Ikea profit rises 6.1% in latest fiscal year
Sales for year ended Aug. 31 increase 7.7%
Clint Engel -- Furniture Today, January 14, 2011
CONSHOHOCKEN, Pa. — Ikea Group's worldwide profit rose 6.1% in its 2010 fiscal year to 2.69 billion euros ($3.6 billion), according to a post on its website.
The privately held global home furnishings giant - a Top 100 company in the U.S. - said its sales for the year ended Aug. 31 increased 7.7% to 23.5 billion euros ($31.5 billion) from 21.9 billion euros ($29.2 billion) in the previous fiscal year.
The company, founded in Sweden and now owned by Stichting INGKA Foundation in the Netherlands, said opened 12 new stores in eight countries in the most recent fiscal year to end with a total of 280 stores in 26 countries. It did not break out its results for the United States.
Ikea is No. 2 on Furniture/Today's most recent Top 100 with estimated furniture, bedding and accessories sales for the previous fiscal year of $1.98 billion at 37 U.S. stores. Its U.S. operations are based in this Pennsylvania city.
"The conditions in our markets ranged from favorable to difficult," Ikea Group Vice President and Chief Financial Officer Soren Hansen said in the release.
Sales at existing stores grew by 2.4%. "Sales grew in almost all countries, with China, Russia and Portugal showing the strongest increase," he said.
Ikea said its gross margins increase to 46.1% from 44.6%, and its expenses as a percentage of revenue decreased by 2.3%.
The company also said that its commitment to sustainability continued to grow last year, with its share of solid wood product certified by the Forest Stewardship Council increasing to 23.6% from 16.2% the year before, and said it doubled its use of "more sustainable cotton" in its products.
The year, the statement said, Ikea is investing in improving its stores, "securing our supply of products and spreading the Ikea culture and spirit among our many new co-workers."
It said product prices were unchanged in the past fiscal year, but that this year it has cut them by 2.6%, thanks largely to supply chain improvements.
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