Breville's First-Half Sales Disappoint Investors, Earnings Beat Expectations

WriterRachel Martin

13 February 2024

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Breville's First-Half Sales Disappoint Investors, Earnings Beat Expectations

Introduction

Shares in small appliance maker Breville fell more than 10% as investors reacted to weaker than expected first-half sales. The company sacrificed promotions to preserve margins, which impacted top line sales. While interim earnings were slightly ahead of consensus, investors were not impressed.

Sales and Financial Performance

Breville's group revenue rose 2% to $905.8 million, which was about 5% below consensus estimates. However, earnings before interest and tax gained 8% to $131 million, surpassing broker forecasts by 2%. Net profit also advanced 6.7% to $84 million.

Factors Affecting Performance

Chief executive Jim Clayton explained that Breville did not heavily participate in discounting during the first half, which contributed to the weaker sales. Additionally, the closure of US retailer Bed Bath & Beyond, which filed for bankruptcy in April, also had a negative impact on Breville's performance.

Impact on Revenue Growth

While Breville had a solid half for coffee machines, the company's food appliances were a drag on revenue growth.

Conclusion

Investors reacted negatively to Breville's weaker than expected first-half sales, causing the stock to fall more than 10%. The company's decision to sacrifice promotions to preserve margins impacted top line sales. However, Breville's earnings and net profit still showed growth, exceeding consensus estimates and broker forecasts. The CEO's explanation of the company's limited participation in discounting and the closure of a major US retailer further shed light on the factors affecting Breville's performance. Moving forward, Breville will need to address the challenges in its food appliances segment to drive revenue growth.

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Rachel Martin
Rachel Martin
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Rachel Martin is an acclaimed Coffee Makers News Writer, celebrated for her in-depth reviews and barista-level expertise. With an innate passion for coffee culture and a knack for technical detail, Rachel's articles serve as a beacon for coffee enthusiasts navigating the world of home brewing.

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