THG's Profit Doubles but an EU Tariff Warning Wipes Out the Rally — Can Investors Trust the Q4 Rebound?

Shares of THG Plc cratered as much as 13.2% on September 10 after a classic good-news, bad-news earnings release left investors questioning whether a strong first half matters if the second half starts soft.

• The Numbers Look Great — Until You Read the Fine Print. Adjusted EBITDA for the six months ended June 30 rose 109% on a like-for-like basis to £42.8 million, while group revenue climbed 7.2% in constant currency to £828.7 million — both ahead of guidance.

THG also posted its highest first-half free cash flow since 2021. Yet the stock plunged because management simultaneously guided for just ~2% revenue growth in Q3. In a company still carrying net debt of £329.7 million , investors care more about the trajectory than a backward-looking beat.

• A €3 Charge Per Parcel Changes the Cross-Border Math. In July, the EU removed its €150 de minimis customs duty exemption, replacing it with a flat charge of €3 per item category — a direct hit to THG's beauty arm, which ships millions of low-value parcels from the UK to continental Europe. The slower Q3 growth reflects impacts from THG Nutrition Asia, own-brand beauty, and retail beauty EU sales affected by de-minimis duty charges. For a business already operating on thin margins — beauty gross margins slipped to 38.8% from 39.7% a year earlier — the added cost pressures could force price hikes that dent demand, or margin compression if THG absorbs the cost.

• Management Promises a Snapback — Investors Have Heard That Before. THG expects growth to accelerate to about 6%–7% in Q4 , with own-brand beauty sales delayed into the back half. The full-year outlook stays in line with consensus expectations of £1,802.2 million in revenue, £101.7 million adjusted EBITDA, and £31.1 million in cash flow. But THG has a credibility gap: the stock still trades near the bottom of its 52-week range, and execution risk remains a concern as the company is still in the middle of a multi-year turnaround.

• Bright Spots Exist — If They Scale. Myprotein sold 58.5 million branded units in the first half, up 57% year over year , and TikTok Shop revenue grew 26%.

An AI shopping tool piloted with Google shows users 7.5× more likely to purchase, and if those conversion gains hold at scale, they could reduce reliance on paid marketing. These are promising, but none offset a structural EU tariff headwind that has no expiry date. The market's message is blunt: prove the rebound first.