Financial Market

IKEA Store Owner Full-Year Revenue Rose but Profit Hurt by Higher Rates

By Dominic Chopping

STOCKHOLM–Ingka Group, the owner and operator of the majority of IKEA stores globally, on Friday reported a 5.7% rise in annual revenue but said net profit was weighed by the impact of higher interest rates on some of its investments.

The company said that despite challenges caused by the war in Ukraine, supply-chain disruptions, increased inflation and the continued impact of the pandemic, total revenue rose to 42.04 billion euros ($43.77 billion) in the fiscal full-year to Aug. 31, across its IKEA stores, investments and shopping centre businesses.

Net profit in the period fell 82% to EUR287 million, mainly due to the development of financial market investments, it said.

“During the year, rising interest rates meant lower bond values in our financial market investments, in line with the world’s financial markets,” the company added.

Ingka has around EUR20 billion of financial assets under its management.

Net income was also hurt by the effects of scaling down operations in Russia, with the company previously saying that closing its 17 stores in Russia cost IKEA about 2% of its revenue.

Overall, Ingka said it opened 52 new IKEA locations during the year while it also increased responsible forestry investments in the U.S., Baltics, Romania and New Zealand.

“Given our consistent operating income, increased revenue, continued profits and added investment across operations, we are well-placed to deal with the current economic conditions,” said Juvencio Maeztu, deputy chief executive and chief financial officer of Ingka Group.

Write to Dominic Chopping at dominic.chopping@wsj.com

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