|Profitable Ikea says China growth among highest
Swedish furniture giant Ikea reported an 8 percent rise in full-year profit and said it was benefiting from more cost-conscious consumers.
Net profit rose eight percent to 3.2 billion euros on of 27.6 billion euros in the year ending August 31. Sales gained 9.8 percent.
“Customers are getting more and more value conscious, which makes Ikea a better choice,’’ Mikael Ohlsson, chief executive of the Ikea Group, said in a statement.
“The economic conditions throughout the world are challenging and have affected people's lives and consumption.’’
Operating profit was down 3 percent as raw material prices increased and the company tried to keep more products in stock by raising inventories.
“To make sure that our customers always find the products they need when shopping at Ikea, inventory levels were kept deliberately high, a step that in turn supported sales,’’ Ohlsson said.
The family-owned company only recently began releasing more regular earnings reports.
“Some of the biggest growth was in China, Russia and Poland, but the US and Germany also had significant growth,'' Ohlsson said.
Europe accounted for 70 percent of sales, while North America stood for 16 percent and Russia and Asia and Australia made up the remaining 14 percent.
The Ikea Group opened 11 new stores in nine countries in the period. At the end of the year, it had a total of 298 stores in 26 countries.