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(Sharecast News) - Nutrition and beauty brand owner THG beat its own guidance for sales and profits in the first half, with adjusted operating profits more than doubling, though shares fell as the company reported a significant revenue slowdown in the third quarter.
Group revenues totalled £828.7m over the six months to 30 June, up 7.2% over the year before and ahead of the 6.5% growth guided to at THG's AGM in June.
Adjusted EBITDA surged 109% on a like-for-like basis to £42.8m, beating its own forecasts for a result of "at least £40m", helped by the adjusted EBITDA margin rising to 5.2% from 3.1% the year before.
THG Beauty, which consists of online beauty retailers LOOKFANTASTIC, Cult Beauty, and Dermstore, delivered 5.9% revenue growth.
However, the company said the "highlight" was the THG Nutrition unit, which saw 9.2% growth or 12.1% when excluding the Asian business, where it is undergoing a strategic shift by winding down D2C operations.
Nutrition results were driven by a "stellar performance" from the Myprotein brand, according to THG chief executive Matthew Moulding, with the business on track to sell over 130m products this financial year.
"The group is now clearly reaping the rewards of Myprotein's global rebrand delivered across 2023 and 2024, alongside the expansion of the brand into licensing, activewear and higher-margin categories. Brand recognition continues to reach record highs, supporting a 57% increase in Myprotein branded products sold worldwide in H1, to 58.5m products," Mould said.
Looking ahead, the firm said revenues and adjusted EBITDA were on track to hit full-year consensus forecasts.
However, revenue growth eased to around 5% across core brands and markets over July and August, impacted by the European heatwave slowing demand. Revenues were also affected by EU duties for THG Beauty coming into place on 1 July and own-brand beauty revenues phasing into the fourth quarter and FY 2027. Over the third quarter as a whole, revenue growth is now expected to be around 2%.
"Looking ahead, we enter H2 with real momentum, whilst also acknowledging broader market challenges around consumer discretionary spend, record high whey commodity pricing, as well as recent EU tariffs," Mould said.
The stock was down around 2% at 31.08p by 0840 BST.
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