THG has retained its annual profit outlook noting sales were “gradually improving” in the second half, despite posting a drop in operating losses.
The online retailer said its losses deepened 11% to £99.5m in the six months to 30 June 2022, due to £26.2m one-off, non-cash charge related to the sale of its loss-making discontinued categories and non-core assets. Without this charge, operating loss improved by £15.9m.
Group sales fell 9.3% over the period to £969.3m, dragged down by a 14.9% drop from its Ingenuity arm to £320m and 10.4% fall in its beauty business to £538m.
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THG blamed the sales drop on the “de-emphasis in certain beauty markets and the proactive pivoting of the THG Ingenuity strategy”.
It said it expects its full-year revenue from its continuing operations to come in flat or drop by up to 5% due to sales trends “gradually improving” in the second half, thanks to an uptick in its Beauty and Ingenuity businesses.
THG CEO Matthew Moulding said: “Inflationary pressures provided significant challenges to consumers and businesses alike over the past 18 months.
“Our strategy of supporting our consumers through 2022, sacrificing margins in the short-term, is bearing fruit.”
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