth returns the Group to YTD revenue growth.

Breaking down the performance, THG Beauty saw a 4.2% increase in Q3 revenue on a CCY basis, reaching £258.2 million. THG Nutrition demonstrated even stronger momentum, with a 10.0% increase to £147.0 million. Year-to-date figures show THG Nutrition up 5.3% while THG Beauty decreased -2.6%

The robust Q3 performance has positioned the group favorably against its previously issued H2 2025 revenue guidance, which projected growth of +1.0% to +3.0% for THG Beauty and +10.0% to +12.0% for THG Nutrition, implying a Group performance of +3.9% to +5.9%.

The company noted that prior disposals and discontinued activities had a dampening effect on overall growth figures. Specifically, the sale of the luxury portfolio within THG Beauty impacted YTD and Q3 revenue growth by 490bps and 380bps, respectively. The sale of Claremont Ingredients in Q3 2025, impacted YTD and Q3 2025 revenue growth for THG Nutrition by 30bps and 40bps respectively.

Despite these headwinds, the underlying performance of both THG Beauty and THG Nutrition suggests that operating model changes and brand proposition investments are beginning to yield positive results. The double-digit growth in THG Nutrition is particularly encouraging, indicating strong demand for the company's health and wellness products.

The board's full-year performance expectations remain unchanged and are expected to be in line with company consensus, with the Group entering its most profitable and cash generative period. This suggests that the company is confident in its ability to sustain its current momentum and deliver on its financial targets.

The market's positive reaction to the Q3 update indicates a renewed sense of optimism surrounding THG's prospects. The strong sales growth, particularly in THG Nutrition, provides evidence that the company's strategic initiatives are gaining traction.

The markets will be closely watching THG's ability to maintain its growth trajectory in the coming quarters. While the company has made significant progress in streamlining its operations and focusing on its core businesses, it still faces challenges in a competitive e-commerce landscape.