THG founder Matthew Moulding can’t catch a break with the City. Despite releasing a forecast-beating trading update on 13 January, shares slumped 8.8% to 41.5p by the next day.
The crash in share price came despite an initial rise in morning trading after THG released strong final quarter results for 2025. Building on a strong Q3 result, THG beat forecasts with a 7% jump in Q4 sales, thanks in part to beauty sales bouncing back from a negative Q3.
Group sales were up 6.7% in the second half of the year, well ahead of guidance for 3.9% to 5.9% growth, and capped the group’s first full year of growth since 2021.
Read more: THG finishes 2025 on a high
The lack of any upgrade to profit expectations worried investors, however, who have had a tumultuous relationship with the company – and its founder Moulding – since its IPO in 2020.
At the time, THG was the largest-ever tech float on the UK stock market, with a £1.9bn raise. But the share price fell around 80% in late 2021, and has remained subdued since, thanks to several years of difficult financial results.
Investors’ exit on Tuesday may have been prompted by doubts over the true extent of THG’s recovery.
“Despite the sales beat, full-year adjusted EBITDA guidance remains unchanged, which raises questions on the level of investments required to deliver the growth,” Panmure Liberum analyst Anubhav Malhotra said.
“We continue to feel that the group still has much to prove around its ability to deliver sustainable profitable growth and generate cash.”
Higher profits may well come, according to Peel Hunt analyst John Stevenson, with around a £30m-£40m profit opportunity as whey prices come down from recent highs.
“Ultimately, supply levels should rise to bring input prices down, as we have seen in other markets such as creatine, which is now pricing more favourably after hitting highs c18 months ago.”
THG Beauty’s return to positive sales growth, at 6.4%, is likewise a significant moment, according to GlobalData retail analyst Charlotte Chilcott.
“This improvement is notable given Beauty remained negative in Q3 and was down sharply in H1, indicating that the business is beginning to stabilise after a year of significant structural change.
“Crucially, the sale of the luxury portfolio and the decision to withdraw from certain activities in Europe and Asia accounted for much of the revenue drag in FY2025, and these impacts have now largely annualised, leaving Beauty better positioned to build on its late-year recovery.”
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