THG PLC (LON:THG) maintained full-year guidance even as first-quarter performance surpassed expectations.
The online retailer said that following a strong end to 2020, momentum continued into the new year, with sales surging 58% in the three months ending 31 March.
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It also reckons that demand for e-commerce will remain strong even once COVID-19 restrictions are lifted across its markets, thanks to a broader product range and availability, greater product education with thousands of user-generated and professional posts accessible immediately online, as well as greater convenience and payment options.
Ingenuity, the group’s third-party digital commerce platform, reported a 188% sales increase in the quarter.
The firm maintained forecasts of 30%-35% revenue growth this year, which were upgraded in January following the acquisition of Dermstore.com in late December.
With Dermstore.com in the portfolio, US sales are expected to account for a fifth of the total.
Capital expenditure is expected to be 10-12% of revenue, compared to 15% in 2020, while guidance for M&A activity was increased to £250mln to fund expansion plans.
During the quarter it acquired specialist recycler of plastics Indigo Environmental for £4mln and tree planting and carbon off-set platform Eco Credits for £500,000.
The group is about to open its ICON studios close to its Manchester Head Office, where 2,000 people will video production and photography for THG brands and Ingenuity clients.
In the year to 31 December, group revenue climbed 41% to £1.6bn with adjusted underlying earnings (EBITDA) surging 35% to £151mln and gross margin of 45.2%.
THG swung to a £282mln net cash position from £431mln debt in 2019, although it made an operating loss of £482mln because of £331mln share-based impairment charges, £105mln write-offs of assets, IPO fees and covid-related costs.
THG OnDemand revenue surpassed £100mln for the financial year, representing +69.1% growth year-on-year as personalisation and print on demand services were increasingly sought after by consumers and brand owners, while Ingenuity Commerce jumped 160% to £19mln.
Shares dipped 1% to 697.5p on Thursday morning.