By Michael Susin
The Hut Group (THG) recently announced a decrease in revenue for both the last quarter and the entirety of 2023. However, this decline was anticipated and is a result of the strategic review conducted by the company, which led to the divestment of smaller legacy brands.
For the fourth quarter, THG experienced a 6.1% drop in revenue, amounting to £197.7 million ($251.6 million). Additionally, revenue for the entire year decreased by 11%, reaching £673.4 million.
Despite these figures, THG is pleased to report that it achieved free-cash-flow breakeven for 2023. Furthermore, the company currently boasts a robust balance sheet, with approximately £600 million in cash and available facilities.
THG also expects an impressive 75% increase in adjusted earnings before interest, taxes, depreciation, and amortization for 2023 when compared to the previous year.
Looking ahead to 2024, THG foresees another year of strong operating cash flow. The company plans to reinvest between £100 million and £110 million to further enhance long-term growth and maintain a competitive advantage.
In terms of the recent freight disruption in the Red Sea region, THG assures that it will have minimal impact on stock availability. At present, the financial repercussions are considered immaterial.
Additionally, THG has formed a partnership with U.K. wellness retailer Holland & Barrett and expanded its partnerships with major brands as part of its ‘Enterprise Strategy’. These collaborations are projected to generate approximately £175 million in incremental gross merchandise value.