THG H1 2025 results: revenue dips, Q2 turns positive, and Q3 momentum builds
THG has posted half-year numbers that are broadly in line with guidance. The headline is a modest return to Group revenue growth in Q2 at +0.9%, with management saying Q3 is the strongest trading period of the year so far. After a busy period of portfolio pruning and a major demerger, the focus is now on a cleaner story: Beauty recovery, Nutrition acceleration, and a faster march toward a net cash balance sheet.
Key numbers investors should know
| Metric | H1 2025 | H1 2024 (restated) | Comment |
|---|---|---|---|
| Group revenue | £783.4m | £848.1m | -2.6% constant currency driven by Beauty exits and mix |
| Gross margin | 41.1% | 42.6% | Whey prices the main drag, recovery expected in H2 |
| Adjusted EBITDA | £24.0m | £37.1m | Margin 3.1% vs 4.4% |
| Operating loss (continuing) | £(30.0)m | £(30.7)m | Broadly flat YoY |
| Free cash flow | £(77.7)m | £(126.7)m | Improved outflow post demerger |
| Cash and available facilities | £279.4m | n/a | Proforma +c.£103m after Claremont proceeds |
| Net debt before leases | £321.4m | £350.5m | Proforma c.£220m post Claremont |
| THG Beauty revenue | £479.9m | £547.8m | -5.9% CCY after exits and portfolio changes |
| THG Nutrition revenue | £303.6m | £300.3m | +3.1% CCY despite record whey prices |
| Adjusted EBITDA – Beauty | £20.2m | £28.6m | Lower on revenue mix and lifecycle investment |
| Adjusted EBITDA – Nutrition | £12.0m | £19.6m | Whey and JPY weakness hurt margins |
Strategy update: simplify, de-gear, and grow
Two big moves frame these results. First, the demerger of THG Ingenuity at the start of the year. Second, the agreed sale of Claremont Ingredients for £103m, completed in early September. Together with the H1 refinancing, this puts the Group on what management calls an accelerated path toward a net cash position.
The refinancing locked in long dated facilities – a €445m Term Loan B to December 2029 and a £150m undrawn RCF to May 2029. Gross debt has reduced by £374m following the refinancing and demerger. Cash and available facilities stood at £279.4m at period end, rising by roughly £103m on a proforma basis for the Claremont proceeds.
Beauty: exits mask improving core, growth back in Q3
Beauty revenue fell to £479.9m, down 12.4% YoY or 5.9% on a constant currency basis. The step back was largely self-inflicted: exits from lower margin territories in Asia and Europe, the wind-down of non-core categories such as Australian beauty and subscription boxes, and disposals like the luxury portfolio. Management says these drags mainly annualise in Q3 2025.
The UK retail engine is in better shape, with Q2 UK growth at its highest rate since Q1 2024 and market share gains cited. LOOKFANTASTIC loyalty members rose to 3.2m, and new brands – over 70 launched year to date, including Gucci Beauty – are helping engagement. Adjusted EBITDA of £20.2m reflects the lower revenue and ongoing own-brand lifecycle investment that is expected to benefit margins and mix over the medium term.
Nutrition: pricing discipline and offline push offset commodity squeeze
Nutrition delivered £303.6m of revenue, up 3.1% at constant currency. The Myprotein rebrand and a deliberate push into offline retail continue to land. The US rollout is striking – strategic listings across Walmart bring US doors to about 8,400 in 2025, from 1,500 in 2024. Myprotein is also leaning into licensing, with a two way confectionery partnership due in Q4 2025 and a multi year food-to-go brand licence from Q1 2026.
The thorn in the side is whey. Elevated commodity prices and a weak Japanese Yen compressed gross margin to 43.4% from 45.9%, dragging adjusted EBITDA down to £12.0m. Management will limit price increases in H2 to win share and build its installed base offline. They flag that any whey price relief is likely to be gradual.
Geography: UK resilient, US softer
The UK was steady at £389.8m, up 0.5% and now 49.8% of Group revenue. The US fell to £141.3m, down 21.1%, with Beauty retail conditions softer amid tariff noise and own-brand dynamics. Europe was down 3.8% to £167.0m, while Rest of World decreased 20.5% to £85.4m, reflecting the intentional exit of some Beauty markets and margin protection in Japan for Nutrition.
Profitability, cash and leverage: heading the right way, but not job done
Adjusted EBITDA of £24.0m is lighter year on year, but in line with August guidance and weighted to Q2. Distribution costs improved to 12.7% of revenue as UK mix increased and offline sales grew. Administrative costs as a percentage of revenue rose due to deliberate brand investment, though underlying salary and overheads reduced.
Continuing operations posted an operating loss of £30.0m. Statutory profit of £76.3m includes the gain on the Ingenuity demerger. Free cash outflow improved to £77.7m, helped by lower capital expenditure of £10.5m and lease repayments of £10.4m. Net finance costs were £36.7m after the refinancing. Net debt before lease liabilities stood at £321.4m, or about £220m proforma for Claremont.
Outlook and guidance: confidence into peak trading
Guidance is unchanged. Management expects:
- THG Beauty H2 revenue growth of +1.0% to +3.0%.
- THG Nutrition H2 revenue growth of +10.0% to +12.0%.
LTM adjusted EBITDA to 30 June 2025 was £70.3m, which includes roughly £5.0m of discontinued losses that will annualise out across H2. The business says both Beauty and Nutrition are in growth as H2 begins, with Advent season the strongest launch in history across LOOKFANTASTIC and Cult Beauty edits.
My take: what this means and why it matters
- Cleaner narrative after demerger and disposal – positive. Ingenuity is out, Claremont is sold for £103m, and refinancing extends maturities to 2029. The route to a net cash position looks more achievable if execution in peak season holds.
- Operational momentum is real but needs to stick. Q2 returned to growth and Q3 is flagged as the best so far. Beauty’s exits and brand investment should stop being a headwind from Q3, which helps optics and margins.
- Nutrition’s structural strategy is working. Offline retail and licensing push Myprotein into millions of new households. That creates brand equity beyond the website and should support premium positioning over time.
- Risks are not trivial. Whey prices remain elevated, the Yen trend hurts Japan economics, and US Beauty retail is wobbly. Finance costs are sizeable and free cash flow is still negative, albeit improving.
What I am watching next
- H2 trading cadence: do Beauty and Nutrition hit the +1% to +3% and +10% to +12% revenue targets.
- Gross margin trajectory: evidence of Nutrition margin rebuild despite limited pricing in H2.
- Cash generation: free cash flow improvement through peak and progress toward neutral net debt.
- US performance: stabilisation in Beauty retail and early read-through from Myprotein’s Walmart rollout.
- Execution on brand and licensing: contribution from new partnerships and the pipeline into Q4 2025 and Q1 2026.
Bottom line
THG’s half-year shows a business mid-transition that is beginning to reap the rewards of tough strategic calls. Growth has flickered back on, debt is coming down, and the pipeline for Nutrition looks lively. The near term hinges on a strong H2 delivery and some help from commodities, but the direction of travel is better. For investors, it is a story to track quarter by quarter, with leverage, gross margin and cash conversion the tell-tales of whether the turnaround sticks.
