Jerash Holdings (US) Q1 Earnings Call Highlights

Jerash Holdings (US) (NASDAQ:JRSH) reported higher revenue, expanding gross margin and a more than fivefold increase in net income for its fiscal 2027 first quarter, as shipments to its two largest U.S. customers increased and its Korean strategic partner continued to contribute to sales.

Chief Financial Officer Gilbert Lee said quarterly revenue rose 26.7% to $50.2 million from $39.6 million a year earlier. Chief Executive Officer Sam Choi described the period as one of “exceptional financial performance,” citing record revenue, improved margins and higher profitability.

Gross profit increased 35.7% to $8.3 million, while gross margin expanded by 100 basis points to 16.4%. Lee attributed the margin improvement primarily to a larger mix of shipments to U.S. customers, which he said generally carry stronger margins, as well as efficiency gains from automation.

Operating income climbed 174% to $2.6 million from $959,000 in the prior-year quarter. Net income rose to $1.7 million, or $0.13 per diluted share, compared with $324,000, or $0.03 per diluted share, a year earlier.

Capacity Expansion and Trade Opportunity

Management said a recently announced duty-free arrangement for Jordanian apparel and textile exports to the United States has increased inquiries and purchase orders. Choi said the trade development strengthens the company’s competitive position, while Eric Tang, who leads Jerash’s Jordan operations, said the agreement reinforces the benefits of the original 2001 free-trade agreement.

Tang said the company received additional orders from Hansol Group, including expanded product categories and higher unit selling prices. He also said product development with another large garment conglomerate was nearing its final stage, with orders for a global brand anticipated in the near term. Those orders, if completed, could support fiscal 2027 growth, according to Tang.

During the question-and-answer session, Tang said Jerash’s largest customer, VF Corp., had provided projections for the coming season that were about 15% above the prior season. Ringo Ng, the company’s head of marketing, said Jerash had opened Urban Outfitters as a customer and forecast approximately $5 million of business in the first year. Ng also cited potential opportunities with Lee, Wrangler, Reebok and The North Face, including higher-value outerwear products.

Jerash is targeting approximately 15% additional production capacity by the end of calendar 2026 through expansion of two existing facilities, including new production lines and 500 additional workers. A second phase, targeted for around mid-calendar 2027, is expected to add another 20% to 25% of capacity through a smart warehouse and cutting operation, additional production lines, 500 sewing machines and automation, supported by roughly 1,100 additional workers.

• A satellite factory opened in March 2026 currently supports 130 local jobs.
• Jerash plans to expand that site to as many as 250 workers, with an estimated 5% increase in overall production capacity by the end of fiscal 2027.
• The company is also working with Jordan’s Ministry of Labour on a third satellite factory that could create about 500 jobs.

Logistics Pressure and Second-Quarter Outlook

Management said regional conflict has created periodic export-shipment delays from Haifa ports and raised transportation costs for raw materials imported from Asia. Lee said higher other expenses during the quarter reflected increased interest expense tied to supply-chain financing programs used by two major customers and letters of credit for raw-material purchases supporting Hansol-related business.

Choi said the company is seeking to improve productivity, sourcing and product mix, but cautioned that new customers and products can initially carry lower margins as production ramps. He also said logistics interruptions and higher raw-material transportation costs remain an uncertainty.

For the fiscal 2027 second quarter, Jerash expects revenue of approximately $49 million to $51 million, subject to logistics efficiency amid geopolitical uncertainty. The company’s gross-margin target is approximately 14% to 15%, reflecting higher transportation costs for imported raw materials.

As of June 30, 2026, cash equivalents and restricted cash totaled $14.5 million, net working capital was $38.1 million, inventory was $26.6 million, and accounts receivable were $5.9 million. Operating cash flow was $2.5 million for the three months ended June 30, compared with $6.5 million of cash used in operations a year earlier.

Jerash’s board approved a quarterly dividend of $0.05 per common share, payable Aug. 24 to shareholders of record as of Aug. 17.

About Jerash Holdings (US) (NASDAQ:JRSH)

Jerash Holdings (NASDAQ:JRSH) is a global designer, manufacturer and marketer of intimate apparel, sportswear and swimwear. Founded in 1994 in the Jerash special economic zone of Jordan, the company has built a vertically integrated production model that spans product design, raw material sourcing, fabric printing, sewing and finishing. By controlling each stage of the manufacturing process, Jerash maintains strict quality standards and achieves competitive lead times for its apparel collections.

Operating state-of-the-art facilities in Jordan with a workforce of more than 10,000 employees, Jerash produces both proprietary brands and private-label merchandise for major retailers.