2 weeks Ago By Joe Gallop
Sydney-based kitchen appliance maker Breville Group saw its shares tumble nearly 5% today, shedding A$1.58 to close at A$30.04, following the announcement of new tariffs by US President Donald Trump.
Trump has implemented a new 34% tariff on Chinese goods, adding to the existing 20% levy, bringing total duties to at least 54%. This move has major ramifications for investors, particularly those with exposure to the US market. Breville, which manufactures around 90% of its products in China, is especially vulnerable, with roughly 45% of its sales coming from the US.
The company’s stock had already been in a downward trend since early February, but today’s sharp decline reflects heightened investor anxiety over potential supply chain disruptions and rising costs. Following months of steady decline, Breville’s shares are now trading nearly 23% below their 52-week high of $39.00.
Today’s trading volume spiked to 514,125 shares, more than double its average daily volume of 234,476, as investors reacted to the tariff news. Breville’s market cap now sits at A$4.55 billion, but with a P/E ratio of 34.
54, further cost pressures could impact future profitability. In response to the tariff news, Breville, which sources the remainder of its products from the EU, Mexico and Taiwan, has issued a statement assuring investors that its FY25 earnings remain on track. The company said its ongoing efforts to “diversify its manufacturing base” – targeting Mexico, Indonesia, and Cambodia – are expected to mitigate the impact of U.
S. tariffs in the long run. “The Group does not anticipate any material impact from the tariffs announced today on its FY25 result and reiterates its FY25 guidance for EBIT growth of between 5% and 10%,” the company said in a statement signed off by Joint Company Secretary Sasha Kitto.
However, the company acknowledged that beyond FY25, tariffs and broader economic uncertainty could drive up costs: “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.” Managing Director and CEO Jim Clayton added: “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.
” Despite Breville’s reassurances, market sentiment remains cautious. While Breville has maintained steady revenue growth – hitting $1.52 billion in its latest annual report – margins could tighten if tariffs significantly raise manufacturing costs.
As the trade landscape evolves, Breville’s ability to shift production outside of China will be crucial. For now, the company faces a period of heightened uncertainty, with investors closely watching how the next phase of US trade policy unfolds..
