Breville Earnings: Protecting Profitability

Breville’s revenue growth is slowing. With elevated cost-of-living pressures, discretionary spending is front-of-mind for consumers. Breville’s small kitchen appliances are discretionary products, and a weaker consumer is a key cyclical risk to a firm selling premium-priced products. First-half fiscal 2024 revenue lifted just 2% compared with the previous corresponding period. Nespresso sales in the Americas recovered and revenue from newer, mostly European territories grew 73%—albeit off a low base. This was offset by weaker consumer spending, particularly in Australia, a lack of promotional activity, and the 2023 bankruptcy of major U.S. customer Bed Bath & Beyond.