MWG Announces Lower Profit Target for 2023 Amidst Challenging Economic Conditions

The decision comes amidst unfavorable macroeconomic conditions, weak demand, the trend of thrift consumption, and high business costs.

In 2023, MWG aims to generate net revenue of $5.7 to $6.3 billion, with a net profit of $177 to $198 million, representing a potential revenue growth of more than 7%. 

However, the company anticipates a significant decline of nearly 26% in net profit compared to 2022 due to low purchasing power and increased business costs.

MWG's retail chains, The Gioi Di Dong and Dien May Xanh, which contribute 75-80% of the company's total revenue, will face a reduction in gross profit margin. Consequently, the company plans to implement sales promotion programs to drive revenue growth.

The greengrocery chain, Bach Hoa Xanh, is expected to generate 20-25% of MWG's total revenue, with a focus on increasing the value of the basket, boosting customer frequency, and attracting new customers from the market and supermarket channels. The company expects BHX to become profitable in Q4/2023.

MWG plans to improve logistics efficiency by revamping its warehousing operations, reducing waste and spoilage of fresh products, and increasing gross profit margin. 

The An Khang and AVAKids chains will temporarily suspend expansion and concentrate on maintaining profitable stores, reducing losses, and breaking even.

MWG's online business generated revenue of $795 million, accounting for 14% of its total revenue. 

In terms of revenue structure, DMX accounted for 51.7%, TGDD accounted for 26%, and BHX accounted for 20.3%. 

The company's highest product revenue came from mobile phones, accessories, and devices, accounting for 40%, while electronics and food/FMCGs contributed 32% and 20%, respectively.

MWG's reduced profit target for 2023 is due to the challenging economic environment, weak demand, and increased business costs. 

Despite the challenging conditions, the company is committed to maintaining its leading position in the Vietnamese retail market and meeting the evolving needs and expectations of its customers.