THG Shares Testing Lows As Firm Slips From FTSE 250

THG shares (LON:THG) are under pressure again today, down 7%, having flirted with the 52 week low of 23.36p. This latest decline underscores the continued challenges facing the e-commerce group, already reeling from a series of strategic missteps, profit warnings, and now a demotion from the FTSE 250 index.

The recent demotion from the FTSE 250 index serves as a further blow to THG, with shares likely to be impacted by funds no longer being required to hold the company in order to fulfil index matching requirements. Wickes is set to take it's place in the FTMC.

After a fall of 65% in the past 12 months, the company's market capitalization now stands at a diminished £328.75 million, a far cry from its peak valuation (-97%) following its initial public offering. This persistent bearish trend indicates a lack of investor confidence and raises concerns about the company's long-term viability. The current price represents a substantial 28.3% decline from the 200-day average, indicating a strongly bearish trend.

Several key events have contributed to THG's recent woes as you can see below.

In January 2025, the company completed the demerger of its technology and logistics arm, Ingenuity, in an effort to streamline operations and focus on its core beauty and nutrition businesses. While the demerger was intended to unlock value, it resulted in a 7.1% year-on-year decline in group revenue to £1.94 billion for 2024.

The nutrition segment experienced a particularly sharp decline, with a 12.7% drop in Q4 2024 sales. Investors reacted negatively to the revenue decline and strategic shift, sending THG's shares down over 6% following the demerger.

Adding to the company's challenges, THG terminated discussions with Apollo Global Management regarding a potential takeover in May 2023, citing “inadequate valuations.” This decision led to a nearly 10% drop in THG's share price, reflecting investor disappointment over the failed acquisition talks. Throughout 2023 and 2024, THG issued multiple profit warnings and revised revenue targets downward, further eroding investor confidence.

THG's balance sheet also raises concerns. The company's debt-to-equity ratio of 75.19 indicates a high level of leverage, while its current ratio of 1.25 and quick ratio of 0.89 suggest potential liquidity challenges. These factors, combined with the company's negative P/E ratio and declining share price trend, paint a concerning picture of THG's financial health.

With the stock down near historic lows, and under pressure on the day, it could take something significant to shift sentiment.