Breville Group: Brand Strength To Cushion Sales From Discretionary Spending Slowdown

Data from the Australian Bureau of Statistics shows retail turnover in electrical and electronic goods, which includes electric appliances such as Breville's, has softened in recent months. In the fiscal year to April 2023, seasonally adjusted trade has fallen 1% compared with the previous corresponding period, or PCP. We expect discretionary goods consumption will remain under pressure in the near term as households absorb higher interest repayments and continue to rebalance toward a higher share of services spending. Accordingly, we reaffirm our 3% top line growth forecast for Breville’s Asia-Pacific product segment in fiscal 2023, a marked slowdown from 19% growth in fiscal 2022. Asia-Pacific sales account for around 20% of consolidated revenue.