THG (LON:THG) Issues Earnings Results

Key Points

• Strong first-half performance: THG’s revenue rose 7.2% to £828.7 million, while adjusted EBITDA more than doubled to £42.8 million, supported by growth and cost efficiencies.
• Improving cash-generation outlook: Management expects £25 million–£35 million in positive full-year free cash flow and believes leverage could decline to roughly 1x by 2027, potentially helped by asset disposals.
• Near-term risks remain: New EU duties and weaker own-brand sales phasing are expected to limit Q3 constant-currency growth to about 2%; shares fell despite the stronger results, reflecting concerns over tariffs and the outlook.

THG (LON:THG - Get Free Report) released its quarterly earnings results on Thursday. The company reported GBX (3) earnings per share (EPS) for the quarter, Digital Look Earnings reports. THG had a net margin of 3.15% and a return on equity of 12.75%.

Here are the key takeaways from THG's conference call:

• 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.
• 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.
• 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.
• 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.
• 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.

THG Trading Down 1.0%

THG stock traded down GBX 0.26 during midday trading on Friday, reaching GBX 27.40. The stock had a trading volume of 282,315,938 shares, compared to its average volume of 12,186,207. The firm's fifty day simple moving average is GBX 31.95 and its two-hundred day simple moving average is GBX 32.11. THG has a twelve month low of GBX 26.16 and a twelve month high of GBX 52.55. The company has a debt-to-equity ratio of 131.97, a current ratio of 0.92 and a quick ratio of 0.89. The firm has a market cap of £434.75 million, a price-to-earnings ratio of 6.85, a PEG ratio of -0.08 and a beta of 2.47.

Trending Headlines about THG

Here are the key news stories impacting THG this week:

• Positive Sentiment: THG reported first-half revenue growth of 7.2%, while adjusted EBITDA more than doubled. The improvement indicates operating leverage and stronger trading across the group. THG H1 Revenue Rises 7.2% as Adjusted EBITDA More Than Doubles
• Positive Sentiment: Myprotein supported growth following its rebrand, benefiting from continued consumer demand for sports nutrition and protein products. THG interim revenue growth supported by Myprotein rebrand
• Positive Sentiment: The Beauty division also performed well, with Lookfantastic and TikTok Shop helping drive revenue momentum in the first half. THG beauty revenue jumps as Lookfantastic and TikTok Shop drive momentum
• Neutral Sentiment: THG Ingenuity appointed a new chief executive, a management change that could support the division’s strategic development but adds an element of execution uncertainty. THG Ingenuity names new CEO
• Negative Sentiment: Management warned that new EU tariffs are expected to weigh on third-quarter results. The warning tempers the strong first-half figures and raises concerns about margins, particularly for Myprotein’s cross-border sales. UK's THG first-half profit more than doubles, warns of Q3 tariff hit
• Negative Sentiment: The shares fell even though first-half profit more than doubled, suggesting investors were more concerned about the tariff-related outlook and potentially demanding valuation expectations than the reported earnings improvement. THG shares fall despite profits more than doubling

Analysts Set New Price Targets

Separately, Jefferies Financial Group reiterated a "buy" rating and issued a GBX 60 target price on shares of THG in a research report on Monday, August 10th. One equities research analyst has rated the stock with a Buy rating and one has given a Hold rating to the company's stock. According to MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average target price of GBX 57.50.

About THG

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.