Kitchen appliance business Breville Group Ltd (ASX: BRG) has struggled lately as moderately declining sales and earnings took the steam out of its share price.
The group sells kettles, toasters, microwaves, juicers and blenders among other things, and has substantial overseas operations in North America and the United Kingdom.
Indeed much of its recent problems have been blamed on falling sales in the US, especially in the juicer market. Although going back a little further the loss of the important Keurig distribution agreement in Canada also appeared to leave a lengthy hangover for the business. Not too long afterwards it was announced the CEO would depart having only been in the job since 2012, with a full-time replacement only starting on July 1 2015.
Investors can look forward now though and Breville has forecast mid-to-high-single digit earnings growth for the second half of 2015, versus the prior corresponding period. Delivering on this forecast would be an encouraging sign and the group should enjoy the tailwind of an Australian dollar on a downward trajectory versus both the US dollar and British pound in the second half of the financial year.
The group's products are clearly in a competitive market with soft consumer sentiment locally over the past year unlikely to have helped its sales figures. A number of other retailers including Myer Holdings Ltd (ASX: MYR) and OrotonGroup Limited (ASX: ORL) have also struggled from soft consumer spending over the past year.
Breville posted earnings per share of 37.1 cents last financial year and a marginal improvement on that would mean that at $6.50 it currently trades on around 17x estimated earnings for the 2015 financial year. The group also offers a healthy 4.2% trailing yield with forecasts for an improved dividend in the 2016 financial year.
