(Inter) IKEA reports 26 % drop in profits

Inter IKEA, the owner of the IKEA brand, saw its operating profit fall 26 % due to higher costs due to the Trump tariffs. Sales remained virtually stable, but store sales decreased again. At the same time, customers bought more in terms of volume thanks to these price reductions.

Declines due to tariff and price pressure

Inter IKEA, which supplies stores worldwide, reported an operating profit of 1.7 billion euros for the financial year ending 31 August, compared to 2.3 billion a year earlier. Sales fell slightly, from 26.5 billion to 26.3 billion euros.

Raw material prices and logistics costs rose in the second half of the year, due to uncertainty surrounding the random US tariff announcements. Global store sales fell for the second year in a row, to 44.6 billion euros. Although IKEA generally lowered prices to attract more customers, higher import tariffs forced the company to raise prices for some products in the United States.

Lithuanian furniture supplier SBA opened its first factory in the United States last month, to produce Billy bookcases and Kallax storage furniture for the US market, in order to avoid punitive tariffs. That factory was already planned before Trump implemented his tariff increases, CFO Henrik Elm assures, but given the import tariffs, it has come at a very opportune moment.