Breville Group Limited has reported a record half-year revenue of $1.1 billion, driven by strong coffee sales and new market growth, while successfully managing US tariff impacts to maintain flat EBIT year-on-year.
- Record $1.1bn revenue for 1H26, doubling over six years
- US tariffs cut gross margin by 130bps but mitigated by manufacturing diversification
- Flat EBIT year-on-year despite increased investment in growth and marketing
- Net debt improved with strong underlying cash flow
- Interim dividend up 5.6% to 19 cents per share
Record Revenue Growth Amid Tariff Challenges
Breville Group Limited has delivered a standout performance for the half year ended 31 December 2025, posting record revenue of $1.1 billion. This milestone marks a doubling of revenue over the past six years, underpinned by robust demand in its coffee segment and rapid expansion into new markets such as China, Korea, Mexico, and the Middle East.
Despite the challenging backdrop of increased US tariffs, which shaved 130 basis points off the gross margin, Breville’s strategic response has been effective. The company accelerated its manufacturing diversification program, successfully shifting over 80% of US gross profit manufacturing outside China. This move, combined with pricing adjustments and a refined distribution mix, helped contain margin erosion.
Maintaining Profitability While Investing for Growth
Breville’s earnings before interest and tax (EBIT) remained flat year-on-year at $145.8 million, in line with management’s expectations. This stability was achieved despite increased spending on new market expansion, marketing initiatives, and store-in-store installations, including a notable rollout of 300 fixtures in Best Buy stores across the US.
The company also reported a 5.6% increase in its interim dividend to 19 cents per share, reflecting confidence in its cash flow and balance sheet strength. Net debt improved to $43.6 million, supported by strong underlying cash flow and prudent working capital management, even as the business absorbed a $42 million cash payment to US customs.
Strategic Innovation and AI Transformation
Beyond financials, Breville is advancing its AI-driven enterprise transformation, positioning itself among the top 13% of companies globally in AI readiness. The company has integrated AI solutions across multiple functions, notably improving customer service efficiency with significant reductions in call handling times and agent turnover.
Looking ahead, Breville expects a slight increase in full-year EBIT for FY26, assuming stable economic conditions and no further tariff escalations. The company continues to invest in manufacturing diversification and new product development, aiming to sustain its growth momentum in a competitive global market.
Bottom Line?
Breville’s disciplined tariff mitigation and innovation investments set the stage for cautious optimism in FY26.
Questions in the middle?
- How will ongoing US tariff policies affect Breville’s margins beyond FY26?
- What impact will AI transformation have on long-term operational costs and profitability?
- Can new markets like China and Mexico sustain their rapid growth trajectory?