THG (LON:THG) reported what management described as a “landmark year” in its full-year 2025 results presentation, marking its first full year as a consumer-focused group following the demerger of THG Ingenuity. The company said it delivered a full-year performance ahead of guidance and market consensus, with adjusted EBITDA of GBP 76.6 million.
Management also pointed to meaningful deleveraging during the year. THG said its debt facilities have been extended to the end of 2029, and it finished the year with more than GBP 330 million in cash and available facilities, which executives said provides “real financial flexibility” going forward.
Group performance and second-half momentum
Looking ahead, THG guided to mid-single-digit group revenue growth for the full year, alongside year-on-year gross profit margin improvements “despite the current record high commodity pricing.” The company said it expects “meaningful EBITDA progression,” driven by continued sales growth, improving margins, and operating expense benefits from annualizing headcount savings and “continuing to deliver new savings in utilizing AI.”
VAT claim update and potential balance sheet impact
A major focus during Q&A was THG’s VAT claim related to the historical treatment of certain nutrition products. Management said the claim now totals around GBP 78 million, reflecting what it called a prudent approach over prior years in which THG continued to pay VAT on protein, collagen, and supplement products while “some of our competitors zero-rated products.”
In response to questions, management said HMRC has lost appeals against the “vast majority” of items included in the claims. The company stated it expects a resolution later in the year and indicated that, together with meaningful free cash flow generation, the VAT matter could broadly halve net debt by year-end.
Management also said it expects to change its VAT treatment this year and framed the timing as helpful given the sharp rise in whey prices. On potential consumer pricing impacts, executives said consumers should “over time” see some benefit, while adding that THG had already been subsidizing products to remain competitive relative to peers that had adopted zero-rating earlier.
THG Beauty: brand launches, exclusives, and U.S. focus
THG said THG Beauty has undergone a significant overhaul in recent years, creating what it called a “strong and unique platform” for revenue and active customer growth. Management highlighted a record year for new brand launches and said performance was particularly strong in its home territories, including Lookfantastic U.K., where it said it took share in both established and high-growth segments.
Among product and channel highlights, THG cited its biggest-ever new product launch—an exclusive, the Huda Beauty Lip Contour Stain—which it said drove significant engagement and traffic. The company also said its peak trading advent campaign set new records, and that 2025 was its biggest year for exclusive product launches, which management positioned as important for differentiation.
THG also said it became the biggest U.K. beauty retailer on TikTok Shop, describing the channel as strategically important for reaching the next generation of consumers. On own-brand activity, management pointed to the launch of the Biossance Eye Serum and said it invested during the year to repackage and reformulate its portfolio to remain relevant.
On geographic priorities, THG Beauty leadership said the company previously exited Asia and “significantly pulled back and right-sized” Europe. Current focus and investment are “solely on the U.K. and the U.S.” The U.S. business was described as performing strongly, with a proposition centered on “high-value clinical skincare” and a regimen-based approach that differs from what management said is offered by larger U.S. beauty retailers and marketplaces.
Executives also discussed category mix, saying THG Beauty is fairly balanced across skin, hair, and makeup, with fragrance the smallest category for the company. Management said it has grown its fragrance portfolio ahead of the market over the last couple of years, supporting growth, and described cosmetics growth as healthy. While skincare growth has moderated from pandemic-era highs, leadership said it has remained relatively strong for THG. Haircare, which management said has boomed over the last couple of years, was characterized as an area where Lookfantastic is focused on defending its leadership position.
THG Nutrition: Myprotein strategy, margins, and licensing expansion
In THG Nutrition, management said its “multi-model strategy” is driving market share growth and described Myprotein as the world’s number one sports nutrition brand. The company said Myprotein delivered nearly 10% revenue growth in the second half, despite model changes across Asia and India that initially reduced sales in those regions. Executives emphasized that new partnerships, offline and licensing growth, and category diversification are contributing to a more balanced and resilient revenue base.
Brand metrics were also highlighted, with management saying unaided brand awareness in the U.K. reached record levels and aided awareness also hit a record high following a “major rebrand” in 2025. The company said over half of its target demographic recognizes the Myprotein logo.
On offline and licensing, THG said more than 43 million products were licensed and sold into global retail during the year. In response to margin questions, management characterized licensing as “pure profit” and said offline retail was initially entered on low margins—around break-even—while the company built an install base. Executives said they expect margin improvement opportunities as that base scales.
THG also highlighted activewear as an increasingly important and higher-margin category. The company said activewear produced more than GBP 50 million of revenue in 2025 and is expected to reach a GBP 100 million sales run rate within 12 to 18 months. Management added that trading margin in activewear increased from around 42% a couple of years ago to around 60% currently, helped by scaling and product positioning.
Commodity pricing—particularly whey—was repeatedly cited as a near-term headwind and source of volatility. THG said it has a defined strategy to manage whey price volatility through procurement, diversification, and disciplined pricing, and it expressed confidence that additional supply should help normalize the market over time. Management added that once commodity pricing falls from record highs—“hopefully before the end of the year”—it expects this to have a marked impact on profitability growth beyond 2026.
On partnership activity, THG referenced a Mars collaboration, with management saying Mars products launched that week and more partnership activity is expected to roll out through the year. The company also discussed further activity in flavor-profile partnerships and indicated an increasing focus toward the U.S. market. It also referenced the rollout of a Greencore initiative and said it expects to expand in “food to go” and enter additional spaces such as ready-to-drink.
Cash flow outlook, stores, and non-core asset commentary
THG guided to free cash flow of GBP 25 million to GBP 50 million, citing broadly flat year-on-year capex, expected working capital inflows following what it described as a temporary investment in stock last year, and reduced financing costs.
On physical retail, management said it expects “steady, relatively slow progress” in opening additional Lookfantastic stores. Executives said a store can deliver a payback of around two years and estimated each store adds roughly GBP 2 million of revenue, while emphasizing that the strategic value includes brand and marketing benefits. Management also said it is exploring potential partnerships where THG could take over and rebrand existing stores operated by other players, which it described as a lower-capex approach that could accelerate store count if pursued.
Asked about the potential for further non-core asset sales following the prior sale of Claremont, management said the group includes a number of “high quality small businesses” and that it has received interest and bids, but it is not looking to sell assets unless it receives what it considers a proper valuation. Management added that if an asset sale were completed alongside the VAT resolution, it believes the company could potentially reach a net-debt-free position.
About THG (LON:THG)
THG (www.thg.com) is a global innovator revolutionising how brands connect to a worldwide consumer base. We are transforming how consumer brands go to market in the digital age.
We have built a portfolio of leading digital beauty, health, wellness, and sports nutrition brands that are capitalising on the global growth opportunities, supported by the accelerating consumer shift to the e-commerce channel.
THG is home to three key divisions: Beauty, Nutrition, and Ingenuity. All brands, whether in-house or third parties are powered by our complete commerce division Ingenuity, which is a flexible and scalable offering formed of a combination of complex e-commerce technologies, physical assets, infrastructure, and brand building capabilities.
THG Beauty is home to leading online pure-play retailers for prestige beauty products and brings together global online multi-brand retail subscription boxes, owned prestige brands along with production and innovation.
