Weakness in beauty sales is affecting THG's revenue, but there's evidence of nutrition division's recovery
THG's Kickback in Q1: Weaker Beauty Sales, Nutrition Bounceback
The Hut Group (THG) takes a hit as first-quarter sales dwindle, with its beauty business faltering while nutrition shows signs of recovery. The e-commerce powerhouse, responsible for Cult Beauty and Myprotein brands, reported an 8% drop in overall revenue to £375.6 million, as cited by THG's first-quarter earning report.
Sales within the beauty sector plummeted by 9.8% to £223.6 million. A decline in the Easter weekend revenue last year, occurring in late March, and pulling back on sales activities in certain markets to prioritize high-margin customers contributed to the drop.
Meanwhile, sluggish demand for beauty products counteracted the boom in nutrition-related sales in February and March due to a surge in UK online customers. The nutrition division's revenue dropped 8.7% to £579.8 million, marking a decrease in 2024 following hefty discounts to liquefy stock during a rebranding phase.
In attempts to streamline operations, THG spun off its loss-making technology platform Ingenuity in January. Consequently, the company's overall revenue for 2024 contracted more than £100 million, plummeting to around £1.9 billion. Post-demerger sales, however, dipped a mere 0.4% to £1.7 billion.
Despite these setbacks, THG remains optimistic as it refocuses on its Beauty and Nutrition divisions. THG CEO and co-founder, Matthew Moulding, expressed pride in each business' progress and highlighted the changes they've undergone and the successes they've achieved.
Amid ongoing struggles with mammoth losses, sluggish online trade, and governance concerns, time will tell whether THG can claw its way back to solid financial footing.
#### Additional Info
Growth Challenges in Beauty and Nutrition Sectors:
The beauty market, hit hard by the pandemic and saturated competition, has witnessed a sluggish recovery in 2025. THG's beauty division, though weathering the storm, has struggled to maintain growth and generate consistent revenue.
In the nutrition division, lower-than-expected performance in Asia persisted throughout 2024 due to weak online sales and decreased demand for sports nutrition products. However, the division managed to return to growth in the first quarter of 2025, spurring hope for a rebound.
Streamlining Operations:
The demerger of Ingenuity allowed THG to focus on its core businesses and bolster finances while simplifying its operations. Following this move, THG finalized a debt refinancing deal, raised equity, and entered the FTSE 250 index.
- THG's CEO and co-founder, Matthew Moulding, is focusing on the Beauty and Nutrition divisions, acknowledging the progress and changes they've undergone, as well as the successes they've achieved.
- In Q1, THG's nutrition division, which includes the Myprotein brand, showed signs of recovery, marking a return to growth after a decline in 2024, despite lower-than-expected performance in Asia.
- To streamline operations, THG demerged its loss-making technology platform Ingenuity in January, which led to a contraction in overall revenue for 2024 by more than £100 million, but post-demerger sales only dipped slightly.
- Despite the 8% drop in overall revenue to £375.6 million, THG remains optimistic about its financial future, looking to overcome ongoing challenges in the beauty and nutrition sectors caused by factors like the pandemic and saturated competition.
- In addition to refocusing on its core businesses, THG has taken steps to bolster its finances, finalizing a debt refinancing deal, raising equity, and entering the FTSE 250 index, indicating strategic investments for future growth in the finance and business sectors, leveraging technology for efficiency.
