THG raises profit forecast to £103m as shares rally

Manchester-headquartered THG has raised its full-year adjusted earnings forecast to £103m after reporting third-quarter revenue of £408.8m, with its shares climbing about 30% following the update.

The ecommerce group’s revenue increased by almost 1% in the three months to 30 September 2026. Its revised adjusted EBITDA expectation exceeded both its earlier guidance and market consensus, as reported by BusinessCloud.

What happened

THG also maintained its forecast for positive free cash flow of between £25m and £35m in the 2026 financial year. That would be its first positive annual result on this measure since its stock market flotation in 2020; the range remains in line with consensus.

The shares initially rose 15% after the quarterly announcement and retained their gains through the week. They finished at 35.44p, compared with 26.04p on 1 October, reaching their highest price since April 2026.

The distinction between the revenue result and the earnings upgrade is important. Sales growth remained modest, while the stronger profitability outlook prompted THG to lift its forecast rather than simply maintain it.

The background

One potential source of relief is the recent decline in wholesale whey prices. Whey is a key ingredient in products sold by THG’s Myprotein business, although its price remains high by historical standards despite the fall.

The group is also awaiting an HMRC update on a possible £60m VAT repayment. The claim follows a lengthy legal dispute over how protein products should be treated for tax purposes, and a favourable decision could strengthen THG’s finances.

The case concerns a different product category from the dispute in which Omaze is challenging HMRC over VAT on house-prize draws. For THG, the repayment remains a possibility rather than a confirmed cash receipt.

What people are saying

Investment banks Jefferies Financial Group and Peel Hunt responded favourably to the trading update. Their reaction accompanied a rally that, unlike some earlier rises in THG’s shares, was not quickly reversed.

Founder and chief executive Matthew Moulding used a formal regulatory statement to set out his assessment. He said operational performance was strengthening, profitability was improving and both divisions were making strategic progress.

That approach differed from his previous use of LinkedIn to discuss company developments. Moulding had not posted on the platform for five months, with his last contribution following the first-quarter results.

An unnamed analyst described the rally as THG’s largest two-day percentage share-price increase since listing. The analyst also pointed to lower whey prices, discussion of the potential tax rebate and possible disposals as factors attracting attention.

A private investor offered a more cautious assessment. While welcoming the results, the investor said THG would need four successive strong quarters, the elimination of debt and potentially some asset sales before its shares could return to £2. That was the investor’s view of the recovery required, not company guidance.

What happens next

The fourth quarter is traditionally THG’s busiest trading period and its strongest for cash generation. Moulding said the group entered it with confidence and expected revenue growth to accelerate during the quarter.

Delivery through that period will determine whether THG meets its upgraded earnings target and achieves the positive annual free cash flow it has forecast. The HMRC decision remains a separate outstanding issue, while the references to disposals came from the analyst and investor rather than an announced transaction.