Australian appliance manufacturer Breville has announced a significant 14.6% increase in its full-year profit, largely fueled by growing global demand for its coffee machines. The company reported a net profit of $135.9 million, surpassing last year’s figure of $118.5 million and exceeding analysts’ expectations of $133.5 million, according to data from Visible Alpha. This achievement aligns with Breville’s proactive strategies, including the acceleration of U.S. inventory shipments to mitigate the impact of tariffs imposed during the previous administration.
The company’s group revenue rose by 10.9% to $1.7 billion, driven by sales growth across the Americas, Europe, the Middle East, and Africa (EMEA), as well as the Asia-Pacific (APAC) region. Earnings before interest and tax also climbed, reaching $204.5 million, a 10.2% increase that sits at the upper end of the company’s forecast.
Strategic Shifts and Market Expansion
Chief Executive Officer Jim Clayton credited Breville’s long-term strategic initiatives for the robust financial performance. He stated, “Cooking returned to growth and food prep stabilised, while the platforms we’ve spent years building – new product development, geographic expansion, and digital platforms – all scaled together, delivering nearly $1.7 billion in sales and $620 million of gross profit.”
To address the challenges posed by U.S. tariffs, Breville has transitioned the production of its 120-volt products for North America from China to Indonesia and Mexico, with plans for further diversification in its supply chain. Clayton acknowledged that tariffs continue to be a significant concern, indicating a potential “material step up in input costs for U.S. sales,” which may require additional adjustments in supply chain operations or price increases.
Breville is also witnessing promising early growth in markets such as China and the Middle East, which the company identifies as having considerable long-term potential for expansion.
Dividends and Future Projections
The company declared a final dividend of 19¢ per share, bringing the total annual payout to 37¢, with payment scheduled for October 2, 2023. Analysts at UBS suggest that the $5.2 billion group could potentially see its sales more than double over the next decade, bolstered by the increasing global consumption of coffee and strategic market expansions.
Overall, Breville’s performance reflects the company’s adaptability and strategic foresight, positioning it well to navigate ongoing market challenges while capitalizing on rising coffee demand worldwide.
