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THG remained in growth in the third quarter amid resilience in its beauty, health and wellness categories, though sales momentum slowed considerably in its third quarter.

Total sales were up 2.1% in the third quarter to £518.6m, compared to growth of 12.3% in the first half of its financial year.

The THG Beauty and THG Nutrition saw growth of 4.9% and 2.9% respectively, with revenues in core territories up 10.2% in the categories over the period.

The group said that consumer behaviour during the third quarter remained “stable and consistent, reflecting the resilience of beauty, health and wellness categories”.

It say stable average order values (AOV), repeat rates in line with the first half and growth in new customers acquired through apps continuing to drive higher AOVs and order frequency.

THG Ingenuity commerce revenue was up just 5.9% to £12.3m. The group said Ingenuity has re-positioned under CEO Vivek Ganotra to focus on larger, higher contract value clients, with a strong and growing pipeline of these opportunities in addition to expanding propositions across the existing client base.

Year to date group revenue growth of 8.8% is in line with expectations, supporting 2022 revenue growth guidance of 10% to 15% which remains unchanged. Full year adjusted EBITDA guidance was also maintained between a range of £100m to £130m (pre software-as-a-service cost reclassification).

CEO Matthew Moulding commented: “Another strong quarter of delivery across our Beauty and Nutrition divisions has enabled market share growth in our key global territories. We remain committed to our strategy of supporting our customers around the globe through investment in price protection, without compromising on quality or choice. As commodity prices ease further, we remain well positioned to grow margins into 2023, whilst reducing pricing to consumers.

“This positions the Group well in continuing to expand market share. As cost of living pressures rise, customers are continuing to prioritise beauty, health and wellness categories and, through investing in bringing them into and retaining them within the THG ecosystem, we are laying the foundations for our future growth.

“The fourth quarter has started positively, and we are well positioned from a logistics and supply perspective to meet the significant uplift in demand anticipated during the cyber period, whilst continuing to deliver a high-quality customer experience.

Meanwhile, THG has agreed a new £156m banking facility with existing lenders BNP Paribas, HSBC, and NatWest.

The three year facility involved no additional covenants and Moulding said it was a “strong endorsement of the group’s long-term business model” on “highly attractive terms”.

THG shares has jumped 18% to 55p this morning on this morning’s update.

Morning update

The FTSE 100 has slipped 0.3% to 6,990.4pts so far this morning.

Along with THG, other risers include Just Eat Takeaway.com, up 4.9% to 1,384.2p, PayPoint, up 3.5% to 591.9p and Glanbia, up 2.7% to €11.52.

Fallers today include Deliveroo, down 2% to 82.5p, FeverTree, down 1.7% to 929p and Naked Wines, down 1.5% to 108.4p.

Yesterday in the City

The FTSE 100 was back above 7,000pts for the first time in three weeks, rising 0.6% yesterday to 7,013.9pts as Rishi Sunak was confirmed as Prime Minister.

Risers included Hotel Chocolat, up 3.5% to 134p, Finsbury Food Group, up 3.2% to 88.5p, Coca-Cola Europacific Partners, up 2.5% to €46.75, Premier Foods, up 2.3% to 99.2p and DS Smith, up 1.8% to 286.1p.

Fallers included Naked Wines, back down 12.3% after last week’s gains to 110p, THG down 5.4% to 46.5p ahead of this morning’s update, McBride, down 4.2% to 23p, Greencore, down 4% to 64.1p, Hilton Food Group, down 2.1% to 598p and Just Eat Takeaway.com, down 1.6% to 1,319p.

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