Australian appliance maker Breville Group is navigating turbulent global trade conditions, as analysts express concerns over mounting tariff challenges impacting its international operations and future earnings.

Citi analyst Sam Teeger this week cut his target valuation for Breville shares by a significant 16%, citing uncertainty around tariff impacts under recent trade actions led by former U.S. President Donald Trump. Breville’s stock has already fallen 13.8% year-to-date, now trading at $30.50.

Teeger’s revised earnings forecasts for FY2026 and FY2027 reflect a 12% decline, largely due to expected reductions in gross margins and increased manufacturing costs as the company seeks alternative sourcing outside heavily tariffed regions.

“Following President Trump’s tariff letters… we now have increased clarity around the potential earnings impact to Breville and have revised our forecasts accordingly,” Teeger said.

Key new tariffs include:

– 32% on goods from Indonesia
– 36% on Cambodia
– 20% on Vietnam

– An assumed 40% product mix-adjusted tariff for China.

Breville, historically focused on expansion in the U.S. market, has now turned its attention to China, capitalising on a growing coffee culture post-pandemic.

The Chinese espresso machine market is estimated to be worth US$330 million (A$500 million) — equal to that of the U.S.

Despite this potential, Breville’s entry into China is measured. President of APAC, Mark O’Kelly, confirmed the company is pursuing a digital-only launch strategy, relying on platforms including Tmall, JD.com, Xiaohongshu, and Douyin, with minimal investment.

Teeger also reduced Breville’s valuation premium relative to its ASX 200 Industrials peers by 20 percentage points, now estimating premiums of 30% and 60% respectively over the next two years. He flagged short-term risks including operational complexity and the possibility of consumer pushback if product quality suffers amid supply chain changes.

“We see significant opportunity for growth via category expansion, new product development, and geographic diversification,” Teeger noted. “But caution remains in the near term as consensus forecasts have yet to fully incorporate tariff impacts.”

In the past CEO Jim Clayton seen above has delivered consistant growth.