THG, the beauty-oriented e-commerce firm, has reported an increase in third-quarter sales and kept its full-year profit guidance after the performance of its core categories remained resilient.
Over the 13-week period to 30 September, THG’s group sales rose 2.1% to £518.6m, although this compared to growth of 12.3% in the first half of its financial year.
Its most recent performance was driven by a 4.9% increase in its Beauty business to £259.7m and a 2.9% growth in Nutrition to £163.8m. The THG Ingenuity platform also managed to increase sales, up 1.3% to £51.7m, but there were weaker performances from its OnDemand unit, down 18.5% to £24.5m, and other products, which slipped 4.4% to £18.9m.
The group, which owns brands such as Lookfantastic, Cult Beauty, and Myprotein, said that average order values (AOVs) had remained stable over the quarter and its repeat rates were in line with the first half. It noted that its growth in new customers acquired through apps continued to drive higher AOVs and order frequency.
THG stated that its full-year sales and adjusted EBITDA guidance remain unchanged.
THG Chief Matthew Moulding stated that the business had experienced “another strong quarter” in beauty and nutrition, which had enabled it to grow market share in its key global markets.
“We remain committed to our strategy of supporting our customers around the globe through investment in price protection, without compromising on quality or choice.
“As commodity prices ease further, we remain well positioned to grow margins into 2023, whilst reducing pricing to consumers. This positions the group well in continuing to expand market share.
“As cost of living pressures rise, customers are continuing to prioritise beauty, health and wellness categories and, through investing in bringing them into and retaining them within the THG ecosystem, we are laying the foundations for our future growth.”
Moulding said its fourth quarter had “started positively” and the business was well positioned from a logistics and supply perspective to “meet the significant uplift in demand anticipated during the cyber period, whilst continuing to deliver a high-quality customer experience”.
Meanwhile, THG revealed that it had agreed to a new £156m banking facility with existing lenders BNP Paribas, HSBC, and NatWest. The three-year facility involved no additional covenants and Moulding said it was a “strong endorsement of the group’s long-term business model” on “highly attractive terms”.
NAM Implications:
- “As commodity prices ease further, we remain well positioned to grow margins into 2023, whilst reducing pricing to consumers. This positions the group well in continuing to expand market share”
- This combination of strategies may need some proving in practice, especially in these uncertain times…
- Meanwhile, suppliers in Beauty & Nutrition categories might benefit from checking their THG sales…
- …vs the overall THG stats above.
