Breville Group financial year 2025 results: solid growth amid tariff clouds
Breville Group (ASX: BRG), the premium kitchen appliance maker behind brands like Breville and Sage, has released its full-year results for financial year 2025 (FY25). The company’s results largely met or slightly exceeded expectations, with strong revenue growth across regions and categories. Strategic initiatives including geographic expansion and manufacturing diversification were highlighted.
However, attention has been drawn to looming U.S. tariff impacts, which could pressure margins next year and beyond.
Key financial highlights: in-line delivery with upside surprises
Breville’s FY25 results broadly revealed resilience amid the ongoing competitiveness of the consumer goods landscape. The company reported earinings before interest and tax (EBIT) of A$204.6 million, up 10.2 per cent year-over-year (YoY), and at the top end of its 5-10 per cent growth guidance. The result was also marginally ahead of consensus estimates of around A$202.4 million, driven primarily by robust revenue growth rather than margin expansion. Group revenue grew 10.9 per cent and hit A$1,696.6 million versus consensus of A$1,689.7 million.
Gross margins held steady overall, though the core ‘Global Product’ segment saw a slight dip to 37.2 per cent from 37.7 per cent in the prior corresponding period (pcp). The smaller ‘Distribution’ segment performed strongly, with gross profit up 14.4 per cent year-on-year. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at A$271.9 million against expectations of A$269.2 million, while earnings per share (eps) reached 94.4 cents per share (cps) versus consensus of 92.2 cps.
Breville Group also ended the year with a healthy balance sheet and net cash of A$48.5 million (down modestly from A$53.6 million last year due to investments in inventory and fixed assets amid tariff preparations). A final dividend of 19.0 cps (100 per cent franked) was declared, exceeding expectations of 18.3 cps and up from 17.0 cps in FY24, signalling confidence in cash flows.
The solid results can be attributed to strong revenue growth across all regions, particularly the Americas, as well as effective cost management. There were no major surprises, and arguably, solid execution was evident on controllables.
Segment and regional performance
Breville’s ‘Global Product’ segment, which forms the bulk of operations, drove much of the momentum. Sales rose 11.4 per cent on a constant currency (cc) basis, with regional breakdowns showing expansion was balanced: Americas up 11.5 per cent, EMEA at 12.0 per cent, and APAC at 10.7 per cent.
Category-wise, and as we have previously explained, coffee products led with double-digit growth, cooking appliances followed in high single-digits, and food prep saw a small single-digit revenue decline but improved gross margins.
Geographic expansions were a bright spot, with direct launches into China (live since May 2025) and the Middle East during the second half of 2025 (2H25) both “performing well post-launch,” featuring strong customer and partner engagement. Continued growth in Korea, including the Baratza brand of coffee grinders, was also noted.
The results evidence Breville’s successful diversification strategy, its healthy new product development (NPD) pipeline and geographic pushes.
In terms of outlook, the company noted that for most markets it would resemble recent years.
U.S. tariffs
A recurring theme is the impact of U.S.-China tariffs. As we previously noted, Breville largely mitigated the impacts in FY25 by proactively pulling forward inventory ahead of April 2025 changes. The strategy, however, inflicted tariff effects on the cost of goods sold (COGS), with incremental storage, transportation, engineering, and interest costs absorbed within the year’s results. While the tariff turbulence (direct effects) is contained to one market (the U.S.), it is the company’s largest single market.
Looking ahead, management flagged a “significant input cost increase in FY26 and FY27 for U.S.-based sales” under the current August 2025 tariff regime. Breville is pursuing multiple mitigants, including FOB (free on board) reductions, diversified sourcing locations (e.g., Southeast Asia and Mexico), distribution channel adjustments, and selective pricing where appropriate. The manufacturing diversification program for 120-volt products is progressing smoothly, with 65 per cent of U.S. gross profit dollars now sourced outside China (up from 15 per cent at the program’s commencement). This is expected to reach 80 per cent by the end of 1H26 – slightly below a prior 90 per cent guide – with efforts continuing into 2H26 and FY27.
Capital expenditure (capex) investments and elevated inventory levels are anticipated to persist through FY26, with a normalisation in unit holdings offset by higher cost per unit. Consistent with past practice, full FY26 guidance will be provided alongside the 1H26 results. Amid Trump’s unpredictability, it’s too early to predict the impact on revenue, costs and margins over the next 12 to 18 months.
For investors, the share price performance in the near term might largely be dependent on whether consensus forecasts adequately capture the impact of tariffs on trade and margins. Consensus projects FY26 gross margins at 34.84 per cent (down from FY25’s 36.6 per cent) and EBIT margins at 11 per cent (from 12.1 per cent), but one wonders if the step down in margins is sufficient, especially given the price elasticity of coffee makers and grinders.
Price performance and investor sentiment
Breville’s stock has rallied 42 per cent since April’s Liberation Day swoon. The stock has also outperformed the ASX Small Ordinaries since then, but has materially underperformed the XSO (-2 per cent v +11 per cent) year-to-date (YTD). Heading into the result, the shares were trading on a forward FY27 price-to-earnings ratio (P/E) of 33 times.
Breville’s FY25 result affirms its position as a high-quality growth story in the small appliances sector, with double-digit revenue gains, strategic expansions, and a solid balance sheet providing something of a buffer. While the U.S. tariff regime introduces uncertainty, and while management is actively mitigating risks, the absence of immediate guidance will leave room for debate and therefore opportunity. The upcoming management call will be poured over for clues on pricing power and diversification timelines. If Breville can navigate these costs without eroding its premium brand appeal, the long-term outlook remains promising – particularly with coffee and cooking categories firing on all cylinders.
Disclaimer:
The Montgomery Small Companies Fund owns shares in Breville Group. This article was prepared 20 August 2025 with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade Breville Group, you should seek financial advice.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
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