👉 Background: Breville is the Australian company that launched 92 years ago. It produces a whole range of kitchen products like toasters, kettles, and the famous coffee machines. And like many of its peers, Breville was going through a big discounting cycle over the last 2 years which lead to booming sales.

👉 What happened: Over the past 6 months, Breville shifted its strategy to less discounting. Because of this, its sales for the last 6 months lifted by just 2%—which was well below their investor's expectations and well below their guidance too.

👉 What else: But, the worst part for Breville is that their biggest competitor De'Longhi saw its revenue and profit continue to increase.

What's the key learning?

💡Your earnings are only as good as your next best competitor and your guidance, especially if you are publicly listed.

💡As we saw with JB Hi-Fi, its sales declined but it was still better than market expectations. But for Breville, it shared a profit that was 2% lower than expectations.

💡To make matters worse for Breville, they are often compared against their arch-rival De'Longhi (which uses Brad Pitt as its brand ambassador). De'Longhi has seen an impressive profit growth and a share price jump, which doesn't bode well for the comparison with Breville.

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