Breville shares fall 12% on US tariffs announcement

Breville shares are among the worst-hit ASX 200 stocks after the US announced a range of new tariffs.

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Breville Group Ltd (ASX: BRG) shares fell 11.8% to an intraday low of $27.88 apiece due to the new US tariffs today.

Breville shares are among the worst-hit S&P/ASX 200 Index (ASX: XJO) stocks after the US announced a range of new duties.

Currently, Breville is the sixth-worst performer of the ASX 200 today, even after regaining some ground.

The ASX 200 consumer discretionary share is now trading at $29.68, down 6.1%.

The whitegoods manufacturer issued a statement about how it may be affected by the US tariffs.

Let's take a look.

Displeased and shocked emotional young friends cooking in the kitchen.

Image source: Getty Images

Breville shares among worst-hit ASX 200 stocks

Today, the US announced a range of reciprocal tariffs on imported products manufactured outside the country.

Breville currently manufactures approximately 90% of its products, by value, in China.

The rest is manufactured in the European Union, Mexico, and Taiwan.

Breville sells approximately 45% of its products into the United States.

The US has announced a 34% reciprocal tariff on Chinese imports. This will go on top of the 20% tariff previously announced.

The US has also announced a 20% tariff on imports from the European Union and a 32% tariff on goods from Taiwan.

Goods from Mexico that comply with the United States-Mexico-Canada Agreement (USMCA) remain exempt from duties.

Most non-compliant USMCA goods from Mexico face a new tariff of 25%.

How is Breville responding?

Breville said it was already "well progressed" on a project to diversify its manufacturing base.

Its initial target locations are Mexico, Indonesia, and Cambodia, but the company may change plans "as facts on the ground evolve".

The US has announced a 32% tariff on Indonesian goods and a 49% tariff on Cambodian goods today.

No matter where it sets up, Breville said it would benefit from added geographic diversification in its manufacturing base.

FY25 guidance remains unchanged

Breville said it does not anticipate any material impact from the new US tariffs on its FY25 result.

The company has reiterated its FY25 guidance for EBIT growth of between 5% and 10%.

But costs are likely to go up in FY26.

Breville explains:

Subject to the current uncertainty and fluidity in the economic environment, US tariff implementation and iteration, coupled with any country-specific responses, it is likely that the Group's input costs will increase for FY26.

The Group will continue to make tactical adjustments, where appropriate, to lessen the potential short-term impacts from any new tariffs.

Managing Director and CEO, Jim Clayton, said:

While we will continue to manage the short-term challenges‒as we did throughout the Covid period‒our primary focus will remain the continued execution of our global, long-term growth strategy.

Nothing announced today changes that strategy.

Breville shares price snapshot

The Breville share price has risen by 15% over the past year.

Motley Fool contributor Bronwyn Allen 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 Scott Phillips.

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