Takeover-target THG misses downgraded 2022 earnings guidance
LONDON (Reuters) – THG, the online retail platform that said on Monday it had received an approach, missed its downgraded expectation for 2022 earnings on Tuesday, but said profitability had improved in the first quarter even as revenue declined.
The British company reported adjusted core earnings of 64.1 million pounds ($79.5 million) for 2022, short of its guidance in January of 70-80 million pounds, which it downgraded after its revenue growth was far lower than it had expected.
THG, which owns beauty and nutrition e-commerce sites as well as an online platform serving third-party brands, reported a 2.7% rise in revenue to 2.24 billion pounds ($2.78 billion) and said it expected a similar low- to mid-single digit rise this year.
However, its first-quarter revenue declined by 8.6%, an outcome it said was largely as planned due to prioritising higher margin sales.
Chief Executive Matthew Moulding said: “While FY 2022 adjusted EBITDA was not where we planned at the start of the year, this was largely the result of our strategy to minimise the impact of inflation upon our customer base.”
Shares in THG surged more than 40% on Monday after it said it had received a “highly preliminary” buyout proposal from Apollo Global Management, without disclosing terms of the plan.
The stock had lost more than 90% of its value in the last two years after it issued a string of profit warnings.
($1 = 0.8065 pounds)
(Reporting by Paul Sandle, Editing by Kylie MacLellan and James Davey)