Breville Group Powers Ahead with 10% Revenue Growth and Strategic Tariff Hedge

Strong Financial Performance Amid Resilient Demand

Breville Group Limited (ASX: BRG) has reported a solid half-year performance for the six months ended 31 December 2024, with revenue climbing 10.1% to AUD 997.5 million. This growth reflects resilient consumer demand across its global markets, particularly in the coffee segment, which continues to be a key driver.

Net profit after tax (NPAT) surged 16.1% to AUD 97.5 million, outpacing revenue growth due to effective cost management and lower interest expenses, the latter benefiting from strong cash generation in the prior fiscal year. The company maintained a stable gross margin of 36.7%, translating into a 10.3% increase in gross profit.

Segment and Geographic Highlights

The Global Product segment led the charge with a 13.0% constant currency sales increase, driven by double-digit growth in coffee products and high single-digit growth in cooking appliances. The Americas, APAC, and EMEA regions all delivered double-digit revenue growth in constant currency terms, underscoring the broad-based strength of Breville’s portfolio.

The Distribution segment also posted healthy gross profit growth of 14.7%, despite a slight revenue decline, reflecting strategic adjustments in channel mix and pricing.

Strategic Inventory Management and Tariff Mitigation

In anticipation of evolving US trade policies, Breville executed a tactical pull-forward of second-half 2025 inventory into the US market. This move serves as a hedge against the potential imposition of a 10% tariff on products imported from China after February 1, 2025. The company’s proactive approach aims to neutralise tariff impacts on reported earnings for FY25.

Complementing this, Breville is advancing a structural solution by relocating 120v product manufacturing out of China, with significant progress expected by mid-2025. This shift is projected to reduce exposure to US-China tariff risks substantially by early 2026.

Expansion and Innovation Initiatives

Breville is expanding its direct market presence in the Middle East and China, targeting substantial disposable income pools and population bases. The Middle East operation, headquartered in Dubai, and the planned direct model launch in China in the second half of FY25, signal the company’s commitment to growth in high-potential regions.

Innovation remains a cornerstone, with new product launches such as the Oracle Jet espresso machine and the Craft Collection of premium accessories reinforcing Breville’s market leadership. Additionally, the Beanz service platform is gaining traction as a global coffee subscription and bundling ecosystem, enhancing customer engagement and creating semi-recurring revenue streams.

Outlook and Market Positioning

Looking ahead, Breville expects FY25 EBIT growth between 5% and 10%, contingent on stable economic conditions and supply chain continuity. The company’s low leverage, with net debt reduced to AUD 55.1 million and strong liquidity buffers, provides flexibility to invest in marketing, R&D, and geographic expansion.

Breville’s strategic inventory management, geographic diversification, and innovation pipeline position it well to navigate ongoing trade uncertainties and capitalise on evolving consumer trends in premium kitchen appliances and specialty coffee.