British e-commerce group THG has raised its full-year profit forecast after stronger performance from its sports nutrition business helped lift investor confidence, sending its shares sharply higher on Thursday.
The company now expects adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of £103 million for 2026, above its previous expectations and market consensus. Shares jumped approximately 13% following the announcement, as investors welcomed improving profitability and the prospect of stronger cash generation.
The upgrade marks an important development for THG, which operates the Myprotein nutrition brand and the Lookfantastic beauty platform. After a period of operational restructuring and pressure on its online retail businesses, the company is seeking to demonstrate that better margins can translate into sustainable cash flow.
Nutrition Drives the Upgrade
THG Nutrition was the main contributor to the improved outlook. The division generated third-quarter revenue of £152.4 million, representing growth of 5.3% on a continuing constant-currency basis.
Myprotein also recorded a 36.2% increase in branded unit volumes, highlighting stronger demand for its products. New distribution and commercial partnerships are expected to support sales as the company enters the final quarter of the year.
Lower whey protein prices have provided an additional benefit. The external benchmark for WPC80 whey protein fell approximately 20% after THG’s September interim results, improving the potential cost outlook for the nutrition division. The company has also secured fourth-quarter supply at more favourable prices than in the previous quarter.
Beauty Division Remains Under Pressure
THG Beauty reported third-quarter revenue of £256.4 million, down 0.6% on a continuing constant-currency basis. Growth across its core brands and markets remained positive, but operational delays affected the timing of some seasonal sales.
Approximately £3 million in beauty advent-calendar sales recorded in September were not dispatched until October because of problems at a new third-party supplier. Excluding this timing effect, group revenue growth would have been stronger.
The contrast between the two divisions highlights THG’s current strategy: improving profitability through stronger performance in nutrition while addressing operational and commercial challenges in beauty.
Cash Flow Marks a Turning Point
THG expects to generate between £25 million and £35 million in free cash flow in 2026. If achieved, this would represent its first positive full-year free cash flow since its initial public offering.
The company reported third-quarter group revenue of £408.8 million, up 1.5% on a continuing constant-currency basis. Revenue for the first nine months reached approximately £1.24 billion, representing growth of 5.2%.
The fourth quarter is traditionally the company’s strongest period for sales and cash generation. Management expects revenue growth to accelerate as seasonal beauty shipments, manufacturing activity and own-brand sales contribute to performance.
What Investors Should Watch
The higher profit forecast represents a positive development, but the sustainability of the recovery remains the central question for investors.
Key factors include the pace of Myprotein sales growth, the impact of lower whey protein costs on margins, execution in the beauty division and the company’s ability to convert earnings into cash.
A successful fourth quarter could strengthen confidence in THG’s turnaround and demonstrate that operational improvements are translating into better financial performance. However, weaker consumer demand, renewed cost pressures or further supply-chain disruptions could undermine progress.
For investors, the upgrade provides evidence of improving profitability, but the longer-term investment case will depend on consistent earnings delivery, stronger cash generation and sustainable growth across both divisions.
