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Ikea's annual profit growth slows

Swedish furniture giant Ikea reported on Tuesday sharply slower profit growth for the 2012-2013 fiscal year compared to performance in previous years. 

STOCKHOLM: Swedish furniture giant Ikea reported on Tuesday sharply slower profit growth for the 2012-2013 fiscal year compared to performance in previous years, but did not reveal the cause of the slowdown.

Net profits increased by 3.1 percent to 3.3 billion euros ($4.50 billion), Ikea group said in a statement.

In the 2010-2011 fiscal years, net profit rose by 10.3 percent and in 2011-2012 by 8.0 percent.

Revenue growth also slowed, with 3.2 percent growth at 28.5 billion euros.

In 2010-2011 and 2011-2012 revenue grew by 6.9 and 9.8 percent respectively.

The Ikea Group did not explain the causes of the slowdown but said it had "gained market share in almost all markets" and posted "strong growth in China, Russia and the US."

"Consumer spending is improving in many countries," chief executive Peter Agnefjaell said in the statement.

"While the challenging economic situation may not be over, there are positive signs."

In the beginning of January, Ikea admitted being behind in its target of doubling sales by 2020, which had "so far proved to be too aggressive", according to Goeran Grosskopf, chairman of the Ingka Holding parent company that comprises all of the Ikea businesses.

Ikea confirmed on Tuesday that it was keeping its 50-billion euro sales goal for 2020.

"We have a long-term focus," Agnefjaell said.

"We'll keep developing better products at lower prices, improving the shopping experience and becoming more accessible to our customers, for example through an improved service offer, e-commerce and continued expansion."

Ikea currently owns 305 stores in 26 countries and employs 135,000 people worldwide.

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