THG jumps as Q3 sales rebound on Beauty and Nutrition acceleration; guidance kept

Investing.com -- THG delivered its strongest organic quarterly sales increase in four years, with third-quarter revenue rising 6.3% on a constant currency basis to £405.2 million.

That marks a 2.4% year-on-year increase after a 2.6% decline in the first half, putting the group back on a growth trajectory and on course to meet full-year targets.

Shares in THG jumped more than 5% in London trading. 

THG Beauty generated £258.2 million in revenue, down 1.2% year-on-year but up 4.2% when currency effects are excluded. Beauty returned to growth helped by a record Advent calendar launch and double-digit gains at Lookfantastic, though softer momentum in own brands and U.S. retail limited the upside.

THG Nutrition advanced 9.3% to £147 million, or 10% on a constant currency basis, supported by higher prices, online expansion, new retail partnerships and product rollouts.

The company said the third-quarter performance “positions the group favourably” against its second-half guidance range. Full-year expectations remain unchanged.

CEO Matthew Moulding described the performance as “solid”, adding that progress was “a direct result of the strategic initiatives and operational change we have implemented, and we are well positioned for the key trading period ahead”.

Jefferies analysts said the update showed “a robust Q3” with both Beauty and Nutrition delivering further momentum. They highlighted that Beauty’s constant currency growth of 4.2% compared with guidance of 1-3% for the second half, marking a clear sequential improvement from -10% in the first quarter and -2% in the second.

The broker also flagged strong underlying trading in the U.K. Beauty business, with Lookfantastic posting “impressive double-digit growth”.

On Nutrition, Jefferies pointed to the 10% growth rate as matching the upper end of management’s second-half guidance. They said this was driven by “selective product pricing”, expansion across Amazon and TikTok channels and a 50% increase in subscription activity.

The analysts added that the group’s multi-channel strategy, including new listings in 2,500 CVS stores in the U.S., is helping widen the customer base and improve brand reach.

"We see growing evidence the group’s strategic initiatives are translating into trading momentum," analysts wrote. "Buoyed by this, FY26 should see THG demonstrate its potential - we anticipate both Beauty and Nutrition will be in robust growth, and this should drop through to a year of strong cash generation."

Jefferies keeps its estimates unchanged and expects THG to deliver EBITDA of £75 million this year, rising to £100 million in 2026, with net debt projected to fall below £200 million next year.