IKEA Boosts Profits Despite Revenue Impact from Price Cuts

Foreks - Inter IKEA reported higher profits for 2024 thanks to low interest payments, despite a sharp decline in revenues following price reductions. Henrik Elm, CFO of IKEA, stated that Inter IKEA, which supplies franchises of the IKEA brand, lowered its prices by an average of 15% throughout the year. This drop in commodity costs, such as wood, allowed IKEA retailers to reduce prices for customers by an average of 10%. The price cuts resulted in an 8.9% decrease in Inter IKEA's revenue to 26.5 billion euros for the fiscal year ending August 31. However, Inter IKEA noted that the lower prices encouraged customers to buy more, helping to increase operating profit from 2.2 billion euros in 2023 to 2.3 billion euros.