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Why the Breville share price is cooking up record highs

The Breville Group Ltd (ASX: BRG) share price hit a record high of $16.70 today despite the kitchen appliance manufacturer releasing no specific news to the market.

For the six-month period ending December 31 2018 Breville posted a net profit after tax of $43.5 million on revenue of $440.5 million, which represents growth of 20% and 15% respectively.

The group will pay a final dividend of 18.5 cents per share on earnings of 33.5 cents per share, which represents growth of 12% and 20% over the prior corresponding half year.

The strong result explains why the Breville share price has surged around 32% since its February 14 reporting date.

Breville operates in a competitive space, but its core kettle, blender, juicer, microwave, and coffee maker products are actually essential household features so it’s a ‘discretionary retailer’, but one with strong underlying demand.

Profit margins are also key as its best-in-class or market-leading coffee makers or blenders products can command premium prices for households not on a tight budget.

Given its strong track record backed up by a stable board it could perform well into the future. Other retailers performing well include Bellamy’s Australia Ltd (ASX: BAL) and Breville investor Premier Investments Limited (ASX: PMV).

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. 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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