THG lifted its full-year adjusted EBITDA target to £103 million on Thursday, betting that cheaper whey and tighter working capital will deliver the group's first positive free cash flow since its 2020 listing.
The Manchester-based owner of Myprotein and Lookfantastic said third-quarter revenue rose 1.5% to £408.8 million on a continuing constant-currency basis, with nutrition sales up 5.3%. Core brands and markets, roughly 87% of turnover, grew 6.1% even as excluded regions such as parts of Asia and EU own-brand beauty contracted.
Why whey matters to the margin story
Chief executive Matthew Moulding tied the upgrade to profitability momentum in THG Nutrition. WPC80 whey prices have fallen about 20% since interim results on 10 September, the company said, and fourth-quarter whey needs are already secured below prevailing market rates for early 2027.
That commodity swing matters because protein powder is both a headline product and a cost line that can move faster than shelf prices. THG said it is still waiting for a substantive HMRC update on a £78 million VAT dispute over whether certain sports nutrition products should be zero-rated; an answer is expected by the end of October.
Cash flow and the IPO hangover
Investors have watched THG's balance sheet as closely as its top line. The company reiterated that it expects £25 million to £35 million of free cash flow in 2026, which would mark a break from years of heavy investment and acquisition spending after the IPO.
On the call to markets, Moulding highlighted omnichannel deals for Myprotein with household names including Five Guys, Krispy Kreme and Caffè Nero, part of a push beyond pure direct-to-consumer traffic. In beauty, THG pointed to YouTube Shopping affiliates and an AI beauty adviser as experiments in how shoppers discover products.
What traders are weighing this week
Shares had already rerated sharply after the statement, with the stock up double digits in early dealing as the market priced a cleaner earnings and cash story. The open question for the fourth quarter is whether advent calendar dispatch timing and Black Friday density can accelerate revenue without eroding the margin gains whey is providing.
Analysts will also track how THG handles EU duty and tariff changes the company expects to mitigate from the second quarter of 2027. For now, the narrative is simpler: nutrition margins are beating plan, and the board is willing to raise guidance rather than sit on the beat.