Norwegian furniture manufacturer Ekornes, owner of the Stressless brand, has reported a decline in fourth quarter sales.
According to its latest Q4 2024 trading update, operating revenues came in at NOK 1,018million, down 9% from the fourth quarter 2023. “The decline was partly offset by higher prices, which have gradually materialized through the year. Compared to the third quarter 2024, revenues were up 19%, reflecting increased order intake in line with seasonality.” Ekornes said.
“Revenues from the Stressless®, representing 74% of Group revenues, were NOK 754 million, a decrease of 9% from the fourth quarter 2023 mainly due to continued weak development during 2024 in Central and Southern Europe. Furthermore, Stressless® revenues were somewhat impacted by the temporary production stop at the Morganton Stressless® facility.
“Revenues from IMG fell by 14% to NOK 194 million on weaker sales development, particularly in North America and the Asia-Pacific. Svane® revenues were unchanged from last year, ending at NOK 70 million for the quarter, where product portfolio optimization has supported both sales and margins.”
UK and Ireland sales were down from NOK 113.5 million to NOK 82.3 million during the quarter, while slightly up from NOK 321.9 million to NOK 322.2 million year-on-year.
Net other losses amounted to NOK 16 million during the quarter, mainly related to unrealized losses on currency forward contracts with no cash effect. This compares to a net gain of NOK 21 million in the fourth quarter 2023. Operating earnings (EBIT) for the quarter were NOK 105 million (60), corresponding to an EBIT margin of 10.3%.
For the full year 2024, Ekornes generated operating revenues of NOK 3 819 million (4 219). The decline of 9% compared to 2023 largely reflects weaker consumer spending on household items and furniture as the overall cost of living has risen. A reduction in volumes was partly offset by increased product prices. Underlying revenue from the Stressless® was NOK 2 832 million (3 142), revenue from IMG was NOK 741 million (825), while revenue from Svane® amounted to NOK 246 million (253). Operating earnings (EBIT) for the full year 2024 came in at NOK 155 million, up from NOK 105 million in 2023.
Commenting on market territories, Ekornes said: “The UK market remained a bright spot, with Stressless® gaining market share despite broader market declines. IMG is also making progress, prioritizing new partnerships and a more structured distribution approach.
“Looking ahead, uncertainty persists across the region, with consumer confidence closely tied to economic developments. However, Ekornes remains well-positioned to navigate the volatility, leveraging its strong brands, targeted marketing initiatives, and a flexible operating model.”
As for Europe, Ekornes continued: “The market environment remained challenging, particularly in Central Europe, where economic development and ongoing recessionary pressures in Germany continued to weigh on consumer sentiment. Store traffic remained volatile, and discretionary spending is under pressure, but promotional campaigns have yielded positive results, driving solid sales of promotional chairs and power sofas.
“Stressless® continues to hold up better than IMG, benefiting from its strong brand recognition as consumers increasingly favor established premium brands over non-branded alternatives. To strengthen its position, IMG is undergoing a strategic repositioning, with efforts focused on refining its market presence and expanding its distribution network.”
On the USA, the company added: “North America remains Ekornes’ largest market and continued to deliver a stable performance in the fourth quarter, despite retailers still managing larger inventories than pre-pandemic levels. As seen in Europe, Stressless® is holding up better than IMG, benefiting from strong brand loyalty among retailers and consumers.
“Winter campaigns and recent product launches have been well received, supporting sales momentum. The temporary closure of the Morganton facility after the flood in September was efficiently handled, resulting in minimal lost sofa orders. However, store traffic remained somewhat weak with the furniture sector trailing other retail categories.”
Looking ahead, Ekornes intends to intensify efforts to elevate customer appeal by upgrading point-of-sale experiences and strengthening market initiatives.
“Demonstrating strength amidst challenging market conditions and volatile sales, we have consistently executed a broad range of operational and financial initiatives in recent years aimed at improving our financial position. These measures, including streamlining of the organization, stringent cost control and price adjustments, have resulted in improved profitability during 2024. We enter 2025 in a solid position and increased flexibility to continue adapting to market conditions while maintaining profitability”, says Tine Hammernes Leopold, CEO of Ekornes.
