UK's THG falls on lower-than-expected FY core profit forecast

THG shares slumped 30% on Wednesday after the e-commerce group warned of a bigger-than-expected hit to full-year core profit

The company now expects adjusted core profit of 100 million to 130 million pounds ($120 million-$155 million) for the year ending Dec. 31, versus a previous forecast of 120 million to 160 million pounds.

Retail sales growth slowed in the fourth quarter as consumers reined in spending amid a cost-of-living crisis, THG said.

It reported a 10.3% rise in fourth-quarter revenue to 554.9 million pounds, helped by growth in its beauty and nutrition businesses.

For the full year, revenue rose 19.5% to 2.2 billion pounds.

However, the company said it expects a "challenging" first half of 2023 as the consumer outlook remains uncertain.

Analysts at Jefferies said the profit warning was "materially below" their expectations and reflected a "significant step down" in the short-term outlook.

"The trading backdrop has clearly deteriorated, particularly in the UK," they said.

Shares in THG, which have lost more than 90% of their value in the past year, closed down 30% at 59.2 pence.