Norwegian furniture manufacturer Ekornes, owner of the Stressless brand, has reported a decline in third quarter sales.
According to its latest Q3 2024 trading update, operating revenues came in at NOK 852million, down 11% from the third quarter 2023. “The reduction reflects lower demand and weaker consumer purchasing power due to increased general living expenses,” Ekornes said.
“The decline from last year is larger in terms of volume as prices have increased. Compared to the previous quarter, revenues fell 13%, reflecting lower seasonal sales during European summer holidays.”
Revenues from the Stressless® segment, representing some 73% of Group revenues, were NOK 623 million, a decrease of 7% from the third quarter 2023, mainly due to a continued weak market development in Central and Southern Europe.
Revenues from IMG fell by 23% to NOK 173 million on lower order intake for the first nine months 2024 compared to the corresponding period 2023, particularly in North America and the Asia-Pacific region. Svane® revenues were marginally down 2% from last year, where product portfolio optimisation has supported sales and margins.
Operating earnings (EBIT) for the quarter were NOK 37 million (93), corresponding to an EBIT margin of 4.3%. This compares to 9.7% in the third quarter 2023 and 5.5% in the previous quarter. Earnings before tax for the third quarter 2024 ended at negative NOK 4 million, compared to positive NOK 4 million in the third quarter 2023.
In the UK and Ireland, sales amounted to NOK 80.1 million (£5.6m), up from NOK 42.3 million (£2.9m).
Commenting on the UK market, Ekornes said: “The UK continued its positive trend from the previous quarter as Ekornes’ focused distribution policy with selective partners and targeted promotion activities supported sales. In general, cooling inflation has supported spending power and British retail sales grew for the third month in a row in September. Utilising the momentum, the focused promotional campaigns continue and Stressless® has scheduled a large furniture fair for November to boost winter sales.”
In Europe, consumer sentiment remained “volatile” with large variations between markets. Central Europe, and particularly Germany, has been weak with a soft consumer market outlook in 2024 as the country faces a recession for the second year in a row. With the number of bankruptcies increasing and companies holding back investments, store traffic remained low in the third quarter, impacting sales negatively.
However, well-known brands are holding up better and Stressless® has gained market share in a declining market. IMG on the other hand has seen a decline, and initiatives are ongoing to reposition the brand and widen the distribution network.
Tine Hammernes Leopold, CEO of Ekornes, said: “With over 90 years of innovation and industrial growth, Ekornes continues to demonstrate a resilient business model also in times with softer market conditions. As markets for furniture and household goods remain volatile, our strong brands and extensive global presence have delivered a robust performance.
“While optimising organizational structures and maximizing supply chain efficiency, we are committed to developing our unique brands and delivering attractive products with exquisite quality to consumers worldwide.”
