Breville had a good result. But that inventory build, deliberate as it was, had really better be right.
You can see what it did to cashflows,
and if they misjudge the cycle (e.g. demand slows more quickly than anticipated) that’s a lot of capital to chew up.
Mgmt argue inventory doesn’t age, become obsolete, decline in price, is a store of value. Ok. Well, let us then hope (for them) that a) the forecast sales trajectory proves correct, and…
b) that such enormously elevated multiples don’t prove hazardous to any prospective miscalculation. Great quality, love the products, but not at any price.
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