Ikea's profits jumped 10.3% in latest fiscal year

Larry Thomas (Furniture/Today) -- Casual Living, 1/23/2012 12:54:00 PM

Swedish retailer Ikea said worldwide sales increased 6.9% in the fiscal year ended Aug. 31, while profits jumped 10.3% despite higher raw materials costs.

The privately held retailer said worldwide sales totaled 24.7 billion euros, equivalent to about $31.9 billion. Total revenues, which include sales and rental income from commercial properties, were 25.2 billion euros, or about $32.6 billion.

Profits totaled 2.97 billion euros, or about $3.84 billion.

Comparable store sales rose 7%, the company said. It didn't release specific sales and income figures for its U.S. or Canadian stores.

"It's evident that what we offer is relevant to more and more U.S. customers," said Mike Ward, Ikea U.S. president. "We remain dedicated to growing even stronger as the leader in life at home, as well as a responsible partner in living a more sustainable life, while supporting our communities with socially responsible programs."

The company said a key growth driver was its lower pricing strategy on top-selling products. For example, U.S. stores dropped the price of the popular Hovas sofa from $699 to $499, and the Hemnes queen bed frame went from $299 to $199.

The reductions were made possible by shipping larger quantities through flat packing, keeping designs smart and not compromising on quality, the company said.