Breville (ASX: BRG)Share Price and News

About Breville

Breville is an Australian company renowned for its high-quality kitchen appliances, including coffee machines, blenders, food processors, and juicers.

Founded in 1932, Breville sells over $1.5bn in goods each year in over 100 countries globally and caters to middle to higher income earners. It is headquartered in Sydney, has manufacturing facilities in China and regional offices in key markets.

Breville Company History

Breville’s journey began in Sydney, Australia in 1932 - founded from capital obtained from a successful 4-to-1 bet at the 1932 Melbourne Cup. It started as a small radio manufacturer before transitioning into kitchen appliances in the 1950s. In the 1970s, it gained international recognition with the introduction of its first sandwich toaster.

Over the years, Breville expanded its product portfolio and cemented its status as a global player in the kitchen appliance market.

Breville listed in 1999 and has achieved growth of over 2000% since. In the last 10 years, it has gained 200%. In FY24, it generated $1.53bn revenue (up 3.5%), $245.5m EBITDA (up 12.5%) and an $118.5m profit (up 7.5%). It recorded a 36% gross margin. The 4% revenue growth is hardly earth shattering, but follows 3 years of revenue growth of 19-25% during the pandemic.

Breville has made several strategic moves over the years, including its partnership with Nespresso in 2013, which allowed it to further extend its market reach in the coffee machine sector. Today, Breville continues to innovate, pushing boundaries with new technologies and sustainable manufacturing practices.

Future Outlook of Breville (ASX: BRG)

Looking ahead, Breville is well-positioned to benefit from several growth drivers in both the domestic and international markets. As reported in the most recent annual report, the company has forecasted strong revenue growth, driven by its expanding product range and geographical footprint. Breville’s commitment to premium product offerings continues to resonate with consumers, especially in markets like North America and Europe.

The company reported an increase in revenue, thanks to the continued success of its premium product lines and strategic international expansion. Breville has made significant inroads in North America, with a marked rise in market share in the United States, where demand for kitchen gadgets is increasing. The launch of new, tech-forward appliances, such as smart coffee machines and the expansion of their espresso machine line, is expected to keep Breville at the forefront of the industry. Additionally, Breville has committed to reducing its carbon footprint and using sustainable materials in its manufacturing process, which could appeal to the growing eco-conscious consumer base.

In the face of global challenges, Breville has worked on optimising its supply chain to mitigate risks from disruptions, which should support stable earnings moving forward. Despite these positive trends, Breville faces risks related to currency fluctuations, competition from low-cost rivals, and potential supply chain disruptions. As the global kitchen appliance market continues to evolve, Breville’s focus on premium products and market expansion should support long-term growth.

Is Breville (ASX: BRG) a Good Stock to Buy?

Breville presents an intriguing investment case for those looking for exposure to the consumer goods sector, particularly in the premium kitchen appliance space. Valuation metrics suggest that Breville’s shares are reasonably priced compared to its historical performance and peers. The company’s strong brand equity and focus on innovation provide it with a competitive edge, making it an attractive option for long-term investors.

Currently, Breville’s shares are trading at a fair multiple compared to its earnings growth rate. Given its solid revenue growth and profitability, the stock seems reasonably valued, though market conditions may influence short-term fluctuations. Breville offers a reliable dividend yield, supported by its strong cash flow. With increasing revenue and profit margins, investors can expect consistent returns through dividends in the long run.

While the company faces some risks, particularly related to global supply chain volatility and currency risks, Breville's market leadership and diversification efforts mitigate these risks. Breville’s ongoing expansion, both geographically and in its product offerings, positions the company for sustained growth. Innovation remains a key pillar of its strategy, with product development driving consumer interest and sales. Analysts are generally positive about Breville’s growth prospects, with institutional investors showing strong confidence in the company’s long-term strategies, making it a potential growth stock.