Breville Hits $1B Sales, Buoyed By Coffee Machine Demand
Australian kitchen king Breville has broken the $1 billion barrier in sales for the first time year, with sales for the year ending June climbing 24.7 per cent to $1.19 billion.
The company reported net profits of $91 million, a 42.3 per cent leap. EBIT also soared 39.6 per cent to $136.4 million.
Earnings before interest and tax jumped 39.6 per cent to $136.4 million, in line with the group’s $136 million guidance, while the net profit result was slightly short of consensus forecasts of around $94 million.
This marks the company’s fourth consecutive year of double-digit growth. The company’s report notes a shift to premium products, and reduced promotional spend helped the company achieve these results. CFO Jim Nicholas credits the company’s successful expansion into France, Portugal, Italy and Mexico.
Breville Group CEO Jim Clayton said:
“A fairly remarkable year for the Group with accelerated demand experienced in the first half carrying through to the second half. Increased consumer demand, driven by the need/requirement to work from home, coupled with our continued geographic expansion, outweighed logistical challenges and a weakening USD.
“Constant currency Global Product sales grew by 37% over a strong prior year. All regions and categories delivered good growth despite experiencing very different and often erratic retail and supply chain environments.”
The supply chain issues refer to the Suez Canal blockage, and problems at the Yantian International Container Terminal.
Despite this success, Clayton warns that continuing logistics issues meant that product price rises may be inevitable, saying, “we will raise prices incrementally where appropriate.”
Nicholas echoed this sentiment, saying: “Cost pressures continue to surprise me, especially on container costs. “It seems at the moment to hold no bounds as to where they will go to. So we will be definitely looking to recover that through price.”
“Whether that will exactly balance out those cost pressures, will depend on how long they last for.”
The company’s sales benefited greatly from the work-from-home environment, and the demand for coffee makers this led to.
In addition, Breville finalised its acquisition of U.S. coffee machine manufacturer Baratza in September, 2020.
Steven Fisher will retire from the company’s board in November, following a 17 year run as a director, including eight years as chairman.
Non-executive director Tim Antonie will become chairman, with Lawrence Myers deputy chairman.
Antonie also serves on the board of Solomon Lew’s Premier Investments; the Lew family owns 33 per cent of Breville.