THG sees Q4 revenue growth amid Holland & Barrett partnership

THG has reported a 1.1% revenue increase to £597m during Q4 2023, driven primarily by the beauty and ingenuity divisions.

The group’s beauty business built on “positive” Q3 exit momentum, delivering Q4 revenue growth of 2.6%. Performance in the UK (over half of total Beauty revenue) was especially strong, delivering 9% revenue growth in Q4. 

2023’s strategy of focusing on higher margin sales, reducing order volumes that do not deliver target profitability, continued into Q4. This has reduced some international order volumes in territories furthest  away from local distribution hubs, where delivery costs are higher, but has supported a stronger Beauty margin performance. 

In addition, in December the group completed the $20m (£15.8m) acquisition of US beauty brand Biossance, which was re-platformed onto Ingenuity technology on 10 January.

THG’s nutrition division experienced “strong” margin progression delivered through the year with FY23 set to be a “record” THG Nutrition EBITDA performance. Revenue from Myprotein products sold under licensing arrangements increased to over £36m. 

Performance in the UK (over 30% of THG Nutrition revenue) increased in Q4, delivering 10%  revenue growth.  The total global GMV of THG Nutrition brand sales in 2023 increased 5% YoY during the year.

FY23 continuing adjusted EBITDA expected to be above £117m, with group adjusted EBITDA over 75% higher YoY. Total revenues for the year amounted to £1.9bn. 

Matthew Moulding, CEO of THG, said: “The return to revenue growth for both our Beauty & external Ingenuity clients were clear Q4 highlights, especially given the number of changes made to their business models over the past 18 months. 

“Whilst the economic background remains uncertain there are some optimistic signs, with consumer cost of living  pressures set to ease further in 2024. We are confident that the investments and decisions made throughout the  year position the Group well to build upon the positive exit momentum.” 

The group has also announced an agreement with UK wellness retailer Holland & Barrett. 

From Q2 2024, H&B will utilise THG’s automated facilities in the UK. The three-year agreement will see THG Ingenuity become H&B’s main ecommerce UK and Ireland  operational partner, providing fulfilment and courier management services for H&B’s rapidly scaling digital business. 

Goulding added: “Holland & Barrett is one of the UK’s largest health and wellness retailers, and a major online player. We’re  delighted to be supporting their ecommerce ambitions through underpinning their operational efforts for D2C  fulfilment and courier management services, directly into their customers hands.”

Anthony Houghton, chief operating officer, Holland & Barrett, said: “Our proposed  three-year partnership with THG Ingenuity will mean we can continue to grow at pace with a partner who are  industry experts in D2C fulfilment, while we invest in transforming our supply chain capabilities.”