Ikea is one of the world's largest furniture retailers. The company has made a name for itself by selling ready-to-assemble furniture, decorations, and accessories that resonate with consumers.
While Ikea is a well-known global brand these days, it had humble beginnings. The company started in 1943 when 17-year-old Ingvar Kamprad, who grew up on the Elmtaryd farm in the southern Swedish village of Agunnaryd, registered the trademark IKEA based on the first letters of his name and where he grew up.
Ikea has grown into a very large, profitable, and popular global retailer. That has many of its fans and investors wondering whether it will ever make an initial public offering (IPO). Here's a look at everything you need to know about how to invest in Ikea, as well as some alternatives to consider while the company remains privately owned.
IPO
Is Ikea publicly traded?
Is Ikea publicly traded?
Ikea is not a publicly traded company. The Inter Ikea Foundation owns the Inter Ikea Group. The foundation is a self-owned entity. Its purpose is to ensure Ikea maintains its independence.
When will Ikea IPO?
When will Ikea IPO?
Ikea didn't have an IPO on the calendar as of late 2024. The retailer likely won't complete an IPO anytime soon. The company's owner, Inter Ikea Foundation, has one main purpose: to maintain the independence of the Ikea concept. One way to ensure Ikea remains independent is to keep it private.
How to buy
How to buy Ikea stock
You can't buy Ikea stock because it's a private company owned by a foundation (Inter Ikea Foundation) with the express purpose of protecting its independence. Given that ownership structure, investors might never get the chance to buy shares of Ikea in an IPO.
However, investors do have alternative options to Ikea worth considering. Here are three top retail stocks with excellent track records of growing value for their shareholders.
Amazon
Amazon (AMZN -3.39%) is an e-commerce leader. The company's net sales totaled $158.9 billion in the third quarter of 2024, up 11% from the year-ago period.
Meanwhile, its net income grew from $9.9 billion to $15.3 billion. Amazon's rapidly rising revenue and soaring profits have enabled it to produce robust returns for investors for many years. Its average annual return over the last decade was 30.3%, smashing the S&P 500's 13.4% annual total return.
Net Income
Costco
Costco (COST -2.34%) is a leading membership warehouse operator with almost 900 locations, including more than 600 in the U.S. Costco rang up $249.6 billion of net sales in its 2024 fiscal year, a 5% increase from the prior year. The warehouse giant's net income totaled almost $7.4 billion, up from less than $6.3 billion in the year-ago period.
Costco's steadily growing revenue and earnings have enabled it to deliver strong total returns for its investors over the last decade (almost 24% annually). Costco routinely returns a portion of its profits to shareholders through dividends. It paid $1.16 per share each quarter in late 2024, up from its prior quarterly payout level of $1.02.
Home Depot
Home Depot (HD -0.45%) is a leading home improvement retailer with more than 2,300 locations across North America. The company posted $40.2 billion in sales during the third quarter of 2024, up 6% from the prior-year period.
It aims to grow its annual sales by 3% to 4% as the home improvement market stabilizes, which should drive mid- to high-single-digit earnings per share growth. The company's steady sales, profits, and dividend growth over the years have helped drive market-beating total returns (18.4% annualized over the past decade).
Investors who want to buy one of these Ikea alternatives can purchase shares in any brokerage account. Here's a step-by-step guide on how to invest in stocks like Ikea.
Step 1: Open a brokerage account
You'll have to open and fund a brokerage account before buying shares of any company. If you still need to open one, here are some of the best-rated brokers and trading platforms. Take your time to research the brokers to find the best one for you.
Step 2: Figure out your budget
Before making your first trade, you'll need to determine a budget for how much money you want to invest. You'll then want to decide how to allocate that money. The Motley Fool's investing philosophy recommends building a diversified portfolio of 25 or more stocks you plan to hold for at least five years.
You don't have to get there on the first day. For example, if you have $1,000 available to start investing, you might want to begin by allocating that money equally across at least 10 stocks and then grow from there.
Step 3: Do your research
It's essential to thoroughly research a company before buying its shares. You should learn about how it makes money, its competitors, its balance sheet, and other factors to ensure you have a solid grasp on whether the company can grow shareholder value over the long term.
Shareholder Value
Step 4: Place an order
Once you've opened and funded a brokerage account, set your investing budget, and researched the stock, it's time to buy shares. The process is relatively straightforward. Go to your brokerage account's order page and fill out all the relevant information, including:
- The number of shares you want to buy or the amount you want to invest to purchase fractional shares.
- The stock ticker (AMZN for Amazon, COST for Costco, and HD for Home Depot).
- Whether you want to place a limit order or a market order. The Motley Fool recommends using a market order since it guarantees you buy shares immediately at market price.
Once you complete the order page, click to submit your trade and become a shareholder in one of these top retail stocks while you wait to see whether Ikea ever completes an IPO.
Investors would follow a similar process to buy an IPO stock if Ikea goes public. Should shares ever become available, fill out the order page at your brokerage account with Ikea's selected stock ticker and submit your trade.
Profitability
Is Ikea profitable?
Ikea publicly releases its annual financial results, which is rare for a privately held company. So we know it's a profitable company.
Inter Ikea Group reported that its total revenues reached 26.5 billion euros (about $27.9 billion at the exchange rate in late 2024) in its 2024 fiscal year from wholesale sales to retailers, franchise fees, and retail sales from the Ikea Delft store. That was an 8.7% increase from its 2023 fiscal year due primarily to a reduction in wholesale pricing for sales to its retailers.
Despite the lower sales, Ikea reported a higher profit. Net income rose to 2.2 billion euros ($2.3 billion) in net profit for its fiscal year, up from 1.6 billion euros (almost $1.7 billion) in the previous year. The main factor driving the profit improvement was falling costs for raw materials, commodities, and those related to transportation and logistics.
Ikea's strong and consistent profitability allows it to remain private. The company can retain its earnings to fund its operation and growth, so it doesn't need capital from outside investors.
Should I invest?
Should I invest in Ikea?
You can't invest in Ikea because it's a private company. It seems unlikely that outsiders will get the opportunity to invest in Ikea since the primary aim of the foundation that owns it is to keep it independent. However, you can invest in other retailers capitalizing on the same trends driving Ikea's growth.
For example, Amazon, Costco, and Home Depot have grown their sales and earnings at healthy clips over the years. And that has helped drive their strong total returns during the past decade. While past performance is no guarantee of future success, they're in a strong position to continue growing value for their shareholders.
ETF options
ETFs with exposure to Ikea
Many people prefer to invest passively rather than actively manage a portfolio of stocks. Exchange-traded funds (ETFs) make it easy to invest passively in the market or in specific sectors, like retail.
Exchange-Traded Fund (ETF)
While you can't gain passive exposure to Ikea because it's not a publicly traded company, you can invest in ETFs focused on retail stocks. Here are a couple of the top retail ETFs to consider:
- SPDR S&P Retail ETF (XRT -0.31%): This ETF aims to provide investors with broad exposure to the entire retail sector. It held shares of 78 companies as of late 2024, with relatively equal weighting given to each stock. Its holdings included Costco (1.3% of its assets) and Amazon (1.5%). The fund had a 0.35% ETF expense ratio.
- VanEck Retail ETF (NYSEMKT:RTH): The fund focuses on the top 25 U.S.-listed retailers. Three of its four top holdings in late 2024 were Amazon (21.2% of its assets), Home Depot (7.8%), and Costco (8.7%). The ETF also had a 0.35% expense ratio.
Related investing topics
The bottom line
The bottom line on Ikea
While you can't invest in the privately held Ikea, investors interested in the company have lots of alternatives. Leading retailers like Amazon, Costco, and Home Depot have produced strong returns over the years. Meanwhile, ETFs can provide exposure to the retail sector's growth and returns, so you could still potentially profit from stocks capitalizing on the same trends driving Ikea's growth.
FAQs
Investing in Ikea FAQs
How much is Ikea stock?
Ikea isn't a publicly traded company, so it doesn't publish its stock price.
Is Ikea privately owned?
Ikea is a privately owned company. The Inter Ikea Foundation owns Ikea.
How can I buy IKEA stock?
You can't buy Ikea stock. It's a privately held company owned by the Inter Ikea Foundation.
