Pretax profits at the Irish arm of Swedish furnishing giant Ikea tumbled by 70.5 per cent to €6.91 million in 2024 due to higher costs and lower revenues, new accounts show.
Accounts filed at the Companies Office show that pretax profits at Ikea Ireland Ltd decreased sharply as revenues dipped by 2.4 per cent to €246.46 million in the 12 months to the end of August 2024 against the background of “a slowing home furnishing market”.
The firm’s profits plunged as its overall costs rose by 4 per cent to €240.1 million in fiscal 2024 which coincided with the company opening its first distribution centre in Ireland at Rathcoole in April 2024 employing over 200 people.
The company paid dividends of €20 million in 2024.
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The directors state that “in 2024, despite economic challenges and a slowing home furnishing market, Ikea Ireland remained committed to long-term, purpose-driven growth”.
They state that “rather than prioritising short-term profits, Ikea focused on increasing affordability, accessibility, and sustainability to improve everyday life for more people”.
The directors state “that over €10 million was invested in lower prices while significant steps were made to expand access to products and services”.
Expanding on its investment in lower prices, the directors state that “standing with customers facing cost-of-living pressures, including those with the thinnest wallets, in FY24 we lowered prices across a third of our product range”.
They state that “while this investment impacted negatively our FY24 revenue, which decreased by 2.4%, it was the right thing to do”.
The accounts show that sale of goods reduced by 3 per cent to €237 million while sales of services increased from €8.3 million to €9.4 million.
The directors added that despite significant inflationary pressures on all other operating costs, “our total administrative expenses increased by only 16.3 per cent vs FY23” where administrative expenses rose from €56.17 million to €70.1 million.
“We strongly believe that FY24 formed a strong base for the years to come in terms of increased coworker engagement, improved customer satisfaction and growth in market share,” the directors said.
The business’s operating profits decreased by 69 per cent from €22.44 million to €7 million.
The firm recorded profits after tax of €5.43 million after incurring a corporation tax charge of €1.47 million.
Numbers employed by Ikea Ireland increased by 12 from 732 to 744 as staff costs remained at €23.99 million.
Aggregate pay to directors increased from €271,466 to €342,284.
