IKEA posts record profit, gains in almost all markets

Fri Jan 20, 2012 2:57am EST
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STOCKHOLM (Reuters) - Sweden's IKEA, the world's biggest furniture retailer, posted on Friday a record profit for the fiscal 2010/11 year on the back of growing sales and a bigger share in almost all of its markets.

Net profit at the privately-held Swedish firm, known the world over for low-price, self-assembly, flat-packed furniture, rose 10.3 percent to 2.97 billion euros ($3.8 billion) in the year to last August.

Revenue grew 6.9 percent to a record 25.17 billion euros, with existing stores accounting for 2.7 percent of sales growth.

"We have gained market share in more or less all markets," IKEA Chief Executive Mikael Ohlsson said.

"Despite price increases for many raw materials, we have lowered prices to our customers by 2.6 percent, while the quality of our products has improved."

Soren Hansen, vice president for the group, said sales grew in almost all countries with the biggest gains seen in Russia, China and Poland.

In 2009/10, net profit was up 6 percent to 2.69 billion euros, while revenue was up 8 percent to a record 23.5 billion with existing stores accounting for 2.4 percent of sales growth.

IKEA plans to invest 3 billion euros in stores, factories and retail centers, as well as in the expansion of its wind farms and solar power sources this year.

The firm, owned by a foundation led by founder Ingvar Kamprad, opened 7 new stores in the year, fewer than the 12 stores it opened in 2009/10. As of the end of August 2011, IKEA had 287 stores in 26 countries and 131,000 employees.   Continued...