THG Nutrition is currently on a five quarter “losing streak,” but will an upcoming corporate restructuring move change its outlook? THG (aka the company formerly known as The Hut Group) recently updated the public markets by releasing its 2024 Q3 trading statement. I’ll be utilizing that financial information, along with notes I took listening to the earnings conference call, and any relevant publicly disclosed information to obviously update you on the recent performance of THG Nutrition division that includes the world's largest online sports nutrition brand MyProtein, but also utilize everything to provide insights surrounding the global supplement markets. For those unaware, THG is self-described as “a vertically integrated, digital-first consumer brands group, retailing its own brands in beauty and nutrition, plus third-party brands, via its complete digital commerce solution, Ingenuity, to an online and global customer base.” During the third quarter of 2024, divisional revenue for THG Nutrition was approximately $174 million, which was down 10.5% YoY. So, what’s up with these poor growth rates when the overall global supplement market continues to grow? I'll dive into several strategic decisions impacting MyProtein including: its global digital sales channel strategy and retail partnerships in physical retail, and let’s just say A LOT is riding on the success of the MyProtein global rebrand. Early results of the biggest rebrand in the 20-year history of MyProtein is said to be promising with brand awareness, consideration, and perception all demonstrating YoY improvements. More importantly though…THG Nutrition leadership needs to pay close attention to key commercial metrics over the next year because to continue moving upstream in positioning (and unlocking sales channel diversification opportunities within the American market) it needs to ensure this rebranding decision is well received by and generates brand affinity with those less price-sensitive customers. But in the final part of my latest first principles thinking content, I'll breakdown why THG Ingenuity will demerge into a standalone independent private entity. And I’m less concerned about analyzing the recent performance of THG Ingenuity, its expected enterprise value, or how it’s getting funded…instead I’m more interested in how this demerger will directly (and potentially indirectly) impact THG Nutrition. And with THG Ingenuity essentially being the master switch that “powers” THG Nutrition and THG Beauty...neither can survive without the other entity. So, something like a ten-year contract was put into place that reportedly started in 2022. Regardless, the demerger will simplify the organization.

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