THG manages to narrow FY23 losses, revenues drop

THG Group’s preliminary revenue declined 8.4 percent, while the group’s continuing revenue of 1,983.7 million pounds, declined 2.8 percent as the company prioritised profitable sales and territories reflected in the higher quality EBITDA. Fourth quarter revenue improved 1.1 percent.

The company said in a statement that the UK was a key growth market and international sales remained a significant portion of Group sales at 54.2 percent. Adjusted gross margin expanded to 42.8 percent, despite high levels of inflation and currency headwinds.

Commenting on the annual results, Matthew Moulding, CEO of THG, said: "In 2023, we made material progress against our strategic priorities, delivering significant profit growth following the support for our consumers through the cost-of-living crisis in 2022. This focus led to the Group delivering record EBITDA after cash-adjusting items in 2023, higher than at the peak of the pandemic."

Highlights of THG’s FY23 preliminary results

The company added that continuing adjusted EBITDA improved substantially to 120.4 million pounds, with a margin of 6.1 percent compared to January 2024 guidance of above 117 million pounds. On a reported basis, adjusted EBITDA increased to 114.1 million pounds, with a margin of 5.6 percent. Group operating loss improved to 185.4 million pounds.

THG Beauty generated revenue of 1.2 billion pounds in FY23, comprising online retail (80 percent of revenue), prestige own brand (10 percent) and manufacturing (10 percent). Within the online retail channel, over 50 percent of revenue is generated in the UK, with 20 percent in the US.

Active customers more than doubled since 2019 to 8.5 million and revenue from returning customers increased to 85 percent of online D2C revenue.

In December, the company acquired skincare brand Biossance. A selection of new clients and expanded partnerships announced during the year included: Holland & Barrett (UK ecommerce fulfilment and courier management services), Disney (media content for Shop Disney), L'Oreal (US D2C for prestige beauty brands) and Coca-Cola (UK D2C and fulfilment).