THG Returns to Growth in Q2 as Beauty Rebounds and Nutrition Accelerates

Well now, THG appears to be striding into the summer with a definite spring in its step. Landing just ahead of today’s AGM, this trading update paints a picture of a group finding its rhythm again after a bumpy patch, particularly for its Beauty arm. The headline? A welcome return to constant currency (CCY) revenue growth in Q2, with both key divisions showing marked improvement. Crucially, management is sticking firmly to its full-year 2025 guidance – a signal of confidence in the trajectory.

Beauty: Turning the Corner, UK Strength Shines

The narrative around THG Beauty is shifting, and it’s largely positive. Remember that -9.8% revenue decline in Q1? That’s firmly in the rearview. Q2 is expected to show a much healthier decline of just -2.0% to -3.0%. That’s a significant sequential improvement, suggesting corrective actions are gaining traction.

Retail Resilience and Strategic Exits

Digging deeper, the core Beauty retail business (the bulk of the division) is proving resilient. The standout performer? The UK, THG Beauty’s largest market, reportedly grew at its fastest clip since Q1 2024, even snagging market share (according to Circana data).

The strategic decision last year to exit lower-margin territories in Asia and Europe has been a drag, but here’s the key takeaway: that drag annualises in Q3. Meaning, from next quarter onwards, that negative year-on-year comparison disappears, effectively removing a major headwind.

Own Brands: A Timing Blip

The slight dampener within Beauty was the performance of its own brands. Revenue here was held back purely due to the timing of key customer orders. Management is clear: this is a temporary blip, and the expectation is for this shortfall to reverse in the second half of the year. No structural issues flagged.

Nutrition: Accelerating Pace, Offline Engine Firing

While Beauty recovers, THG Nutrition is hitting the accelerator. After a near-flat Q1 (+0.1%), Q2 revenue growth is projected at a robust +5.0% to +7.0%. Impressively, this marks the division’s fastest growth rate since Q1 2022.

Online Stability Meets Offline Explosion

The online engine continues to hum nicely, fuelled by strong new customer growth. But the real story here is the remarkable offline expansion. Myprotein products are now physically present in over 34,000 retail doors globally, a figure expected to balloon to ~8,400 in the US alone by year-end (up nearly 5x from 1,500 in 2024). That’s serious shelf presence.

• European Wins: Secured listings in Dutch health giant Kruidvat (900 stores).
• Asian Momentum: Landed in 7-Eleven (3,000+ stores in Taiwan/Singapore), Costco Taiwan, and entered Vietnam via Decathlon.
• US Power Plays: Major wins including Walmart, CVS, and expanded GNC distribution.

Licensing Amplifies Reach

This offline push, coupled with licensing deals, is creating a powerful flywheel. THG anticipates selling a staggering 45 million units through these non-direct channels in 2025, reaching millions of new customers. The estimated retail sales value for offline and licensed products? A cool £170 million for FY 2025. This isn’t just revenue; it’s massive brand amplification.

Costs and Tariffs: Watching, Not Worrying (Yet)

No analysis is complete without considering the bumps. Input costs, particularly milk and whey, remain elevated, though there are “some recent signs of softening.” More notably, the spectre of changing US trade policy and tariffs looms.

However, THG provides reassuring quantification: their direct exposure to tariffs is estimated at less than £1.0 million before any mitigating actions. While they are vigilantly monitoring potential ripple effects on supply chains and US consumer sentiment, the headline financial impact appears contained for now.

The Takeaway: Momentum Building, Guidance Holds

This update is unequivocally positive. THG Beauty is demonstrating a clear recovery, underpinned by UK strength and the imminent end of strategic exit headwinds. THG Nutrition is accelerating sharply, turbocharged by an incredibly successful offline and licensing strategy that’s dramatically expanding Myprotein’s reach and brand power.

The return to group CCY growth in Q2 and the unchanged FY 2025 guidance are the clearest signals yet that the operational reset and strategic bets are starting to pay off. It suggests confidence that the strong June exit rate wasn’t a fluke, but the start of a sustainable trend. One to watch closely as we move into H2.