THG: Growth continues after strong performance from beauty division
THG, the owners of Cult Beauty and Myprotein, recorded strong revenue growth in the first quarter of 2024, it told markets this morning.
The company, which also owns Morning Wire, reported continuing currency revenue growth of 4.5 per cent in the first three months of 2024 compared to the same period in 2023.
Growth came in particular from THG Beauty, with continuing revenue growth of 11.1 per cent on the year.
Total revenue across the business was up 0.3 per cent on a continuing basis, at £459.9m for the first quarter.
The Manchester-headquartered business said its “strategic focus on higher-margin sales” last year had paid off.
The outfit hailed “notable strong momentum in beauty offsetting continuing currency headwinds.”
THG Beauty, which delivered significant year on year growth, saw “notably strong” UK performance and the firm said the addition of US outfit Biossance to the THG stable had the potential to “scale to become one of our largest own brands” after early “positive” signs.
Expectations and guidance remained static, with group revenue growth anticipated to be in the range of 2 to 5 per cent on a continuing basis.
CEO Matthew Moulding said: “Following the Group’s return to revenue growth in Q4 2023, it’s pleasing to report an acceleration in Q1, which is testament to the hard work and dedication of our people, who’ve remained focused on the task in hand despite the tough macro-economic backdrop.
“It’s also clear that the accelerated infrastructure investments made during 2019-2022, specifically into our fulfilment network and tech capabilities, are playing a significant part in delivering competitive advantage. With this major capex program behind us, these investments will continue delivering meaningful savings, which accelerate further as new Ingenuity partners are onboarded,” he continued.
“The Q1 performance of our largest business THG Beauty, is especially encouraging. The operating model changes made throughout 2023, including focusing on more profitable territories and customers, temporarily impacted growth for much of last year, however, since Q4, we are seeing tangible benefits from these actions. This is reflected in THG Beauty’s loyalty membership reaching 2.3m people at the end of Q1, less than two years after launch.”
The beauty division, he said, had a high-quality loyal customer base “bringing greater profitability per order across a more efficient cost base.”
“Ingenuity, having pivoted towards larger, multi-service partners, is now also seeing the benefits of its own model changes. Another quarter of solid external revenue growth at +5.9%, is underpinned by monthly recurring revenue growth of +26.3%,” he said.
“The response to the Myprotein elevation rebrand has been fantastic. While these changes naturally impact short term revenues as old and new branded products are swapped out, the strong positive response from online consumers and offline retail partners alike underpins confidence once full product availability is restored.”