THG (LSE: THG) shares climbed more than 13% after the company reported a return to revenue growth in the second quarter, helped by a strong finish to June. For a business whose shares have fallen nearly 50% over the past year, that kind of jump naturally catches attention.
But the details matter. Beauty sales are still expected to fall by 2 to 3% this quarter, although that’s an improvement on the 10% slump seen earlier in the year. Nutrition, meanwhile, is growing steadily between 5 and 7%, up from almost flat in Q1. The decision to exit lower-margin markets in Asia and Europe will start to ease the revenue drag in the third quarter.
Despite these encouraging signs, the stock remains about a third of its peak following the 2020 IPO. So it’s worth asking whether today’s rally is evidence of real recovery or simply a short-term reaction to better numbers.
The company’s founder recently found himself in a public debate over the share price. While such exchanges make headlines, they don’t address the underlying questions investors want answered, namely, how THG plans to turn modest growth into sustainable profits and stronger governance.
This jump in the share price is a reminder that markets often move on sentiment and momentum, sometimes ahead of fundamentals. Whether THG can hold on to this momentum depends on whether it can keep growing, improve transparency, and convince investors it is more than a collection of hopeful numbers.