Sweden's Ikea posts soaring profit

Swedish furniture giant Ikea on Friday reported a ballooning net profit in 2011 amid booming sales and increased market share in most markets and said it planned hefty investments in the year to come. The world's largest furniture retailer, which is an unlisted, family-owned company that only recently began releasing more regular earnings reports, said in its annual statement that its net profit rose 10.3 percent to 2.97 billion euros ($3.85 billion) during its 2011 fiscal year -- September 2010 to August 2011. Global sales meanwhile jumped 6.9 percent to 24.7 billion euros, Ikea said, adding that "sales grew in almost all countries with our biggest gains being in Russia, China and Poland." "We have gained market share in more or less all markets," company president and chief executive Mikael Ohlsson said in a statement. "Despite price increases for many raw materials, we have lowered prices to our customers with 2.6 percent, while the quality of our products has improved," he said, explaining the strong results. Ikea's chief financial officer Soeren Hansen meanwhile pointed out that the fiscal year had "been a challenging period for many of us," but since "being cost conscious is part of the Ikea DNA ... we're fortunate to have the resources to safely navigate uncertain economic climates." In fact, the company was doing so well, he said that it planned to invest around three billion euros in 2012 "in stores, factories and retail centres, as well as in the expansion of our wind farms and solar power sources." The company meanwhile said higher purchase prices and growing investments had sent its gross margin down to 44.2 percent during the 2011 fiscal year from 46.1 percent a year earlier. During the financial year, Ikea said it opened seven new stores in seven countries and at the end of August counted a global total of 287 stores in 26 countries. The company added 4,000 new employees to its payroll during the fiscal year 2011 bringing the total to 131,000. Europe accounted for 79 percent of sales, while North America stood for 14 percent and Russia and Asia and Australia making up the remaining seven percent.