Aussie company's big call amid tariff chaos
The ASX-listed $5bn manufacturer confirmed the dramatic change in its latest results for the 2025 financial year, crediting the threat from the US President's new tariff regime for its decision to pursue and extend a 'manufacturing diversification program'.
Mr Trump has slapped harsh new tariffs on goods imported into the US from China to correct what he sees as unfair trade practices.
Breville CEO Jim Clayton told the market on Wednesday morning that manufacturing locations were emerging in Mexico and Southeast Asia to 'complement China'.
The company manufactures kitchen appliances in China and its largest market is the US, leaving it vulnerable to tariff shocks.
A tariff is a tax placed on imports and for manufacturers, it raises the price of their goods for their consumer base. Breville sells kitchen appliances - including its popular coffee machine range - in markets across the world. Breville Credit: Supplied
Despite the move into Mexico and Indonesia, the company said in its guidance for the next financial year that it would remain exposed to tariff uncertainty and the taxes would likely hit the business.
'Diversification of manufacturing for 120-volt product is progressing well. However, the tariffs impacting these new locations are becoming clearer, but remain subject to change,' the company said.
'Based on the current fact set, the group will face a significant input cost increase in 2026 and 2027 for US-based sales.
'In the face of this challenge, we are actively pursuing cost mitigants including (free on-board) reductions, diversified sourcing locations, distribution channel adjustments and taking price where appropriate.'
The US has also put hefty tariffs on Mexico and Indonesia of 25 per cent and 19 per cent respectively.
Breville said it was 'too early to predict' how global trade would develop in the next 12 to 18 months, but there would 'undoubtedly' be higher input costs for US products coupled with 'potential second- and third-order effects globally'.
The company said its diversification push would extend into 2026 and 2027.
Breville reported healthy profits for 2025, which it credited to a 'tactical pull forward of US inventory' to avoid Mr Trump April tariff announcement.
Revenues lifted 10.9 per cent to hit $1.7bn, while net profits after tax jumped 14.6 per cent to $135.9m.
Earnings before interest, tax, depreciation and amortisation also lifted 10.8 per cent to $271.9m.
Shareholders will receive a dividend of 37c per share for the year, the company said.
Shares in the company tumbled 4.2 per cent in morning trade to $35.09 a share, wiping out some $217m from its market value.
The business held $105.7m in cash as of June 30.
Alongside coffee machines, Breville also produces juicers, blenders, ovens, air purifiers and microwaves.
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