(Bloomberg) -- Ingka Group, the largest Ikea retailer, saw a sharp decline in full-year profit after a round of price cuts and tough economic conditions weighed on the bottom line.
The Swedish flat-pack furniture seller reported a 37.5% decline in operating profit to €1.3 billion ($1.4 billion) for the financial year through August, the company said in a statement Wednesday. Expenses for the period increased slightly while revenue declined nearly 6% to €41.8 billion.
This fall, Ingka said it had invested €2.1 billion in cutting prices across a range of products. The company said that the lower pricing combined with high interest rates and continued inflation pushed down sales at Ikea Retail to €39.6 billion from €41.8 billion the previous year. Ingka operates in 31 markets and accounts for roughly 90% of Ikea sales.
The worldwide franchiser of the brand, Inter Ikea Group, earlier this month reported higher net income in the fiscal year thanks mostly to a change in the group’s funding structure. Its operating profit remained “stable” as falling costs for raw materials and transport offset the effect of price reductions.
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