THG PLC’s recovery story is gaining credibility, with Jefferies arguing the group is now “well set” for a year of growth and cash generation after a solid first quarter.
The broker said the update on Tuesday was “another robust quarter”, marking a fourth consecutive period of revenue growth and reinforcing the trajectory outlined at full-year results last month. Sales rose 7% in the first quarter, with beauty up 6% and nutrition up 9%, or 12% excluding Asia.
Jefferies highlighted strength in beauty, led by Lookfantastic and a stronger US performance, alongside improving customer metrics. In nutrition, growth was described as broad-based, supported by expansion into higher-margin categories such as activewear and supplements, helping offset pressure from elevated whey costs.
Analysts left forecasts unchanged, pointing to expected EBITDA growth of around 30% this year and continued improvement in free cash flow.
Importantly, they said the latest update provided further evidence that THG has moved beyond its restructuring phase. After several years of declining sales, the group is now delivering consistent top-line growth, with improving profitability and a more focused business model.
The broker retains a 'buy' rating with a 60p price target, implying significant upside from current levels.