Inter IKEA, the global furniture giant, revealed a remarkable surge in its annual profit, more than doubling its earnings as it successfully navigated eased cost pressures. The company, responsible for supplying stores under the IKEA brand, reported a pre-tax profit of 1.95 billion euros ($2.07 billion) for the fiscal year through August. This significant increase from the previous year’s 931 million euros was attributed to a smoother operational landscape after grappling with high costs and the closure of Russian factories.
Chief Financial Officer Martin Van Dam emphasized that results were returning to normalcy after a challenging 2022. He highlighted efforts to ensure competitive pricing for retailers, acknowledging the impact of delayed price adjustments on shouldering costs in the previous year. Van Dam noted that the current fiscal year’s returns align with the company’s historical performance.
«We were trying to make sure the retailer had the right price, and with the delay of (higher) prices, we ended up harboring a lot of the costs that year. If you look at FY21, the returns are similar to now,» Van Dam stated in an interview with Reuters.
Inter IKEA signaled its commitment to continue reducing prices, anticipating further declines in costs. The company expressed optimism that the downward trend in costs would translate into more affordable prices for IKEA customers in the upcoming year and beyond, according to an official statement.
Although Inter IKEA initiated price reductions to its franchisees in the last four months of the financial year, the full impact of these decreases on in-store prices may take some time to materialize, Van Dam explained. The company is poised to enhance the customer experience by passing on the benefits of reduced costs, reinforcing its dedication to providing quality products at competitive prices.
