Home Money THG nutritional product sales decline as MyProtein company endures high whey price

THG nutritional product sales decline as MyProtein company endures high whey price

0 comments
Results: E-commerce retailer THG, home of skincare brand ESPA, reported lower annual sales after
  • THG’s revenue fell 3.1% at constant exchange rates to £1.9bn last year.
  • The e-commerce retailer said it was a “year of transition” for the nutrition sector.

THG has reported lower annual sales due to “well-documented challenges” affecting its nutrition business in Asia.

The e-commerce retailer behind supplement producer MyProtein revealed its revenue fell 3.1 per cent at constant exchange rates to £1.9bn last year.

Sales of nutrition brands fell 8.7 percent to £579.6 million, with the company blaming adverse currency fluctuations for contributing to difficult trading conditions across Asia.

THG Nutrition also faced a 50 percent rise in the price of whey in the past six months, according to broker Peel Hunt, which lowered its forecasts for the division on Thursday.

Manchester-based THG said it was a “transitional year” for the nutrition division, which was carrying out increased discounting activity to clear out old stock amid the MyProtein rebrand.

It noted “improving underlying trends” within the segment during the second half of 2024, especially in Britain, where licensing and retail partnerships are driving offline sales growth.

THG said: “The UK had a stronger performance during the fourth quarter (versus the third quarter), although well-documented challenges in the Asian market related to currency movements continued to weigh on trading performance in the region.”

Results: E-commerce retailer THG, home of skincare brand ESPA, reported lower annual sales following “well-documented challenges” affecting its nutrition business in Asia.

Overall nutrition-related revenue still fell 9.5 per cent to £145.2 million in the three months to December.

In comparison, THG’s beauty division, home to skincare brands ESPA and Dermstore, saw turnover rise 0.8 per cent to £348.4 million, as orders for fragrance products They soared by almost a third during the peak trading period.

Combined with cosmetics brand Lookfantastic’s higher average order value, the division’s annual sales rose 4.6 per cent to £1.1bn.

Meanwhile, THG’s loss-making Ingenuity platform posted a 16.4 percent increase in revenue before being spun off in early January.

THG decided to take the technology business private to help strengthen its finances and focus on selling beauty and nutrition products.

Its chief executive and co-founder, Matt Moulding, remains the largest shareholder in Ingenuity, whose problems he has blamed on high interest rates and dwindling capital funding from the London Stock Exchange.

Burnley-born Moulding, who founded the company in 2004 with John Gallemore, told investors on Thursday he was “impressed by the agility and resilience of the group during a year of significant change”.

He added that THG had had “several notable successes”, including expanding its partnership with supermarket chain Iceland and collaborating with Müller to develop new protein-rich yoghurts and desserts.

THG has struggled since going public in 2020, at the height of the Covid-19 pandemic, when tough in-store trading restrictions sparked a global boom in online shopping.

Massive losses, e-commerce slowdown and corporate governance issues have caused THG stock fall more than 90 per cent from its initial public offering price of 500 pence.

The company’s share price was down 3.8 per cent to 38p on Thursday afternoon.

Russ Mould, chief investment officer at AJ Bell, said: “There are no guarantees, but if the company can start to grow its revenue sustainably, it will eventually be judged on its own merits and not by the unrealistic criteria in place in that moment.” of its IPO.’

DIY INVESTMENT PLATFORMS

Easy investing and ready-to-use portfolios

AJ Bell

Easy investing and ready-to-use portfolios

AJ Bell

Easy investing and ready-to-use portfolios

Free Fund Trading and Investment Ideas

Hargreaves Lansdown

Free Fund Trading and Investment Ideas

Hargreaves Lansdown

Free Fund Trading and Investment Ideas

Fixed fee investing from £4.99 per month

interactive inverter

Fixed fee investing from £4.99 per month

interactive inverter

Fixed fee investing from £4.99 per month

Get £200 back in trading fees

sax

Get £200 back in trading fees

sax

Get £200 back in trading fees

Free trading and no account commission

Trade 212

Free trading and no account commission

Trade 212

Free trading and no account commission

Affiliate links: If you purchase a This is Money product you may earn a commission. These offers are chosen by our editorial team as we think they are worth highlighting. This does not affect our editorial independence.

Compare the best investment account for you

You may also like