Business

Ikea Enjoys Rising Profits on Growth of Budget-Conscious Shoppers
By Reuters | 11 Nov, 2025

The Swedish furniture maker has tried to absorb some of the costs added by Trump tariffs as it woos consumers feeling the pinch from several years of rising inflation.

The world's biggest retailer of IKEA furniture reported a rise in annual profit on Tuesday, while it tries to bring back cash-strapped consumers, and said it had raised prices in the U.S. less than competitors as it absorbs some tariff costs.  

In what the budget retailer said had been a year marked by economic uncertainty, supply-chain challenges, and cost-of-living pressures, its revenue fell slightly to 41.45 billion euros ($48.34 billion), from 41.85 billion the previous year. 

"Five years of cumulative inflation in society for many people ... it's a massive pressure for people to come to the end of the month," said Juvencio Maeztu, CEO of the largest IKEA franchisee Ingka Group, in an interview with Reuters.

But the amount of products sold in the financial year ending August 31 increased 1.6%, footfall was up 1.3% and online visits rose 4.6%, as IKEA stuck to a strategy of keeping prices low to attract cash-strapped consumers and gain market share.

Ingka reported an operating profit of 1.46 billion euros, up from 1.25 billion in 2024, while net profit rose to 1.41 billion euros from 0.81 billion a year ago.

Last year's results were impacted negatively by IKEA's exit from Russia, said Maeztu, who took over the CEO role at privately held Ingka Group in November. The retailer has also worked to operate stores more efficiently, he added.

INCREASES U.S. PRICES LESS THAN PEERS

While IKEA has cut prices overall, higher U.S. tariffs have forced it to increase prices on some products in the United States, which it imports from factories in Europe and China.

Maeztu said IKEA had increased prices less than its competitors in the U.S., however, adding that it had decided to absorb part of the tariff costs.

Last week Inter IKEA, which supplies furniture to IKEA stores around the world, said its annual operating profit dropped 26% as the impact of U.S. tariffs drove up costs.

The U.S. is IKEA's second-biggest market after Germany, with Ingka making about 12.6% of its sales in the U.S. in the 2025 financial year.

($1 = 0.8575 euro)

(Reporting by Greta Rosen Fondahn in Stockholm and Helen Reid in London; Editing by Matthew LewisEditing by Matthew Lewis)