Ikea profits rise despite sales falling 8.9% in FY24
In the retail segment, revenues for the group were down 8.9% to €26.5bn (£21.9bn), compared to €29bn (£24bn) in FY23
Inter Ikea, owner of the Swedish furniture brand, has reported higher profits despite a decline in revenues during the year that ended on 31 August 2024.
In the retail segment, revenues for the group were down 8.9% to €26.5bn (£21.9bn), compared to €29bn (£24bn) in FY23. Meanwhile, operating profit slightly increased to €2.3bn (£1.9bn), up from €2.2bn (£1.8bn).
The company attributed the results to price reductions across all 63 markets by an average of 10%, which encouraged customers to “buy more”. In turn, an uplift in sales volumes became clear during the second half of the year when lower prices came into effect. Overall, sales in volumes have not grown compared to FY23.
Total Ikea sales for FY24 declined 5.3% to €45.1bn (£37.3bn), including products, food and services to customers.
During the year, the retailer welcomed 899 million visitors, an increase of 4.5% compared to the previous year. Online visitation saw an even bigger increase from 3.8 billion in FY23 to 4.6 billion in FY24, up 21%.
In August 2024, Inter Ikea Group signed a share and purchase agreement to acquire direct ownership of Ikea retail operations in the Baltic States from the current franchisee. Pending regulatory approval, the purchase is due to be finalised in December.
Henrik Elm, CFO of Inter Ikea Group, said: “Since the second half of FY24 sales volume, as well as store and online visitation, are on their way up. The declining cost trend continued into FY24, which enabled Inter Ikea Group to substantially lower wholesale prices to Ikea retailers. Effectively, this has led to an average global reduction of 10%, allowing Ikea retailers to lower their prices to customers.”
