UK Performance Strong, US Acquisition Boosts Beauty Business
- THG reports Q4 revenue growth of 1.1% to £597m driven by beauty and ingenuity divisions
- UK performance strong with 9% revenue growth in Q4
- Focus on higher margin sales reduces international order volumes
- Acquisition of US beauty brand Biossance for $20m
- THG Nutrition revenue up 5% YoY, EBITDA expected above £117m
- CEO Matthew Moulding confident in investments and decisions made throughout the year
- Partnership with Holland & Barrett for ecommerce services from Q2 2024
THG has reported a 1.1% revenue increase to £597m during Q4 2023, driven primarily by the beauty and ingenuity divisions. The group’s beauty business built on “positive” Q3 exit momentum, delivering Q4 revenue growth of 2.6%. Performance in the UK (over half of total Beauty revenue) was especially strong, delivering 9% revenue growth in Q4. THG focused on higher margin sales and reduced some international order volumes due to high delivery costs. In December, the group completed the $20m acquisition of US beauty brand Biossance, which was re-platformed onto Ingenuity technology on 10 January. THG’s nutrition division experienced “strong” margin progression with FY23 set to be a “record” THG Nutrition EBITDA performance. Revenue from Myprotein products sold under licensing arrangements increased to over £36m. Performance in the UK (over 30% of THG Nutrition revenue) increased in Q4, delivering 10% revenue growth. The total global GMV of THG Nutrition brand sales in 2023 increased 5% YoY during the year. FY23 continuing adjusted EBITDA expected to be above £117m, with group adjusted EBITDA over 75% higher YoY. CEO Matthew Moulding said: “The return to revenue growth for both our Beauty & external Ingenuity clients were clear Q4 highlights, especially given the number of changes made to their business models over the past 18 months. The group has also announced an agreement with UK wellness retailer Holland & Barrett. From Q2 2024, H&B will utilize THG’s automated facilities in the UK. The three-year agreement will see THG Ingenuity become H&B’s main ecommerce UK and Ireland operational partner, providing fulfilment and courier management services for H&B’s rapidly scaling digital business.
Factuality Level: 10
Factuality Justification: The article provides accurate and objective information about THG’s financial performance, including revenue growth, strategic decisions, and partnership with Holland & Barrett. It includes specific numbers and quotes from relevant sources, and does not include any irrelevant or sensational details.
Noise Level: 3
Noise Justification: The article provides relevant information about THG’s financial performance and strategic partnership with Holland & Barrett, but lacks a broader analysis or context on the industry trends or implications of these events.
Financial Relevance: Yes
Financial Markets Impacted: THG’s stock price and the e-commerce and beauty/nutrition industries
Financial Rating Justification: The article discusses THG’s financial performance, including revenue growth, EBITDA expectations, and a partnership with Holland & Barrett for fulfilment services. This information is relevant to investors and can impact the company’s stock price and related industries.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article, but the company THG reported a 1.1% revenue increase and some positive business developments.
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