Breville Group Reports Record $1.81bn Revenue, Completes Manufacturing Diversification

Record Revenue Amid Geopolitical and Supply Chain Challenges

Breville Group Limited (ASX:BRG) has posted another milestone with record full-year sales of AUD 1.81 billion for FY26, marking a 6.7% increase on the prior year. Earnings before interest and tax (EBIT) nudged up 1.2% to AUD 207 million, matching management’s guidance despite a volatile operating environment marked by four US tariff restructurings and the closure of the Strait of Hormuz disrupting global supply chains.

The company’s net profit after tax rose 1.7% to AUD 138.1 million, supported by lower average borrowing costs. Earnings per share increased marginally to 95.5 cents, and the Board declared a fully franked final dividend of 19 cents per share, bringing the total dividend for the year to 38 cents, a 2.7% lift on FY25.

Manufacturing Diversification Bolsters Supply Chain Resilience

A key highlight was the substantial completion of Breville’s manufacturing diversification program. The Group has shifted 85% of its 120-volt product gross profit dollars away from China, spreading production across Mexico, Indonesia, Cambodia, and Vietnam. This strategic pivot has improved supply chain optionality and resilience, cushioning the company against tariff shocks and geopolitical risks.

This diversification contributed to a stronger gross margin in the second half of FY26, which rose to 36.8%, surpassing both the prior half and the previous corresponding period. However, full-year gross margin slipped 60 basis points to 36.0%, reflecting tariff headwinds and transition costs.

Coffee and Cooking Drive Double-Digit Growth

Breville’s Global Product segment grew revenue by 7.4% (9.7% in constant currency), fuelled by double-digit growth in the coffee and cooking categories. Food preparation products grew at a single-digit pace. Notably, the company’s youngest markets; China, Korea, Mexico, and the Middle East; collectively surged by over 70%, validating the Group’s decision to transition these regions to direct operations.

China’s first full year of direct sales saw revenue multiply 7.1 times compared to the prior distributor-led model, while the Middle East grew 6.6 times despite geopolitical challenges. These markets remain early in their growth trajectories but offer significant long-term potential.

US Retail Expansion and New Product Innovation

In the Americas, double-digit constant currency growth of 10.8% was supported by premium new product launches and a strong performance of the Barista Express espresso machine. The completion of 300 store-in-store installations at Best Buy in November 2025 has driven both sales uplift and higher average selling prices, underpinning the Group’s structural advantage in the US retail channel.

New product introductions such as the Oracle™ Dual Boiler espresso machine, the Eye Q® Toaster, Baratza Encore™ ESP Pro grinder, and Lelit MaraX3 espresso machine all contributed meaningfully to growth. The Oracle™ Dual Boiler, featuring integrated Baratza burr technology and Wi-Fi connectivity, represents the most advanced model in the Oracle family.

Sustained Investment in Growth and AI Transformation

Breville increased investment in its growth drivers, allocating 14.4% of revenue to new product development, marketing, technology services, and solutions; up from 14.2% in FY25. This reflects the Group’s commitment to innovation and market expansion despite cost pressures.

The company’s AI transformation program progressed from infrastructure build-out to team-level amplification, with over half of employees now using AI tools to boost productivity. Early deployments show compounding benefits, accelerating product development and operational efficiency.

Strong Balance Sheet and Cash Flow Support Flexibility

Breville ended FY26 with a net cash position of AUD 104.4 million, up from AUD 48.5 million a year earlier. The Group holds unused debt facilities of AUD 364.4 million, providing ample flexibility to fund seasonal working capital needs and future growth investments.

Inventory rose to AUD 465.8 million, driven primarily by an earlier build of 120-volt product inventory in the US ahead of FY27 peak season, partially offset by a weakening USD. Capital expenditure increased, reflecting store-in-store expansions and investments in diversified manufacturing tooling.

Sustainability and Governance Highlights

Breville continues to embed sustainability into its operations, achieving net zero Scope 1 and 2 emissions in FY26 through energy efficiency initiatives and carbon credit retirements. The company voluntarily disclosed Scope 3 emissions, totaling over 2 million tonnes CO2-equivalent, with ongoing efforts to improve measurement and reduce impact.

The Board maintains strong oversight of climate-related risks and opportunities, integrating sustainability targets into executive remuneration. Diversity remains a focus, with women comprising 38% of the Board and 48% of the workforce.

Executive Remuneration Aligned to Performance

Breville’s remuneration framework links executive pay to EBIT, profit before tax, total shareholder return, and strategic priorities including sustainability. FY26 short-term incentives were awarded at 88% of potential, reflecting strong but challenging conditions. Long-term incentives for FY24 will vest at 100%, reflecting robust three-year TSR performance and strategic progress.

Board fees are set to increase by approximately 8% from FY27, with shareholder approval sought to raise the aggregate Non-Executive Director remuneration pool for the first time in five years.

What to Watch Next

Entering FY27, Breville faces an uncertain tariff environment in the US and ongoing inflationary pressures linked to geopolitical tensions. However, the company’s diversified manufacturing base, strong retailer partnerships, and AI-driven innovation position it well to navigate volatility. Investors will be watching how these factors translate into earnings and margin performance in the coming year, as well as the impact of new product launches and geographic expansion, particularly in the fast-growing direct markets.