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(Alliance News) - THG Holdings PLC on Monday increased its revenue guidance for the fourth quarter of 2020 and the year as a whole after a strong sales performance in October and November.
Shares in THG were up 3.5% at 671.60 pence in London in morning trading.
The retailer, also known as the Hut Group, said it "has seen new customer acquisition trends further accelerate into Q4 across all divisions, supported by very strong performances during Singles Day, Black Friday and Cyber Week."
THG's new active customers in November came to over 1.7 million, a 74% rise year-on-year, with close to 900,000 new customers in Cyber Week alone.
On top of this, positive trends continued for for customer retention rates and average spend per customer, "further underpinning a very strong performance during the most important trading period of the year."
Consequently, with positive trends across all of its brands and territories, THG is expecting its fourth quarter and 2020 as a whole to significantly outperform the prior year.
Fourth-quarter revenue growth is now forecast at between 40% and 45% year-on-year, far above the prior guidance for 16% to 25% growth, reflecting further acceleration from its third quarter and interim growth rates of 39% and 36%, respectively.
Annual revenue growth is now expected to be between 38% and 40%, coming in between GBP1.57 billion and GBP1.60 billion, from GBP1.14 billion in 2019. Previous guidance was for revenue growth of 30% to 33%.
THG is still forecasting stable adjusted earnings before interest, tax, depreciation, and amortisation margins for financial 2020. Its medium-term guidance of annual revenue growth of 20% to 25% with stable adjusted Ebitda margins, was maintained.
THG will post a fourth-quarter trading update on January 12.
Additionally, the company announced a number of new direct-to-consumer partnerships. This includes a partnership with with Microsoft Corp, which has launched its Rare merchandise website using THG Ingenuity.
Entertainment firm Warner Bros has also signed a D2C contract with THG including wholesale and business-to-business trading rights.
The Pokemon Co International brand has agreed an international contract with THG Ingenuity over more than 20 European territories.
In retail, contracts have been signed with British clothing brand Jack Wills, part of Frasers Group PLC, and coconut water company Vita Coco. In beauty, THG signed deals with New Zealand skincare brand Antipodes Skincare and cosmetics brand Note Cosmetique.
Financial terms of the THG Ingenuity contracts weren't disclosed.
Commenting on the looming end to the Brexit transition period at the end of 2020, THG said Monday: "Since the UK voted to leave the EU in 2016, THG has undertaken significant infrastructure investments to mitigate any potential negative impacts. These include the opening in 2018 of a 800,000 square foot manufacturing and distribution centre in Poland, from which the vast majority of the group's European customers are serviced. While the full extent of Brexit terms remain unknown, the group is well positioned ahead of the transition period ending to minimise any possible future disruption."
By Anna Farley; annafarley@alliancenews.com
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