THG revenue down despite September recovery

THG, the owner of Cult Beauty and Lookfantastic, has reported its best quarterly performance in the last year despite a drop in revenue. 

The group saw revenue decrease 4.4% to £466.5 million during the third quarter ending 30 September 2023.

For Q3, THG also shared the following division results:

• THG Beauty revenue down 4.4% to £272 million.
• THG Nutrition revenue down 4.6% to £156.2 million.
• THG Ingenuity revenue down 8.8% to £155.7 million.

However, revenue performance improved each month during the quarter and the group's outlook for FY23 remains unchanged.

Each division continued to make progress against its strategy to return to sales growth and rebuild margins.

The impact of global de-stocking on its beauty manufacturing business eased, supporting a return to growth for THG Beauty in September.

"The strategy of focusing on higher margin sales while reducing orders that do not deliver an immediate return has supported a much-improved Q3 margin performance," it added.

Growth in UK active customers in THG Beauty and THG Nutrition was supported by investment in the customer proposition with extended next-day delivery cut-offs and UK delivery times at their fastest ever level (17% quicker than Q3 2021).

Matthew Moulding, CEO of THG, said: "The momentum with which we exited Q3 was especially pleasing, with the group returning to positive constant currency revenue growth of 3.2% in September, driven by a strong performance across our beauty division.

"Both our operations and inventory are well positioned ahead of peak trading, with the benefits of our investment in UK and US automated fulfilment centres enhancing the customer proposition through accelerated delivery times, positively influencing customer contact rates and overall satisfaction.

"The group is exceptionally well invested with a strong balance sheet, with each division well positioned to grow market share in any market conditions."