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Why the Breville share price has surged 5% today

Breville share price
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The Breville Group Ltd  (ASX: BRG) share price has surged more than 5% on the ASX today following its bumper half-year earnings release last week.

The company’s share price is up more than 40% year-to-date, including an astronomical 27% in the last week alone as the appliance maker’s international expansion continues to pay dividends.

What was so good about Breville’s earnings?

The company’s first-half revenue rose 15.4% on the prior corresponding period to $440 million with the company’s expansion into Germany and Australia proving to be a resounding success. Management intends to continue its European expansion with its Sage brand into Belgium, the Netherlands, Luxembourg and Switzerland in 2H19 and Spain in 1H20.

North America continues to pay dividends for the company with strong beverage and juicing product sales in the USA underpinning earnings.

Net profit for the group was up 19.7% to $43.5 million which saw the company increase its interim dividend by 2 cents per share (cps) on 1H18 levels to 18.5 cps, franked to 60%.

The company has ridden a 2018 health craze to be riding high in a sector that’s under some serious pressure, both here and in the USA. The Aussie appliance maker still managed to grow revenue by 7.6% in its Australian and New Zealand segment despite recent Reserve Bank of Australia (RBA) data suggesting a miss on estimates in the sector.

Foolish takeaway

Breville is an anomaly in an otherwise faltering retail sector, with economic data continuing to weaken and the retail REITs such as Vicinity Centres Re Ltd (ASX: VCX) starting to feel the heat.

I’d be looking to park my cash in a non-cyclical stock such as AGL Energy Ltd (ASX: AGL) or even gain some high-yield exposure with the likes of Alumina Ltd (ASX: AWC) for the time being.

Where to invest $1,000 right now

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Motley Fool contributor Lachlan Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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