THG reports weaker numbers in first half but sees Q3 uptick

THG’s first-half results on Thursday were in line with its guidance as the company returned to revenue growth in Q2 and saw a positive start to the second half. Not that the figures for the first six months of the year looked particularly impressive, but the company seems to be upbeat as business is moving in the right direction.

It said that “trading momentum from Q2 into Q3 continues to build positively, with the strategic model changes implemented across both THG Beauty and THG Nutrition throughout 2024 now bearing results. This momentum underpins confidence in full year and medium-term outlook”.

And it added that the successful THG Ingenuity demerger at the start of H1 alongside the Q3 disposal of Claremont Ingredients for £103 million, puts it on an “accelerated path towards a net cash position, with the H1 2025 refinancing securing long-term committed facilities”.

So let’s look at the H1 numbers and the H2 outlook with a particular focus on its Beauty ops.

THG revenue was £783.4 million, which was down 2.6% on a constant currency basis. The gross margin dipped to 41.1% from 42.6%, reflecting price impacts in its Nutrition business but is expected to return to growth for the second half. 

Adjusted EBITDA fell to £24 million from £37.1 million a year ago in line with the trading update it issued last month. The result was weighted towards Q2 with Q3 expected to be “meaningfully higher”. That comes as the company said it’s seeing its strongest trading performance of the year so far in the third quarter.

Revenue at THG Beauty dropped 5.9% in the first half on a constant currency basis and was down 12.4% on a reported basis at £479.9 million.

THG Beauty’s gross profit fell 14.8% to £190.4 million in the first half and adjusted EBITDA for the division was down 29.4% at £20.2 million, primarily reflecting the revenue and gross profit result. But this was partially offset by distribution cost efficiencies from increased UK participation. Lifecycle investment and B2B order phasing (across own-brands and manufacturing) also contributed to the change.

For H2, THG Beauty is expected to deliver revenue growth of 1%-3%.

Digging into the details of the Beauty performance, THG said that it saw “resilient retail trading with Q2 2025 UK growth at its highest rate since Q1 2024, supporting market share gains”.

The effect of withdrawing from certain sales activity in Europe and Asia, as well as various non-underlying items such as asset disposals including the luxury portfolio, contributed over 900bps of the revenue decline in H1, with these factors mainly annualising in Q3 2025.

But new brand launches drove growth and engagement, with over 70 launched year to date, including Gucci Beauty. Revenue from new brands is expected to be up 50% vs 2024 “with future personalisation developments supporting product discovery including integrating diagnostic technology and tailored product recommendations for specific looks and concerns”.

LookFantastic loyalty members continued to grow in H1, reaching 3.2 million members, “with consumer preference surging by 54% (Q1 to Q2). This reflects the ongoing strategy to develop and deploy learnings from an evolved marketing measurement framework, focused on incremental efforts, demand generation and brand tracking to drive greater brand awareness and a higher quality of recurring customer”.

CEO Matthew Moulding said: “I’m really pleased at how THG has gained momentum throughout the first half and into Q3. A slower start to the year in Beauty, alongside record whey prices in Nutrition, initially held back performance, but we saw clear improvement in Q2, in particular supported by Myprotein offline retail and licensing sales.

“As a business we’ve reaped the benefits of the recent extensive strategic initiatives across the group. Our Beauty business particularly in the UK demonstrated impressive resilience, securing market share gains in Q2, with a growing loyalty base and successful new brand launches supporting a return to revenue growth in Q3.”