IKEA Group reports full-year operating profit of 3 billion euros

IKEA Group, which owns most IKEA budget furniture stores, reported on Tuesday an operating profit of 3.0 billion euros ($3.6 billion) for its fiscal year through August.

In the previous year, during which IKEA Group sold its product development, production and supply chain subsidiaries to brand owner Inter IKEA, operating profit was 4.5 billion euros.

“The decrease in operating result was mainly driven by the loss of profit from the companies that were sold in the transaction, as well as the increased costs in IKEA Retail to support multichannel growth and expansion,” the firm said in its annual summary.

The world’s biggest furniture group is known for its large out-of-town stores. But with changing shopper behavior and expectations, and with online rivals such as Amazon, IKEA is investing in e-commerce and services as well as trying new concepts such as pickup points and city-center showrooms.

IKEA stores worldwide are owned by 11 franchisees, of which IKEA Group is the biggest with 355 stores at the end of August. Franchisees pay 3 percent of their annual sales to Inter IKEA.

($1 = 0.8399 euros)