THG achieved its best quarter of the year as sales edged up 1.1% to £597.9m across the golden quarter.
The business was boosted by strong sales across its beauty division including Cult Beauty and Perricone MD, which delivered growth of 2.6% to £387m in the quarter.
This is a marked improvement as beauty sales fell by 4.3% to £1.17bn over 2023.
However, sales at THG’s nutrition divison fell 3.9% over the quarter, but was flat across the year as it focused on growing profit margins.
Its beauty performance was particularly strong in the UK, with revenue growth of around 9%, as improvement in deivery times and “significant growth” in app users and new customers drove growth ahead of the market, it said.
The online retail group continued its strategy of focusing on higher margin sales, reducing the number of orders that do not hit its target profitability.
THG said it had a “much-improved” EBITDA margin and it expects full year adjusted EBITDA is expected to be above £117m, up 75% year on year.
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Sales from THG’s tech infrastructure division Ingenuity grew 8.1% over the quarter but fell 3.3% over the year, as it pivoted to “more complex, higher margin enterprise clients”.
Ingenuity unveiled a new partnership with Holland & Barrett to provide services such as automated distribution, fulfilment and courier management services for its ecommerce business.
The group said this new partnership, alongside signing up major brands including L’oreal, and PepsiCo, and expanding its parnerships with Asda and Mondelez will add £175m of incremental gross sales to its platform in 2024.
On its results, CEO Matthew Moulding said: “2023 was a year that threw up many challenges for all businesses, and I’m delighted in how the group not only responded to these challenges, but grew stronger through the year.”
“A combination of automation and significant cost initiatives delivered in 2022, in addition to a receding inflationary environment, each played a key role in the group delivering an expected record EBITDA performance after cash-adjusting items during 2023.”
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