THG H1 2026 Earnings Report

THG EPS Results

• Actual EPS: -GBX 3
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

THG Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

THG Announcement Details

• Quarter: H1 2026
• Date: 9/10/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, September 10, 2026
• Conference Call Time: 3:30AM ET

THG (LON:THG) (www.thg.com) is a global innovator revolutionising how brands connect to a worldwide consumer base. We are transforming how consumer brands go to market in the digital age. We have built a portfolio of leading digital beauty, health, wellness, and sports nutrition brands that are capitalising on the global growth opportunities, supported by the accelerating consumer shift to the e-commerce channel. THG is home to three key divisions: Beauty, Nutrition, and Ingenuity. All brands, whether in-house or third parties are powered by our complete commerce division Ingenuity, which is a flexible and scalable offering formed of a combination of complex e-commerce technologies, physical assets, infrastructure, and brand building capabilities. THG Beauty is home to leading online pure-play retailers for prestige beauty products and brings together global online multi-brand retail subscription boxes, owned prestige brands along with production and innovation. It operates leading pure-plays sites such as Lookfantastic, Cult Beauty and Dermstore, offering more than 1,300 premium brands across the skincare, haircare, cosmetics and fragrance categories. THG Nutrition is a group of digital-first nutrition and wellbeing brands, including the world’s largest online sports nutrition brand, Myprotein, and it’s family of brands. The division is driven by a vertically integrated business model and supported by global THG-owned production facilities. The division manufactures and develops over 80% of its nutrition products by revenue in-house through a network of global facilities across the UK, USA and Europe.

THG H1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong H1 performance: Revenue rose 7.2% to £828.7 million, while adjusted EBITDA more than doubled year over year to £42.8 million, reflecting growth and cost efficiencies.
• Positive Sentiment: Management expects £25 million–£35 million of positive full-year free cash flow and believes improving EBITDA and cash generation could reduce leverage to approximately 1x by 2027, with further upside from potential asset disposals.
• Positive Sentiment: Myprotein branded unit volumes increased 57% to 58.5 million in H1, with the company targeting approximately 130 million units for 2026; licensing, activewear, retail expansion and possible whey-cost relief support the path toward a 12% Nutrition EBITDA margin.
• Positive Sentiment: THG Beauty continues to gain share, adding more than 50 brands and becoming the number-one multi-brand beauty retailer on TikTok Shop; AI initiatives are showing early traction, with Beauty Assistant users reportedly 7x more likely to purchase.
• Negative Sentiment: Near-term trading includes some softness from new EU duties and the phasing of own-brand sales; Q3 constant-currency growth is expected to be approximately 2%, while the Nutrition VAT claim has been delayed by HMRC until at least the end of October 2026.

Presentation

[Matt Moulding, CEO at THG]

Good morning, and thank you for joining us for our H1 2026 results. We have delivered a very strong first half with good revenue growth, a significant step up in profitability, and a much improved free cash flow position. Just as importantly, we are seeing clear evidence that the changes we have made to the group over recent years are now delivering. This morning, I will take you through the H1 performance, the progress we are making on margins and cash flow, and the key trends shaping both Nutrition and Beauty. I will then finish with the outlook for the remainder of the year before we take questions. Before getting into the numbers, I think it is worth spending a moment on how we have arrived here. Over the past few years, we have made some significant changes to THG. Since 2022, we have materially simplified the group.

[Matt Moulding, CEO at THG]

We have sold non-core businesses, reduced our geographic footprint, and focused our resources on fewer, larger markets where we have a proven right to win. The demerger of THG Ingenuity at the start of 2025 was a major milestone in that journey. It has transformed THG from a CapEx-heavy, cash-consumptive operating model into a capital-light group focused on two market leading global businesses, THG Nutrition and THG Beauty. We have also demonstrated the significant unrecognized value within the group. The sale of Claremont Ingredients for GBP 103 million last year is a good example of this, and we continue to consider similar opportunities where they make sense. Alongside this simplification, we have been relentless on costs. Over the past 18 months alone, group headcount has reduced by approximately 25%. We continue to scrutinize our supplier base and increasingly use AI and robotics to drive efficiency across the business.

[Matt Moulding, CEO at THG]

What is particularly important is that none of this has come at the expense of growth. We have fundamentally reshaped the group while continuing to grow the top line and invest behind our strongest opportunities. Today, THG is a much simpler business. We have two market-leading digital-first businesses operating in attractive global growth markets. A lot of the heavy lifting has now been done. We are now firmly in execution mode. That brings me to the H1 results. Group revenue increased by 7.2% to GBP 828.7 million, reflecting strong momentum across the business. In Nutrition, our omni-channel strategy continues to deliver. We grew revenue across both online and offline channels, creating a broader and increasingly resilient business. In Beauty, we continue to take market share across our core territories. In the U.K., LOOKFANTASTIC and Cult Beauty delivered exceptional growth of 6.7%.

[Matt Moulding, CEO at THG]

The most important feature of H1 is the quality of that growth. Revenue growth, combined with the operational efficiencies we have delivered across the group, drove a significant improvement in profitability. Adjusted EBITDA reached GBP 42.8 million, more than double the prior year when adjusting for the disposal of Claremont Ingredients. That improvement in profitability is increasingly translating into cash. We delivered a significantly improved free cash flow position in H1, giving us confidence in the group's ability to generate sustainable positive free cash flow from here on. Cash generation remains one of our key priorities. The changes we have made to THG have fundamentally improved the cash characteristics of the group. Following the Ingenuity demerger, capital expenditure and lease payments have reduced substantially. We have refinanced our debt facilities through to the end of 2029, disposed of selective assets, reduced leverage, and lowered our cash interest costs.

[Matt Moulding, CEO at THG]

As a result, we enter H2 with real confidence in our ability to deliver GBP 25 million-GBP 35 million of positive free cash flow for the full year. That confidence is underpinned by the H1 delivery of GBP 42.8 million adjusted EBITDA, with LTM EBITDA of GBP 95.4 million. We also expect the normal seasonal working capital inflow in H2, supplemented by further initiatives to optimize stock holdings and improve working capital across the group. I also want to briefly update you on THG Nutrition's VAT claim.

[Matt Moulding, CEO at THG]

HMRC has informed us that it is dealing with a significant volume of industry-wide claims covering more than 300 products across nearly 100 brands. As a result, HMRC requires additional time to assess the accuracy of those claims and now expects to provide us with an update by the end of October 2026. Turning to Nutrition. The sports nutrition market is going through a major structural shift.

[Matt Moulding, CEO at THG]

What was once a category predominantly focused on dedicated athletes has rapidly moved into the mainstream. Consumers are increasingly focused on protein, health, and active lifestyles. Wearable technology is accelerating that trend, and GLP-1 usage is creating another significant driver of protein consumption. Against that backdrop, we believe Myprotein is exceptionally well-positioned, and the scale the brand is now achieving globally is significant. During H1, we sold approximately 58.5 million Myprotein branded products worldwide. That compares with approximately 37.2 million in H1 last year. We believe this makes Myprotein the world's number one sports nutrition brand by unit volume and by some distance, selling at least twice the number of products of our nearest global competitor. There is another important point. Despite already operating at this scale, Myprotein grew branded unit volumes by 57% in half one.

[Matt Moulding, CEO at THG]

We believe that makes Myprotein not only the largest sports nutrition brand globally by unit volume, but also the fastest-growing amongst the established global competitor set. That combination of scale and growth is incredibly powerful, and it reflects the work undertaken during 2023 and 2024 to reposition and globally rebrand Myprotein. We are now seeing the benefits of that work across multiple channels and categories. We have launched new products designed to help consumers manage the impact of whey inflation. Our expansion into adjacent categories is delivering strongly with activewear producing another standout performance in half one. Licensing also continues to grow rapidly. The strength and recognition of the Myprotein brand is enabling us to establish two-way licensing partnerships with some of the world's largest consumer groups. There is plenty more to come.

[Matt Moulding, CEO at THG]

We have a strong pipeline of new products and licensing partnerships progressing through half two, which we will announce in due course. At the same time, we have had to navigate an extraordinary whey inflation cycle. Since 2021, whey protein costs have increased approximately fivefold. That creates obvious pressure both for consumers and for industry margins. Our response has been to adapt the business rather than simply absorb those pressures. We have expanded into licensing, new categories, and trade retail while developing new cost-focused products to give consumers greater choice. Despite further whey inflation during H1, we still delivered solid margin progression. We are now also beginning to see signs of change in the whey market. Significant new supply is entering the market, and we are finally seeing evidence of stabilization together with indications of forthcoming price reductions.

[Matt Moulding, CEO at THG]

If that continues, it would provide a meaningful tailwind as we move into 2027. Combined with the structural changes we have already made to the nutrition business, this gives us increasing confidence in the trajectory towards our targeted 12% EBITDA margin. Turning to Beauty. We are fortunate to operate in another attractive global growth market, but the way consumers discover and buy beauty is changing rapidly. Premium beauty continues to grow while online continues to take share from traditional bricks-and-mortar retail. At the same time, live shopping, social commerce, and now agentic commerce are fundamentally changing product discovery. That plays directly to our strengths.

[Matt Moulding, CEO at THG]

Beauty brands increasingly need digital partners capable of reaching and engaging with younger consumers across these emerging channels. THG Beauty is already demonstrating its leadership here. I am pleased to confirm that LOOKFANTASTIC is recognized as the number one multi-brand beauty retailer on TikTok Shop for 2026. That matters not simply because of the sales generated directly through TikTok.

[Matt Moulding, CEO at THG]

Our presence across TikTok and other social platforms also drives brand awareness, attracts new customers, and ultimately generates incremental traffic back to our own websites. It creates a powerful customer acquisition engine. We intend to stay at the forefront of how the market evolves. I am also pleased to announce a new partnership with Google, with THG Beauty participating in three pilot programs over the next six months. These pilots will help ensure we remain at the forefront of how beauty products are discovered and purchased in an AI-first world. We are also benefiting from other rapidly developing consumer trends. K-beauty continues to grow strongly, while GLP-1 medication is beginning to influence beauty and wellness regimes. Being early to these trends allows us to bring new customers onto our platforms and strengthen our relevance with brand partners.

[Matt Moulding, CEO at THG]

During H1, we added more than 50 new brands across our sites, including the recent addition of prestige brand Clarins. Our proposition is increasingly differentiated. We combine deep relationships with premium global brands, leading digital capabilities, AI, social commerce expertise, and market-leading global fulfillment. Our focus in H2 is simple, continue taking share and ensure THG Beauty remains at the forefront of the digital beauty market. There is another important part of the beauty business that is sometimes less visible, our manufacturing operations. We have significant beauty manufacturing businesses in both the U.K. and the U.S., developing and manufacturing products for some of the world's leading prestige beauty brands. These operations not only generate revenue and profit, they give us valuable insight into emerging brand and product trends and deepen our relationships with global beauty partners. Our U.K. operation is the country's largest prestige beauty manufacturer.

[Matt Moulding, CEO at THG]

It delivered a stellar half one, supported by new contract wins and continued cost discipline. In the U.S., the new business pipeline remains strong. However, the business experienced delays in receiving packaging components as a result of the Strait of Hormuz issues, which constrained dispatches during half one. Those orders have not disappeared, they have merely been delayed. As that backlog is dispatched, we expect a strong Q4 from the U.S. manufacturing business. Finally, turning to the outlook. The strong H1 performance means LTM adjusted EBITDA to June now stands at GBP 95.4 million, leaving us well-positioned to deliver full-year expectations. Looking at Q3, across our core brands and markets, trading has remained encouraging with approximately 5% revenue growth achieved in July and August.

[Matt Moulding, CEO at THG]

However, we did see some softness in other parts of the business, including from the impact of introduction of EU duties, which we are in the progress of mitigating, as well as some phasing of own-brand sales. Encouragingly, September has started well. The gifting season is now underway, and we have seen a positive early customer response, including to our all-important advent calendars, where we expect to sell over 250,000 units this year. For Q3, we expect constant currency sales growth of approximately 2% with earnings and cash remaining robust. For Q4, we expect revenue growth to accelerate to approximately 6%-7%. Within Nutrition, Myprotein's branded unit volumes are expected to continue their rapid growth trajectory. Following 58.5 million units sold in half one, Myprotein remains on track to sell approximately 130 million branded units for the full year of 2026.

[Matt Moulding, CEO at THG]

Alongside that growth, our focus on cash remains absolute. We remain on track to generate GBP 25 million-GBP 35 million of positive free cash flow in the full year while continuing to grow market share and progress margins. Looking further ahead, the combination of EBITDA growth and improving cash flow through 2026 and 2027, together with the conclusion and receipt of the HMRC VAT claim, should see group net debt reduced to approximately 1x leverage for full year 2027. There is potential upside beyond that. Following the GBP 103 million sale of Claremont last year, we continue to receive third-party interest in a number of non-core assets. Should any meaningful transaction materialize over the year ahead, the group would move into a net cash positive position by the end of full year 2027.

[Matt Moulding, CEO at THG]

We also remain confident in the sustainability of our baseline divisional EBITDA margins of more than 6% for THG Beauty and more than 12% for THG Nutrition. For Nutrition specifically, improving visibility on weigh costs and continued diversification of revenues provide confidence in returning to those medium-term margin levels. Stepping back, the direction of travel is clear. We have simplified THG. We have two market-leading global businesses. We are growing revenue and taking market share, and at the same time, margins are expanding. Cash generation is improving materially, and at the same time, the balance sheet is strengthening. A lot of the hard work and restructuring is now behind us, and our focus from here is on execution. Delivering profitable growth, sustained positive free cash flow, and the significant value we believe exists within THG. Thank you all for joining us today.

[Matt Moulding, CEO at THG]

We would now be happy to take your questions.

[Operator]

Thank you. Ladies and gentlemen, if you wish to ask a question over the phone, please signal by pressing star one. Again, it is star one to ask a question over the phone. We will pause just a moment to allow you to signal. We will now take our first question from John Stevenson from Peel Hunt. Please go ahead.

[John Stevenson, Analyst at Peel Hunt]

Morning, guys. I will start on licensing if we can, on Nutrition. Obviously, going really well, particularly in the U.K., particularly with both new agreements coming on stream and existing ones are scaling well. Can you talk about the opportunities that exist to take either existing licenses into European and other territories or indeed, if there is some new relationships for licenses moving to Europe and other territories? Second question, just on those GLP-1 trends and how they impact the business. Can you talk a little bit more about what is coming through in NPD as a direct consequence of this in terms of shopping trends, both online and offline, directly down to GLP-1?

[Matt Moulding, CEO at THG]

Sure.

[John Stevenson, Analyst at Peel Hunt]

Just a quick one on the acquisition, actually, while I am on the mic. Can you talk about the state of play with any potential disposals, please?

[Matt Moulding, CEO at THG]

I missed the last question there, sorry. The state of play on—

[John Stevenson, Analyst at Peel Hunt]

Disposals.

[Matt Moulding, CEO at THG]

All right. Okay.

[John Stevenson, Analyst at Peel Hunt]

Any potential disposals.

[Matt Moulding, CEO at THG]

Yeah.

[John Stevenson, Analyst at Peel Hunt]

I know you had a—

[Matt Moulding, CEO at THG]

Yeah, sure.

[John Stevenson, Analyst at Peel Hunt]

—negotiation, but yeah.

[Matt Moulding, CEO at THG]

Yeah. Sure. Look, not easy to answer the first two, particularly because of certainly the first one around licensing, just around, A, some of the confidentiality that we have and B, giving competitors a heads-up sometimes on some of the actions that we're doing. That said, you're absolutely right that quite often what we would do with a licensing agreement, in fact, more often than not, any major licensing agreement typically starts in one territory and then gets expanded beyond that into other territories as we see the given success. What I would say is some of the major ones that you will have seen that we've announced in the past six months or more have seen really good success, right? The licensing part has been particularly strong for Myprotein, and it's strong for all parties that are involved. We bring new customers.

[Matt Moulding, CEO at THG]

We've got obviously a very big global following. These brands want to access these types of consumers, and by partnering together, we're bringing our customer base to their products. We've done that typically in the markets that we're strongest. We almost always start in the U.K., sometimes in the U.S. as well. We've got some U.S. first partnerships, particularly. Even in Asia, we have a few that are Asia-specific. But certainly, with the U.K. and the U.S., once we've launched there, we would then typically, once we've proved the success to both parties, we'll then go and roll that out. That's why you can get really good confidence in the volume growth that we're seeing around some of these licensing deals, and that's both ways. So where we license our brand out or where we license these big brands in.

[Matt Moulding, CEO at THG]

You're seeing really good progress on some of the dairy products that we have in grocers across the U.K. at the moment. You shouldn't be surprised to see if that expands into other territories, even with other brands, including existing brands. Then similarly, we've got some really big major global confectionery brands that we go into some territories with, and we should be set to expand them, too. There's a lot more of that coming. Some really interesting things as well around the licensing side, where we're targeting specific channels. We look at it from a how do we get into that channel? We think that's a really good marketing opportunity for us and a revenue opportunity, and people touch those areas every single day. Convenience is a key focus for us, and that can then go to things like coffee shops, et cetera.

[Matt Moulding, CEO at THG]

You will have seen maybe that we have done a deal with Five Guys where Myprotein product goes into the shakes in Five Guys, but that is just the start, really, scratching the surface. You should see some pretty substantial expansion across the coffee market which is a really good touchpoint for us. We are looking at all of those channels and licensing deals are one of the key ways that we will get into that. We will keep you posted on, we will announce them as we expand some of these major partnerships. Second question you asked was on GLP-1 products. Look, I think your key focus on GLP-1 is just driving mainstream into the protein market. I think to a degree, yes, we launched GLP-1-focused products, but actually, it is the education point.

[Matt Moulding, CEO at THG]

If you are a mainstream consumer and you are coming in, you are being advised you need to take protein because you are going to be deficient in it, then actually, it is the education that you need, because we have lots of products that all products that we sell would pretty much fit a GLP-1 consumer. They just need the education process of what best suits their needs. We do not sit there and directly say, "Right, that is a perfect GLP-1 product." What we will do is say, "This is something that a GLP-1 consumer in the mainstream can understand quite readily and we will address it in that kind of fashion." It is educating the mainstream market is a real focus of ours, as opposed to [Here] is that product. Then the final thing on assets, doing another Claremont.

[Matt Moulding, CEO at THG]

Look, the truth is, we have had a number of bids against a number of assets, which would be deemed as non-core to some people. We have always got strategic reasons as to why we have these things. But if the valuation is correct, then of course, and it makes sense to us, then we will go and do that. Look, there is no progress that I would give an update on here. To date, we have said no to all offers that have come in for any of our assets so far because we just do not deem that they are a fair reflection on the strength and value of them. But that does not mean that at some point in the near future, we might come with some different news on that.

[John Stevenson, Analyst at Peel Hunt]

Brilliant. That is really helpful, Matt. Thank you.

[Operator]

Thank you. As a final reminder, to ask a question over the phone, please signal by pressing star one. I will pause for a moment to allow you to signal. It appears we are currently no further questions. With this, I would like to hand it back over to Matt for closing remarks.

[Matt Moulding, CEO at THG]

Well, listen, thank you, everybody.

[Operator]

Apologies. We have a follow-up question from John Stevenson from Peel Hunt. Please go ahead.

[John Stevenson, Analyst at Peel Hunt]

Sorry, as I am the only one, wanted to go with one more, please. Just on AI and Beauty, obviously Gen AI is still pretty nascent, but it seems to be a lot more prominent in Beauty. Can you just talk a little bit about the sort of trends you are seeing there, and I guess if there is any more detail you can give on the Google trials?

[Matt Moulding, CEO at THG]

Look, I'll let Lucy, because we've got Lucy here, she can answer on some of the trends that we're seeing around agentic and the things that we're introducing. I think just to touch on the Google trials, obviously, THG PLC plugs into Ingenuity, and they've got a big partnership with Google, and Google have got a stake in Ingenuity. As they're launching products, obviously their first preference is to go to a scale player like THG PLC and get those guys live. I'll let Lucy touch on that.

[Lucy Gorman, CEO Beauty at THG]

Yeah, there's not much more we can disclose on the Google partnership in beta right now, but there'll be something coming in the next couple of months. In terms of where we're using AI within our own infrastructure and to build out the customer experience, we recently launched our Beauty Assistant, or Beauty Advisor, across both sites, and we are seeing over 1% of customers engaging with that right now. The customers who do engage with that are 7x more likely to go on and purchase. So really exciting stats, but a lot of work for us to do. We've got lots of exciting things in the pipeline as we start to build that out. We've done various testing on customer tools for things like makeup try-on, skin diagnostics, which we will look to integrate into that Beauty Advisor in the coming months.

[Lucy Gorman, CEO Beauty at THG]

In terms of what we are seeing from LLMs and how that's changing the customer journey in Beauty, up to half of customers now do a lot of their research via LLMs ahead of coming to the website. We're seeing a 4x uplift in traffic to the site that is coming referred by LLMs, albeit it's still a fairly small proportion of overall traffic. We're really well positioned as with our digital heritage and as a natively digital retailer. With all the work we've done over the many years in traditional SEO, we're really well positioned for GEO to be one of the number one mentioned retailers within the assistants and LLMs when people are asking for where to buy Beauty products and Beauty recommendations.

[John Stevenson, Analyst at Peel Hunt]

Okay, great, Lucy. Thanks for that. Yeah, it's helpful as well. Thank you.

[Operator]

Thank you. With this, I would like to hand the call back over to Matt for closing remarks. Over to you, sir.

[Matt Moulding, CEO at THG]

Okay, everybody. Well, thank you very much for taking the time this morning, and thanks to all of our stakeholders for their support over the past 12 months. Really appreciate it, and we look forward to updating you on our Q3 and Q4 performances ahead.

Participants

Executives

• Matt Moulding, CEO
• Lucy Gorman, CEO Beauty

Analysts

• John Stevenson, Analyst at Peel Hunt