- THG revealed that continuing turnover increased by 4.5% in the first quarter
- Revenue from the company’s beauty business expanded by 11.1% to £267.6m
THG expects first-half revenues to grow after sales were boosted by a ‘standout’ performance from its beauty division in the first three months of 2024.
The online retailer, formerly known as The Hut Group, revealed continuing turnover growth of 4.5 per cent on a constant currency basis to £455.4million for the opening quarter, compared to 1.1 per cent in the previous three months.
Revenue from its beauty business expanded by 11.1 per cent to £267.6million, which the firm credited to bumper demand in the UK and an increased focus on more profitable markets and customers.
Improved growth: THG’s continuing turnover increased by 4.5 per cent to £455.4million in the opening three months of this year, compared to 1.1 per cent in the previous quarter
THG said the ‘standout’ result offset declining trade in its nutrition arm caused by the Japanese yen’s devaluation and product availability issues, owing to the rebranding of brands like supplement maker Myprotein.
E-commerce services platform Ingenuity saw external revenue grow by 5.9 per cent to £37million thanks to multiple contract wins, including one with lifestyle brand White Stuff ahead of its relaunch in Germany.
Ingenuity’s internal revenues fell by 8 per cent to £112.6million, but this was mainly due to the discontinuation of unprofitable categories and the sale of the OnDemand division to its management team last summer.
The disposal, which included entertainment retailer Zavvi, marked the conclusion of THG’s strategy to offload non-core assets, having sold cycling equipment provider ProBikeKit to retail giant Frasers Group earlier in 2023.
THG now expects turnover growth of 2 to 5 per cent in the first half of this year and high single-digit figures in the subsequent six months.
THG shares rose 4.7 per cent to 64.9p by early Tuesday afternoon, although they remain far below their initial public offering price of 500p.
When the company debuted in September 2020 in what was the biggest listing on the London Stock Exchange in seven years, it was riding high on a Covid-induced boom in e-commerce retail.
But it has since struggled with slowing online sales, corporate governance issues, pressure from short sellers and successive profit warnings.
THG reported a £252million pre-tax loss last year, although losses more than halved from the £549.7million recorded in 2023.
To turn things around, the firm has axed thousands of jobs, expanded automation across its warehouses, and quit some loss-making businesses.
THG was founded in 2004 by Matthew Moulding and John Gallemore, who initially sold CDs, DVDs, and other entertainment products online before transitioning to selling beauty and lifestyle products.
The company’s brands range from skincare retailer Dermstore to makeup brand Illamasqua, newspaper City A.M. and movie distributor Arrow Films.
Commenting on THG’s first-quarter results, Moulding said they were ‘testament to the hard work and dedication of our people, who’ve remained focused on the task in hand despite the tough macro-economic backdrop’.
