IKEA Owner’s Profit Slumps as Price Cuts, Costs and Tariffs Bite

Inter IKEA Group posted a 26% drop in profit in its latest financial year as the rising costs of materials that go into its products, tariffs and one of the biggest price-cut programs in the company’s history eroded margins even as sales volumes grew.

The global franchiser of the Swedish furniture brand IKEA said operating profit declined to €1.7 billion ($1.96 billion) in the year ended Aug. 31. The company said the drop stemmed from its deliberate strategy to slash prices at the world’s biggest furniture retailer to protect sales amid weaker consumer demand and a cost of living crisis.