The Daily Telegraph

Online beauty retailer THG slashes sales forecasts as two of its directors head for exit

- By Oliver Gill

MATT MOULDING’S beauty empire has warned profits will take a hit this year as two of the company’s board members quit with immediate effect.

Shares in THG dropped by as much as a quarter yesterday as increasing cost pressures on shoppers forced it to cut its full-year sales and profits.

The e-commerce group, once valued at more than £8bn, said that adjusted earnings before interest, taxes, depreciati­on and amortisati­on will come in lower than 2021 levels at between £100m and £130m, with sales growth of 10pc to 15pc. That is compared with previous guidance of flat earnings this year and sales growth of 22pc to 25pc.

Sherri Malek, an analyst at stock broker RBC Capital, said the reduction in forecasts for the rest of the year represente­d “another large and disappoint­ing downgrade”.

It came as two board members, Zillah Byng-thorne, senior independen­t director, and Andreas Hansson quit the company abruptly. A fresh run on THG shares has left the company as a shadow of the business that floated to great fanfare for £5.4bn in 2020. Shares later recovered some of their losses but still ended the day 18pc lower at 40p. Mr Moulding, chairman and founder of THG, has vowed the online retailer can stop burning through cash by 2024, despite it losing more than half a million pounds a day in the first half of the year.

Pre-tax profit was £108m compared with £81m during the same period a year earlier. But Mr Moulding hailed “record” sales, with revenue of £1.1bn, up 12pc on the first six months of 2021.

Mr Moulding said that THG was prioritisi­ng its “loyal customer base” and had spent £45m on shielding customers from large price rises by not passing on cost increases.

He said: “We have confidence in our ability to deliver long-term value for shareholde­rs and remain on track to be cash flow positive in 2024.”

Ms Byng-thorne and Mr Hansson were replaced with Microsoft executive Gillian Kent and Dean Moore, the former finance chief of Cineworld.

 ?? ?? Matt Moulding said THG had spent £45m on shielding customers from price rises by not passing on cost increases
Matt Moulding said THG had spent £45m on shielding customers from price rises by not passing on cost increases

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