The immediate problem is the new EU customs regime, which has increased the cost of low-value cross-border e-commerce orders. THG said quarterly growth was expected to slow to around 2%, blaming a combination of new European import tariffs, lower demand during the summer heat and the timing of some cosmetics sales.
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While management expects economic growth to rebound to 6-7% in the fourth quarter, the warning served as a reminder that the group’s recovery remains vulnerable to external shocks.
This caution has overshadowed what were, by most measures, encouraging numbers. Revenue rose to £828.7m in the six months to June, ahead of the company’s forecasts, while adjusted profit rose to £42.8m. Adjusted margins increased from 3.1% to 5.2%, indicating that years of restructuring are beginning to yield operating benefits.
Much of the progress has been driven by THG Nutrition and its Myprotein brand, which has become the engine of the business. The division’s constant-currency revenue increased 9.2% and earnings grew more than three times the company’s preferred standards. Management pointed to pricing initiatives, broader product offerings, licensing agreements and increased sales through third-party retailers rather than relying solely on direct online sales.
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The focus on profit rather than growth at all costs marks a significant shift for a business that has spent much of the last decade building scale and expanding into new markets. Since 2022, THG has sold non-core businesses, reduced its geographic footprint and reduced its headcount.
The demerger of THG Ingenuity, its technology and logistics arm, in early 2025 eliminated a capital-intensive business that many investors believed was overshadowing the performance of the group’s core brands.
Today’s results show the strategy is starting to pay off for the company, which counts entrepreneur Sir Tom Hunter among its prominent backers. However, it would be premature to talk about the completion of reforms.
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THG continued to report a statutory operating loss of £10.6m, with net debt rising to £329.7m. While free cash flow improved and management reiterated its full-year guidance, investors have heard promises of future progress before.
The big question is whether one of the UK’s most ambitious digital retail groups can finally deliver sustainable shareholder returns, taking THG to the status of a mature consumer brands business rather than a perpetual restructuring story.
The figures for the first half of the year provide compelling evidence that the transformation is working. However, the market reaction – shares fell more than 13% in afternoon trading – suggests investors remain unconvinced.