PGH AGM update was yesterday.

The AGM update contains quite the downgrade of NPAT relative to consensus…

…with the outlook well below street EBIT & NPAT estimates.

For a share price that’s collapsed, you’d think management would be more careful to explain what’s happening in their business segments. Look at the US retail comment, and compare to the retail sales trajectory.

I don’t want to be overly critical, but, it is their AGM, where they are speaking, in theory, directly to shareholders.

The stock is very, very cheap, and should survive the cycle. But it is not for the faint hearted.


The Breville management outlook commentary, was, I thought, quite weak. Their AGM result was a little while ago, and we wrote a note about it at the time.

I think that the working capital release eats all the margin (price discounting to move the goods, which do, in stark contrast to managements other comments, indeed depreciate in value the longer you have them in a warehouse and not on retailer shelves).

The commentary on trading conditions (goal posts, solid, steady, challenged) is maybe a shade from the “we are now coming in at the low end of the target range” type-framing, the first step in downgrading guidance more fulsomely.

It normally goes something like the above, then the “earnings will be weighted to the second half, but we maintain”, and then “we aren’t gonna make it”.

Now, none of that has happened, to be clear, but the set-up is familiar. We are very interested in Breville, thinking it a good, well managed business, and we’d like to own it, just that the composition of retail sales is evolving, demand for appliances is falling somewhat, and that we’ll get the chance a lot cheaper.

We shall see.

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