Australian appliance manufacturer Breville has announced a significant financial performance for the year, achieving a 14.6% increase in net profit, spurred by escalating global demand for its coffee machines. The company reported a net profit of $135.9 million, surpassing last year’s profit of $118.5 million and exceeding consensus estimates of $133.5 million, according to data from Visible Alpha.
The impressive results were bolstered by strategic management actions taken to mitigate the impact of tariffs imposed by the U.S. government. Breville’s group revenue rose by 10.9% to $1.7 billion, with notable growth observed across the Americas, Europe, the Middle East and Africa (EMEA), and the Asia-Pacific (APAC) regions. Earnings before interest and tax also saw a substantial increase of 10.2%, reaching $204.5 million, aligning with the upper end of the company’s guidance.
Strategic Moves and Market Expansion
Chief Executive Jim Clayton emphasized that Breville’s long-term strategy is yielding positive results. 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.”
In response to U.S. tariffs, Breville has shifted the production of its 120-volt products for the North American market from China to Indonesia and Mexico. Clayton acknowledged the ongoing challenge of tariffs, warning of “a material step up in input costs for U.S. sales” that may require further adjustments to the supply chain or potential price increases.
Future Prospects and Dividend Announcement
The company has also indicated strong early traction in China and the Middle East, markets it views as having significant long-term potential. Breville declared a final dividend of 19¢ per share, bringing the total dividend for the year to 37¢, payable on October 2, 2023.
Financial analysts at UBS project that the $5.2 billion company could more than double its sales over the next decade, driven by global coffee consumption trends and ongoing expansion into new markets. Breville’s proactive strategies and robust market presence position it well for continued growth in the competitive appliance sector.
