THG PLC, the Manchester-headquartered digital consumer brands group formerly known as The Hut Group, reported its full-year 2024 financial results and first-quarter 2025 trading update, highlighting a transformative year marked by the successful demerger of its technology platform THG Ingenuity, significant balance sheet restructuring, and a focused return to its core operating segments—THG Beauty and THG Nutrition. Despite underlying operational improvements and stabilisation efforts, the Group’s stock has continued to face downward pressure amid investor scepticism over margin quality, competitive positioning, and long-term growth visibility.
How Did THG Perform Financially in FY 2024?
THG posted total revenues of £1.94 billion in FY 2024, a 5.0% year-on-year decline compared to £2.05 billion in FY 2023. Pre-demerger revenue stood at £1.88 billion, representing a modest currency-adjusted increase of 1.1%. However, post-demerger revenues came in at £1.69 billion, reflecting the exclusion of THG Ingenuity’s contribution. Despite the topline contraction, the company delivered a marginal increase in adjusted EBITDA to £114.4 million, reflecting a margin of 5.9% versus 5.6% a year earlier.
THG Beauty emerged as the Group’s primary growth engine, recording revenue of £1.11 billion, up 3.3% year-over-year, with an adjusted EBITDA of £79.8 million and a significantly improved margin of 7.2%. In contrast, THG Nutrition saw revenue fall 11.9% to £579.8 million, with its EBITDA margin plunging to 6.0% from 13.5% in FY 2023 due to elevated promotional activity, foreign exchange headwinds, and historically high input costs for whey protein.
The Group posted a statutory operating loss of £147.9 million, sharply widening from the £39.2 million loss in FY 2023. This includes £99.9 million in non-cash adjusting items such as impairment losses from discontinued categories and onerous contract provisions. Net debt marginally improved to £215.3 million from £218.2 million, supported by a reduced capex spend of £21.1 million post-demerger and stable free cash flow generation.
What Were the Strategic Highlights and Structural Changes?
2024 was pivotal for THG as it completed the spin-off of its technology division, THG Ingenuity, in a move designed to streamline operations and realign capital toward its consumer-focused segments. The demerger enabled THG to secure a stronger financial footing, supported by the refinancing of its debt through a €445 million Term Loan B and a £150 million undrawn revolving credit facility, both extended to the end of 2029.
Following its reclassification in January 2025, THG PLC was admitted to the FTSE 250 index in March, signaling institutional confidence in its structural repositioning. Founder and CEO Matthew Moulding has also personally invested £60 million in the company to accelerate debt reduction, reinforcing his long-term commitment to restoring shareholder value.
What Are the Segment-Wise Takeaways?
How Did THG Beauty Achieve Margin Expansion?
THG Beauty delivered resilient performance through a strategic reorientation towards high-margin product categories such as prestige skincare and spa-focused lines. The division exited lower-margin segments like masstige and cosmetics, while also de-prioritising unprofitable territories in Europe and Asia. As a result, adjusted EBITDA margin improved 310 basis points year-over-year, surpassing internal guidance.
The Lookfantastic loyalty programme, LF Beauty+, now with over 3 million members, proved a valuable asset in retaining customers, who exhibited 34% higher spend than non-loyalty users in Q1 2025. UK and US markets now account for approximately 82% of online Beauty sales, with recent brand launches including Fenty Beauty and Dr Barbara Sturm aimed at driving customer engagement in premium categories.
What Drove the Weakness and Turnaround in THG Nutrition?
THG Nutrition faced severe topline pressures through much of FY 2024, primarily due to a rebrand-driven clearance of legacy inventory and adverse FX impacts in Asia. The online channel was disproportionately affected, while offline B2B retail and licensing channels continued to gain traction, with Myprotein products now present in over 20,000 stores globally.
Despite a full-year decline, the first quarter of 2025 marked a return to growth, especially in February and March, driven by strong uptake across vitamins, activewear, and functional foods. Myvitamins.com posted its strongest quarter in three years (+59.2%), reflecting a diversified customer base. Strategic offline wins included new listings with GNC and The Vitamin Shoppe in the U.S., where retail doors are expected to exceed 6,000 by year-end.
The launch of a South Korea partnership with SG Safety Corporation (CJ Group) was a major milestone, positioning Myprotein across convenience, RTD beverages, and meal replacements in one of Asia’s key wellness markets.
What Is THG’s FY 2025 Outlook and Forward Strategy?
THG reiterated its full-year 2025 guidance, projecting mid-single-digit revenue growth, underpinned by ongoing strength in Beauty and recovering volumes in Nutrition. The Group anticipates a material margin recovery in H2 2025 due to stabilisation in whey input costs, which had previously weighed heavily on profitability.
The Group’s capital expenditure is expected to decline to approximately £20 million, while lease payments and one-time cash adjustments, including demerger costs, are forecast at £22 million and £15 million respectively. Over the medium term, THG aims to restore adjusted EBITDA margins toward 9.0% while maintaining disciplined cost control and pursuing omnichannel expansion.
What Does the Market Say About THG’s Financial Health and Stock?
Despite strategic progress, THG PLC’s share price remains under pressure. As of early May 2025, the stock had fallen to GBX 25.24, marking a 10.7% decline and a staggering 95% collapse from its 2020 IPO price of 500p. This signals continued investor scepticism regarding its earnings quality, reliance on adjusted metrics, and overall business resilience.
Between 2021 and 2024, THG reported cumulative adjusted EBITDA of £413 million, but offset this with £631 million in one-off adjustments—equivalent to 153% of adjusted earnings. Analysts have flagged this as a red flag for earnings quality, particularly given the widening operating losses and frequent restructuring charges.
JPMorgan Chase & Co. maintains an “Underweight” rating, having recently revised its target price from GBX 49 to GBX 45. Panmure Liberum also cut its target price to 26p while keeping a “Hold” stance, citing concerns about weak U.S. consumer sentiment, exposure to tariffs, and delayed Nutrition recovery.
Fitch Ratings recently upgraded THG’s Term Loan B to BB-, citing improved liquidity following refinancing, but retained its long-term issuer rating at B with a “Stable” outlook, highlighting ongoing execution risk amid operational restructuring.
Are Institutional Investors Buying or Selling THG Stock?
Institutional investor sentiment toward THG remains cautious. FII/DII activity has been subdued, with no significant accumulation reported post-FTSE 250 inclusion. Market chatter suggests many fund managers are in “wait-and-see” mode, preferring clear evidence of earnings consistency and stronger cash conversion before revisiting the stock.
While CEO Matthew Moulding’s personal £60 million investment helped offset short-term scepticism, institutional flows have not materially shifted. Buy-side analysts stress the need for further margin visibility, reduced reliance on adjusted metrics, and execution of the omnichannel retail roadmap to rebuild confidence.
What Is the Broader Context and Future Outlook?
THG’s repositioning around health, wellness, and lifestyle brands places it in a structurally growing sector. However, the company continues to operate at the intersection of consumer demand volatility, input cost pressures, and digital retail disruption. Its omnichannel push through Myprotein, new licensing deals, and Beauty loyalty programmes presents meaningful upside—but execution will be key.
The business must also navigate geopolitical headwinds, including potential changes to U.S. trade policy. While management has downplayed the impact of tariffs to below £1 million post-mitigation, broader consumer sentiment effects could influence H2 2025 performance.
In the medium term, THG’s stated ambition to return to 9.0% EBITDA margins and mid-high single-digit revenue growth remains credible if its cost controls, offline strategy, and pricing discipline hold. Investors, however, await sustained proof of delivery before re-rating the stock.
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