Breville Group's Tariff Mess Clears, Setting Up a Growth Test

A costly manufacturing transition weighed on margins through FY26, but fund managers see a cleaner FY27 setup for the global coffee appliance maker.

2 Oct 2026 · 3 min read

Breville Group navigated a genuinely messy FY26 defined by US tariffs and a costly shift to alternative manufacturing hubs, and while gross margins took a hit along the way, fund managers have largely concluded the company is coming out the other side with a cleaner base for double-digit earnings growth in FY27, drawing new buyers even as one long-time holder quietly reduced its enormous stake.

Tariffs cloud a genuinely attractive growth story

Antares Capital said it grew increasingly concerned that while topline coffee maker sales would hold up, the cost of goods impact from tariffs would not be mitigated as quickly as anticipated, preferring to sit on the sidelines. Sterling Managed Investments and Clime Investment Management both initiated positions in October, attracted to Breville's capital-light business model, dominant position in premium coffee appliances and a consistent track record of double-digit revenue growth, while acknowledging FY26 would be a transition year due to US tariffs and manufacturing changes. Bennelong Australian Equity Partners offered a longer view, noting it had built a substantial shareholding in Breville since March 2018, more than doubling exposure to a peak of 12.5 percent of the company, worth nearly $390 million, in September 2022, before beginning to reduce that position over the six months to February.

A resilient, global daily-ritual business

Spheria Asset Management said it views Breville as a global growth name rather than a cyclical consumer play. Milford Asset Management said the stock rose 13.7 percent as coffee consumption continues to evolve across the Americas and China, supporting demand for premium in-home machines, with the Americas now contributing around 50 percent of revenue and growing at a 15 percent compound annual rate. Quest Asset Partners added the stock in May, viewing it as an attractive consumer-facing business with strong quality characteristics and relatively lower exposure to emerging AI-driven consumer shopping disruption than peers, with recent RBA rate actions weighing on the sector creating the entry opportunity. Longwave Capital noted more than 80 percent of Breville's sales are generated outside Australia, with its growth profile tied far more to global premium coffee and kitchen appliance penetration than to the domestic economy.

It's a daily ritual, not really a discretionary item; unlike other vices like liquor, people are continuing to drink it.

— Pendal Group, Article, July 2026

The tariff mess clears, new buyers arrive

DS Capital said Breville's share price finished higher for the year despite gross margin compression from higher US tariffs and the structural costs of transitioning to alternative manufacturing hubs, delivering 10 percent top-line revenue growth while crucially significantly de-risking the outlook going forward. Wilson Asset Management rated the stock a buy, arguing the company is shedding what was a genuinely messy tariff period and entering FY27 with a much cleaner base, expecting double-digit-plus earnings growth as it leverages a US affluent consumer base that continues to spend strongly. Hyperion Asset Management and Endeavor Asset Management both initiated new positions in June and July respectively, with Endeavor noting Breville gives its portfolio a global consumer franchise where the tariff impact is now largely reflected in the price.

You're getting rid of a lot of what was the messy period for Breville in terms of tariffs and whatnot, you're entering FY27 with a much cleaner base with what we believe will be double digit plus earnings growth.

— Wilson Asset Management, Article, July 2026

The metric that matters: can revenue growth hold at a 30x multiple

Airlie Funds Management said the number one metric to watch with Breville is revenue growth, given its standalone headline multiple of 30 times earnings requires consistent growth to sustain, and called the low double-digit revenue growth it delivered a good outcome in the current environment.

What fund managers say they are watching next is whether double-digit revenue growth continues to support Breville's 30 times earnings multiple, delivery of the promised FY27 margin recovery now that manufacturing transition costs are largely behind it, continued strength in US affluent consumer spending, and whether offshore growth in the Americas and China keeps outpacing the broader group.