Breville reported FY26 EBIT of $207 million up 1%. The company showed improving sales growth and better profit margins in 2H26, which did benefit from a $4.4 million net tariff refund. Sales momentum should remain above 10% constant FX growth in FY27e as retail shop-in-shops, new product launches and additional countries of distribution boosts sales. We expect gross margins and EBIT margins to expand in FY27e as better sourcing and lower tariffs help margins.

Breville has navigated a turbulent six years given a COVID-19 boom in demand and bust along with the introduction of China tariffs by the US. We expect Breville to sustain close to 10% constant FX sales and EBIT growth over the next two years. The demand backdrop in the US remains strong and globally the coffee machine market has significant upside in household penetration. Even though competition in coffee machines is heating up, Breville’s premium position affords it some protection. We also see medium-term sales support from additional markets like China and the middle east.

We have reviewed the US price and volume backdrop for Breville. Price rises put through in August 2025 look like they have stuck, albeit December was very promotional. Price rises of 3% will be partly offset by lower volume growth in our view. Breville’s 1H26e EBIT could rise by 4% with the tariff impacts only affecting three months of the period. We expect flat EBIT in FY26e.

Breville reported 10.2% EBIT growth for FY25, with slightly weaker growth in 2H25. The key debate on this company is the magnitude and timing of the impact of US tariffs on its earnings. We expect the combination of tariffs with some offsetting cost savings to result in a slight lift in FY26e EBIT to $206 million. The tariff headwinds will continue into FY27e because of its inventory cycle and temper EBIT growth in that year as well. We forecast FY27e EBIT of $220 million. Beyond FY27e, the company should return to 7%-10% EBIT growth.