THG (HG0) AI Stock Analysis

Company Guidance

For the full year, THG expects 25% to 35% of positive free cash flow, with £25 million to £35 million of positive free cash flow, while continuing to grow market share and progress margins; for Q3, it expects constant currency sales growth of approximately 2% with earnings and cash remaining robust, after approximately 5% revenue growth achieved in July and August, and for Q4, it expects revenue growth to accelerate to approximately 6% to 7%. Myprotein remains on track to sell approximately 130 million branded units for the full year of 2026, following 58.5 million units sold in H1, and the group expects to sell over 250 thousand advent calendar units this year. The combination of EBITDA growth and improving cash flow through 2026 and 2027, together with the conclusion and receipt of the HMRC VAT claim, should see group net debt reduced to approximately 1x leverage for full year 2027; if any meaningful transaction materialise over the year ahead, the group would move into a net cash positive position by the end of full year 2027. THG remains confident in baseline divisional EBITDA margins of more than 6% for THG Beauty and more than 12% for THG Nutrition, with increasing confidence in the trajectory towards its targeted 12% EBITDA margin.