The Alluring Challenge: Reigniting Growth and Profitability.

Phu Nhuan Jewelry Joint Stock Company (PNJ) has announced impressive financial results for the first seven months of the year, with net revenue reaching VND 24,621 billion and net profit attaining VND 1,218 billion. These figures represent a remarkable surge of nearly 31% and 4%, respectively, compared to the same period in 2023. With these achievements, the company has successfully accomplished over 66% of its annual revenue plan and 58% of its after-tax profit target.

A deeper dive into the revenue structure for the seven-month period reveals that the retail jewelry segment continues to be the primary driver, accounting for 58.5% of total revenue. This marks a significant 14.6% increase compared to the corresponding period in 2023. This impressive performance can be attributed to three key factors: (i) PNJ’s strategic launch of new collections that resonate with market trends and captivate customers; (ii) the remarkable success of their marketing campaigns and sales programs; and (iii) their consistent ability to attract new customer segments while fostering a strong repeat customer base.

However, the company’s gross profit margin for the seven-month period stood at 16.4%, reflecting a decrease from the 18.7% achieved in the previous year. This change is a result of variations in the revenue structure across different business segments. Notably, amidst a vibrant gold market, PNJ witnessed a substantial 67% year-on-year surge in gold bar revenue. Consequently, the revenue contribution from 24K gold, which carries a lower profit margin, increased to 39%, up from 30.4% in the previous year.

Zooming in on the month of July, PNJ recorded revenue of VND 2,508 billion, reflecting a modest 6% increase compared to July 2023. However, the company experienced a sharp 41% decline in net profit for the month, amounting to VND 51 billion. This profit figure marks the lowest monthly profit for the jewelry retailer in several years.

While PNJ has not provided specific explanations for this substantial profit decline, a retrospective analysis of historical data reveals that July, and the third quarter in general, tend to be periods of lower profit for the company.

As of July 2024, PNJ boasts an extensive network of 409 physical stores across Vietnam, reflecting an addition of 4 stores since the end of June and a net increase of 9 stores compared to the beginning of the year (with 17 openings and 8 closures). This network comprises 400 PNJ stores, 5 Style by PNJ stores, 3 CAO Fine Jewellery stores, and 1 wholesale business center.

In the stock market, PNJ’s shares witnessed a slight correction on August 23, following an unexpected surge that pushed the stock to a new all-time high. Currently, the shares are trading at VND 108,900 per share, reflecting a 27% increase since the beginning of the year. The company’s market capitalization stands at over VND 36,400 billion.