THG Reports Strong H1 Growth and Record Free Cash Flow, Reiterates Full Year Guidance

THG AGM trading statement shows stronger growth, better cash flow and steady full-year guidance

THG has used its AGM trading statement to tell investors that the first half of 2026 is going better than the same period last year. The headline numbers are solid: H1 revenue growth of about 6.5%, or 7.6% excluding THG Nutrition Asia, plus at least £40 million of H1 Adjusted EBITDA.

That matters because Adjusted EBITDA – a profit measure before interest, tax, depreciation and amortisation, with certain items stripped out – is improving much faster than revenue. When profits are rising faster than sales, it usually points to better cost control, stronger margins, or both. In THG’s case, management says it is being driven by disciplined costs, stable gross margins and targeted expansion in the right categories.

Key metric	Reported figure	Why investors care
H1 2026 revenue growth	c.+6.5%	A clear improvement from H1 2025, when revenue fell by 2.5%
H1 2026 revenue growth excluding THG Nutrition Asia	+7.6%	Shows the core business is growing faster than the headline suggests
H1 2026 Adjusted EBITDA	At least £40 million	Management says this is about 95% higher year-on-year, adjusting for the Claremont Ingredients sale
LTM Adjusted EBITDA to May 2026	c.£94 million	Up from £68.9 million, showing a stronger earnings run-rate
Free cash flow	Strongest H1 since 2021	Cash generation is improving, although the exact figure was not disclosed
THG Nutrition revenue growth excluding Asia	c.+11%	Suggests Asia is masking better underlying progress elsewhere
Licensed product sell-in expected in FY 2026	More than 60 million units	Up from 43 million in FY 2025, showing strong retail momentum

Why this THG update looks positive for retail investors

The biggest positive is that THG has reiterated full-year guidance. In plain English, management still expects full-year revenue, Adjusted EBITDA and cash to land in line with company consensus. That is usually the bit the market watches first, because it tells you whether trading has stayed on track or slipped.

There is also a quality angle to this update. THG is not just saying sales are up – it is saying margins are expanding and free cash flow is improving too. Revenue growth without cash can be flimsy. Revenue growth with stronger profitability and better cash flow is much more convincing.

The debt market is also sending a helpful signal. THG says its Term Loan B is trading above par in H1 2026 for the first time since it was issued in March 2025. Above par simply means the loan is trading above its face value, which usually suggests lenders are increasingly comfortable with the company’s outlook and credit profile.

THG Beauty performance: skincare, Lookfantastic and TikTok Shop are doing the heavy lifting

THG Beauty seems to be in decent form, especially in skincare. The company said skincare was up 9.2% year-to-date, and Lookfantastic continues to outperform the UK prestige beauty market.

That is encouraging because beauty investors want to see not just growth, but growth in categories with strong customer loyalty and repeat purchase behaviour. Skincare tends to fit that bill better than more trend-driven categories.

THG also pointed to new brand launches including Dyson, BEAME and Dr. Loretta. On top of that, it highlighted improving brand awareness and consideration following ambassador activity, including the Olivia Attwood launch. Those brand metrics will not mean much on their own, but they do support the broader message that customer acquisition is still working.

One standout number here is Lookfantastic’s TikTok Shop performance, with revenue growth of about 48% year-on-year in Q2. Social commerce is still a relatively young channel, so that sort of growth is useful evidence that THG is adapting to where younger shoppers are actually buying.

THG Nutrition and Myprotein: strong volume growth, but Asia is still a complication

THG Nutrition also looks strong underneath the bonnet. Myprotein delivered year-to-date unit growth of 60%, helped by retail expansion and more product categories. THG also said about 18% of direct-to-consumer customers bought activewear in May 2026, which hints at better cross-selling beyond core supplements.

The group is also trying to defend profitability in the face of very high whey costs. Whey is a key ingredient in protein products, so inflation there can squeeze margins. THG says it is offsetting that pressure through product mix, pricing and expansion into higher-margin areas.

The Asia point needs a closer look. THG says it is intentionally pivoting in Asia towards licensing with local manufacturing and distribution partners. That seems to be holding back reported revenue now, but management argues it should create a structurally higher-margin model as it scales. Excluding Asia, THG Nutrition revenue growth was about 11% in H1 2026, which is a good deal better than the group-wide figure.

There is more evidence of momentum in retail channels too. Licensed product sell-in – meaning products shipped into retail partners – is expected to exceed 60 million units in FY 2026, up from 43 million in FY 2025. The ready-to-drink category in UK retail is leading that push, and Myprotein plans to enter energy, protein water and breakfast in H2 2026.

That matters because it broadens the brand beyond tubs of protein powder. A wider convenience offering can support more frequent purchases and reduce dependence on one category.

THG margins, cash flow and lender confidence are the real story here

The most important line in this RNS may be the least flashy one: H1 2026 free cash flow is expected to be the strongest since 2021. Free cash flow is the cash left after operating costs and capital spending, and it is what ultimately helps fund debt reduction, investment and balance sheet resilience.

THG did not disclose the exact H1 free cash flow figure, so investors will need to wait for fuller results to judge just how strong it was. Still, pairing that statement with LTM Adjusted EBITDA of about £94 million, up from £68.9 million, gives a clear message: this business is becoming more cash generative.

For a company that has spent years battling scepticism around profitability and leverage, that is significant. Debt trading above par does not solve everything, but it does suggest the credit market is seeing less risk than before.

THG VAT claim could be upside, but it is still unresolved

THG also repeated that it has submitted retrospective VAT claims of about £78 million to HMRC relating to certain protein powders and supplements. This follows the Sun Warrior ruling, and THG says the Upper Tribunal earlier dismissed HMRC’s right to appeal.

That sounds promising, but investors should treat it as potential upside rather than money in the bag. HMRC was expected to respond in late Spring 2026, but that response has not yet been received. Until there is a substantive reply, the timing and outcome remain uncertain.

What looks good, what still needs watching in THG shares

Positives from the THG AGM update

• Revenue growth has swung back into positive territory at c.+6.5%.
• Adjusted EBITDA is rising faster than sales, with H1 at least £40 million.
• Free cash flow is the strongest for a first half since 2021.
• THG Beauty and Myprotein both appear to be executing well.
• Full-year guidance has been reiterated.
• The Term Loan B trading above par suggests better lender confidence.

Risks and softer spots investors should not ignore

• Whey commodity inflation remains a real pressure on nutrition margins.
• Asia is still a drag on reported nutrition growth during the licensing transition.
• The exact H1 revenue, profit and free cash flow figures were not fully disclosed.
• The VAT claim is unresolved and should not be counted on yet.

My take on what this THG RNS means for shareholders

This is a good update. Not spectacular, not transformational in one go, but good in the way investors tend to prefer: better revenue growth, much better earnings momentum, stronger cash flow and no downgrade to guidance.

The cleanest takeaway is that THG seems to be moving from a story about potential to a story about delivery. Beauty is growing, Nutrition is broadening out, and the group is showing more evidence that sales can turn into cash. If THG can keep that going through the second half, this update could end up mattering more than the market gives it credit for on day one.

The main thing I would still watch is whether the Asia licensing shift and whey inflation continue to cloud the picture. But based on this RNS alone, the balance of news is positive.