The Breville Group Ltd (ASX: BRG) share price has continued its impressive run and is up a further 2% to $16.06 on Friday.
This latest gain means that the appliance maker's shares have now rallied an incredible 47% since this time last month.
This gain was a touch stronger earlier when its shares were up 3% at an all-time high of $6.25.
Why is Breville up 47% in a month?
At the start of this year Breville's shares were trading within sight of their 52-week low. Weak consumer sentiment and the housing market slowdown had many in the market expecting Breville to struggle in FY 2019.
The release of its half year results in the middle of last month revealed that these assumptions were way off the mark.
In the first half of FY 2019 Breville posted a 15.4% increase in revenue to $440.4 million and a 19.7% lift in net profit after tax to $43.5 million. Earnings per share also came in 19.7% higher at 33.5 cents.
Management explained that the strong result was driven by "double digit growth in the key markets of the USA, Australia and the UK, as well as the positive impact of geographic expansion in Germany and Austria."
In respect to the latter, management advised that the entry into Germany and Austria has gone very well. Particularly in Germany where revenue in the first half is already 42% larger than when it first entered the UK market. Management believes this shows the speed and scale benefits it is getting from its centralised approach to market expansion.
European sales are likely to be given an additional boost in the near term when the company expands into Switzerland and Benelux in the second half and then Spain in the first half of FY 2020.
While management didn't give any concrete guidance for the full year, it did advise that it expects EBIT growth to be greater than 11%.
Should you invest?
Based on the guidance above, I estimate that Breville's shares are changing hands at around 31x forward earnings now.
This is a little rich for my tastes, so I would class Breville as a hold. But if it were trading at a more attractive level I would certainly be a buyer.
For now, I think retail shares such as Adairs Ltd (ASX: ADH) and Super Retail Group Ltd (ASX: SUL) offer more compelling risk/rewards.
