Motion upholstery resource Man Wah Holdings reported a double-digit increase in sales for the fiscal year ended March 31, but profits were nearly cut in half due to rising labor and raw materials costs.
The Chinese company, whose shares are traded on the Hong Kong Stock Exchange, said the U.S. continues to be its largest market, accounting for about 51% of sales for the year.
U.S. sales totaled 2.23 billion Hong Kong dollars, or about $287.6 million. That's an increase of 7.9% from 2.07 billion Hong Kong dollars, or about $266.5 million, for the year ended March 31, 2011.
Worldwide sales were 4.34 billion Hong Kong dollars, or about $558.7 million, in the most recent fiscal year. That's an increase of 13.9% from 3.81 billion Hong Kong dollars, or about $490.6 million, the previous fiscal year.
Profits totaled 367.2 million Hong Kong dollars, or about $47.3 million. That compares with 679 million Hong Kong dollars, or about $87.5 million, the previous fiscal year.
Man Wah said labor costs were 33% more than the previous fiscal year, while the company spent 29.6% more on raw materials than the previous year.
The average unit cost for leather, its most important raw material, was up 17.8%, the company said.
In addition to the U.S., Man Wah sells motion furniture under the Cheers brand name in Europe, Canada, Hong Kong and mainland China.
The company also has 505 Cheers retail stores and 237 Enlanda mattress stores in China.