On April 10th, the British beauty e-commerce giant, The Hut Group (THG), released its annual report for the year 2023.
The report revealed that THG achieved a revenue of £2.05 billion in 2023, marking a decrease of 8.7% compared to the previous year. Adjusted EBITDA stood at £114 million, indicating a significant 78% year-on-year increase. Adjusted gross profit reached £876 million, reflecting a notable 42.8% increase. Operating loss amounted to £185 million, significantly narrowing compared to the £495 million loss in 2022.
THG stated in the financial report that the reduction in total revenue decline was attributed to the group’s proactive adjustment measures and repositioning of loss-making businesses. Despite facing challenges such as inflation and unfavorable interest rates, the adjusted gross profit margin still increased by 42.8%. The significant improvement in profit margin was credited to the group’s outstanding operational performance and the implementation of cost-saving measures.
In terms of business segmentation, the beauty business segment of the group achieved a revenue of £1.12 billion in 2023, representing a 4.4% decrease year-on-year, with adjusted EBITDA increasing by 3.8%. The health business segment recorded a revenue of £657 million, a decrease of 0.7% year-on-year, while adjusted EBITDA increased by 13.5%. The Ingenuity department generated revenue of £154 million, down 3.4% year-on-year, with adjusted EBITDA increasing by 1.3%.
THG highlighted in the financial report that the revenue of the beauty business in 2023 mainly comprised online retail, sales of well-known proprietary brands, and production, with online retail accounting for approximately 80% of total revenue. The improved profitability of the beauty business was attributed to the group’s repositioning of the business, focusing less on low-profit margin sales, and implementing promotional and regional sales strategies.
Matthew Moulding, CEO of THG, said, ” “In 2023, we made material progress against our strategic priorities, delivering significant profit growth following the support for our consumers through the cost-of-living crisis in 2022. This focus led to the Group delivering record EBITDA after cash-adjusting items in 2023, higher than at the peak of the pandemic. ”
THG was founded in 2004 and is the largest beauty e-commerce group in the UK. It owns several well-known beauty e-commerce platforms such as HQhair, Lookfantastic, and Beauty Expert. THG made its initial public offering on the London Stock Exchange in 2020, raising £1.9 billion, making it one of the largest IPOs in London in recent years.
