Breville (ASX:BRG) share price pops after 25% profit surge

ASX investors reacted very positively to Breville's half-year report this morning.

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a mature aged couple dance together in their kitchen while they are preparing food in a joyful scene as the Breville share price rises on the back of a 25% profit surge

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Key points

  • Breville Group has reported its first-half earnings
  • The company saw healthy rises across most metrics
  • Breville even managed to increase profits by more than 25%

The Breville Group Ltd (ASX: BRG) share price soared by 9% shortly after the market open on Wednesday, after the home appliances company reported its half-year earnings for the 2022 financial year (1H22).

The Breville share price is currently up 1.09% to $28.75 after closing at $28.45 yesterday. The shares hit $31 this morning before falling back.

Breville share price up on solid first half update 

What else happened in the first half?

Breville experienced strong growth across all of its target markets over the half. Europe, Middle East and Africa revenue saw the most growth, rising by 39.4% to $201.1 million. Asia Pacific revenue was up 22% to $162.7 million. Americas revenue rose 17.1% to $370.1 million.

All three areas have now seen compounded annual growth of more than 20% since the 2019 financial year. Breville said its gross margins were affected by a "turbulent" environment and inflation headwinds, partially offset by price increases.

What did management say?

Here's some of what Breville CEO Jim Clayton had to say on these results:

Sustained consumer demand across geographies and categories underpinned our 1H22 performance. The business continued its move from strength to strength delivering 23.6% sales growth, despite a strong prior period and global logistical constraints (most acute in the US); double digit EBIT growth with continued investment in mid-term growth drivers; and, an improved inventory position, which we plan to further reinforce in the 2H to support growth in the 1H23.

What's next?

Going forward, Breville has told investors to expect EBIT for the full 2022 financial year to be "consistent with the market's current consensus forecast of ~$156 million". However, that assumes no significant change in economic conditions and no further supply chain disruptions "beyond what we experienced" in the first half.

Breville said that it is expecting inflationary pressures to continue, as well as supply chain constraints. The company also said that it would "begin building inventory for peak season FY23 to try to get ahead of ongoing logistical challenges".

Breville Group share price snapshot

Although the Breville share price had a strong open today, it remains down by 10.9% so far in 2022. It's also down by 7.9% over the past 12 months. Over the past 5 years, Breville shares have risen by a healthy 231%.

At the current Breville share price, this ASX 200 share has a market capitalisation of $3.96 billion, with a trailing dividend yield of 0.95%.

 

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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