Jerash Holdings (US) Q1 2027 Earnings Report

Jerash Holdings (US) EPS Results

• Actual EPS: $0.13
• Consensus EPS: $0.10
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: N/A

Jerash Holdings (US) Revenue Results

• Actual Revenue: $50.23 million
• Expected Revenue: $47.90 million
• Beat/Miss: Beat by +$2.33 million
• YoY Revenue Growth: N/A

Jerash Holdings (US) Announcement Details

• Quarter: Q1 2027
• Date: 8/10/2026
• Time: Before Market Opens
• Conference Call Date: Monday, August 10, 2026
• Conference Call Time: 9:00AM ET

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. Its J Collection and No Boundaries lines target a range of consumer demographics, while private-label services cater to department stores, specialty apparel chains and e-commerce platforms across North America. The company’s integrated approach enables clients to streamline supply chains and respond quickly to evolving fashion trends.

Jerash serves predominantly the United States and Canadian markets, supported by distribution and design offices located in the U.S. These regional hubs facilitate collaboration with retail partners on product development, merchandising strategies and logistics. Through long-standing relationships with leading retailers, Jerash has become recognized for reliability, design innovation and cost efficiency in the competitive intimate apparel sector.

Guided by an experienced management team with deep expertise in apparel manufacturing and a commitment to sustainable practices, Jerash upholds international labor and environmental standards across its operations. The company’s leadership has overseen its listing on NASDAQ and continues to pursue growth initiatives through new product introductions, geographic expansion and strategic alliances within the global apparel industry.

Jerash Holdings (US) Q1 2027 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Fiscal Q1 revenue rose 26.7% to $50.2 million, while gross margin expanded to 16.4% from 15.4%; operating income jumped 174% to $2.6 million and net income increased more than fivefold to $1.7 million, or $0.13 per diluted share.
• Positive Sentiment: The company reported stronger orders from its two largest U.S. customers and Hansol, with new opportunities including Urban Outfitters, Lee, Wrangler, Reebok, and The North Face. Management said Urban Outfitters could represent approximately $5 million in first-year orders.
• Positive Sentiment: Jerash plans to increase production capacity by approximately 15% by the end of calendar 2026, followed by a second phase expected to add another 20%–25% by mid-2027, supported by new production lines, automation, and additional workers.
• Negative Sentiment: Near-term logistics disruptions linked to Middle East conflicts are delaying Haifa shipments and increasing the cost of importing Asian raw materials. Accordingly, management expects fiscal Q2 gross margin to decline to approximately 14%–15%, although revenue is projected at $49 million–$51 million.
• Positive Sentiment: The board approved a regular quarterly dividend of $0.05 per share, payable August 24, 2026, while operating cash flow improved to $2.5 million from a $6.5 million outflow in the prior-year quarter.

Presentation

[Operator]

Good day, everyone. Welcome to the Jerash Holdings Fiscal 2027 first quarter financial results. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Roger Pondel, Investor Relations. The floor is yours.

[Roger Pondel, CEO at PondelWilkinson]

Thanks so much, operator. Good morning, everyone. Welcome to Jerash Holdings Fiscal 2027 first quarter conference call. I am Roger Pondel with PondelWilkinson, Jerash Holdings investor relations firm. On the call today from the company, our Chief Executive Officer, Sam Choi, Chief Financial Officer, Gilbert Lee, and Eric Tang, who leads the company's operations in Jordan. Also, Ringo Ng, the company's Head of Marketing, will be on the call for the Q&A session. Before I turn the call over to Sam, I want to remind our listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

[Roger Pondel, CEO at PondelWilkinson]

Such forward-looking statements are subject to numerous conditions, many of which are beyond the company's control, including the fourth in the Risk Factors section of the company's most recent Form 10-K, as filed with the Securities and Exchange Commission, and copies of which are available on the SEC's website at www.sec.gov, along with other company filings made with the SEC from time to time. Actual results could differ materially from these forward-looking statements, and Jerash Holdings undertakes no obligation to update any forward-looking statements except as required by law. With that, it is my pleasure to turn the call over to Sam Choi. Sam?

[Sam Choi, CEO at Jerash Holdings]

Thank you, Roger. We are pleased to report another quarter of exceptional financial performance, highlighted by record revenue, improved gross margins, and a significant increase in profitability. These strong results reflect the continued advantages of our Jordan-based manufacturing platform, combined with disciplined execution on delivery, quality, and operational efficiency. Fiscal first quarter revenue reached a record level of more than $15 million, representing growth of nearly 27% compared with the prior year period. We are pleased to see increased order volumes from our two largest U.S. customers, along with continued contributions from the company's strategic partner, Hansol Group in Korea. As customer demand continues to grow, we are expanding our production capacity in a disciplined manner while maintaining the quality, reliability, and service standards our customers expect. The strong momentum in our business reinforces our confidence in Jerash's ability to scale efficiently and deliver sustainable growth.

[Sam Choi, CEO at Jerash Holdings]

In addition to our operational achievements, we are encouraged by recent trade developments that further strengthen our competitive position in the marketplace. The newly announced duty-free access for Jordanian apparel and textile exports to the U.S. is a meaningful advantage for Jerash and reinforces our standing as a preferred manufacturing source for leading global brands and retailers. We believe this favorable trade environment will support future growth, create opportunities to attract new customers and strategic partners, and enhance our ability to deliver long-term value for our customers and shareholders. While our outlook remains positive, we are closely monitoring geopolitical developments in the Middle East that could affect near-term regional market conditions, including export logistics and transportation costs for raw materials sourced from Asia.

[Sam Choi, CEO at Jerash Holdings]

Although these factors may create periodic challenges, we believe our strong customer relationships, operational flexibility, and growing attractiveness in the marketplace position us well to navigate a dynamic environment and continue supporting our customers' needs effectively. We remain focused on executing our growth strategy, investing in capacity and capabilities, and leveraging the unique advantages of our manufacturing platform. With an expanded customer base, product mix, and favorable trade conditions, we believe Jerash is well-positioned to capitalize on emerging opportunities in the years ahead. With that, I will now turn the call over to Eric Tang, who is in charge of our operations in Jordan. Hi, Eric.

[Eric Tang, Head of Jordan Operations at Jerash Holdings]

Thank you, Sam. We had a very active fiscal first quarter driven by increased production for our two largest customers and new style orders placed by Hansol. We continue to actively respond to a growing volume of inquiries, particularly following the recent U.S.-Jordan trade agreement announced in July. By reinforcing the benefits of the original 2001 free trade agreement with zero duty for Jordanian apparel and textile exports, the new agreement further enhanced Jordan's attractiveness as a sourcing hub for the U.S. market. As one of the country's leading apparel manufacturers, Jerash is uniquely positioned to capitalize on this favorable trade environment and convert new opportunities into long-term customer relationships. We are pleased to have received additional orders from Hansol, including expanded product categories and higher unit sales price.

[Eric Tang, Head of Jordan Operations at Jerash Holdings]

Additional product development through another large garment conglomerate is progressing towards its final stage, with order placements for a well-known global brand anticipated in the near term. If completed as anticipated, these orders could further support our growth momentum in fiscal 2027. Turning to our previously announced expansion plans, we are on target to add approximately 15% of production capacity by the end of calendar year 2026, expanding two of our existing manufacturing facilities with additional production lines and 500 additional workers. The next stage of our expansion involves repurposing our most recently acquired facility into a smart warehouse and cutting operation, while also adding production lines. As part of this expansion, we are converting the facilities that currently serve as our warehouse and cutting department for additional production.

[Eric Tang, Head of Jordan Operations at Jerash Holdings]

These initiatives are expected to enhance our operating capability with 500 new state-of-the-art sewing machines and automation, supported by approximately 1,100 additional workers. The second phase is expected to increase capacity by approximately 20% to 25%, with completion targeted for around mid-calendar year 2027. Our partnership with the Jordanian Ministry of Labour to add capacity in rural communities continue to move forward. Our second satellite factory, which opened in March 2026, now supports 130 local jobs. We are currently expanding the site with additional floors, a project expected to increase overall production capacity by approximately 5% and bring employment at the facility to as many as 250 local workers. We expect this expansion to be completed by the end of fiscal year 2027.

[Eric Tang, Head of Jordan Operations at Jerash Holdings]

In addition, we continue to work closely with the Ministry of Labour on plans for a third satellite factory to create approximately 500 additional jobs in the surrounding community, which is about one hour away from Jerash's first satellite operation in Az-Zarqa. Together, these initiatives support Jerash's growth objectives while also contributing to local employment and economic development. At the same time, we are managing through near-term logistic challenges related to the ongoing conflicts in the Middle East. Export shipments out of Haifa ports are experiencing periodic delays, and the cost of transporting imported raw materials from Asia has increased since the conflict resumed in July. While this condition may increase some timing and cost pressure, we are working closely with our customers and suppliers and keep production flexibility to mitigate disruptions and maintain reliable delivery schedules. Overall, we see growth opportunities ahead.

[Eric Tang, Head of Jordan Operations at Jerash Holdings]

Our strategic capacity expansion plans, combined with Jordan's competitive trade advantages and our reputation for quality and reliability, continue to enhance our position in the global apparel supply chain. With that, I will now turn the call over to Gilbert to discuss our financial results. Gilbert, please.

[Gilbert Lee, CFO at Jerash Holdings]

Thank you, Eric. Revenues for the fiscal 2027 first quarter grew 26.7% to $50.2 million, compared with $39.6 million in the same quarter last year. The increase was primarily driven by higher shipments to the two major U.S. customers, as well as continuous contributions from the company's strategic partner in Korea. Gross profit increased 35.7% to $8.3 million for the fiscal 2027 first quarter, from $6.1 million in the same quarter last year. Gross margin for the quarter increased 100 basis points to 16.4%, compared with 15.4% in the same period last year. The improvement was primarily driven by higher shipments to U.S. customers that typically generate stronger margins, as well as improved efficiency gains from automation. Operating expenses totaled $5.6 million in the fiscal 2027 first quarter, compared with $5.1 million in the same quarter last year.

[Gilbert Lee, CFO at Jerash Holdings]

The increase was primarily attributable to higher sales volume, as well as increased headcount and related expenses. Operating income rose 174% to $2.6 million in the fiscal 2027 first quarter from $959,000 in the same period last year. Total other expenses were $546,000 in the fiscal 2027 first quarter, compared with $307,000 in the same quarter last year. The increase was mainly due to higher interest expenses from supply chain financing programs used by two major customers, as well as letter of credits for raw material purchases to support growing business from Hansol. Income tax expenses were $404,000 in the fiscal 2027 first quarter, compared with $329,000 in the prior year quarter. Net income advanced more than fivefold to $1.7 million, or $0.13 per diluted share in the fiscal 2027 first quarter, compared with $324,000 or $0.03 per diluted share in the same quarter last year.

[Gilbert Lee, CFO at Jerash Holdings]

Comprehensive income attributable to the company's common stockholders advanced to $1.7 million in the fiscal 2027 first quarter, compared with $328,000 in the same period last year. As of June 30, 2026, cash equivalents, and restricted cash totaled $14.5 million, and net working capital was $38.1 million. Inventory was $26.6 million, and accounts receivable amounted to $5.9 million. Net cash provided by operating activities was $2.5 million for the three months ended June 30, 2026, compared with net cash used in operating activities of $6.5 million in the same period last year. On August 7, 2026, Jerash's board of directors approved a regular quarterly dividend of $0.05 per share on its common stock, payable on August 24, 2026, to stockholders of record as of August 17.

[Gilbert Lee, CFO at Jerash Holdings]

As Sam and Eric noted earlier, we remain optimistic about the company's future as we continue to focus on cost management and operating efficiencies, navigating current market conditions. Looking immediately ahead, we expect revenue for the fiscal 2027 second quarter to be approximately $49 million-$51 million, subject to logistics efficiency amid geopolitical uncertainties. Gross margin target for the fiscal 2027 second quarter is expected to be approximately 14%-15%, taking into consideration the increased transportation costs for raw material imports. I will turn the call back to the operator as we open the call for questions.

[Operator]

Certainly. The floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold for just a few moments while we poll for questions. Your first question is coming from Ryan Meyers with Lake Street Capital Markets. Please pose your question. Your line is live.

[Ryan Meyers, Senior Research Analyst at Lake Street Capital Markets]

Hey, guys. Congrats on another strong quarter here. I am just wondering if you could start. With the announcement of the duty-free access, have you seen any inbound orders from potentially new customers? Secondly, what sort of capacity would you guys need to bring online, and at what point, potentially, do you think you could do that, should new orders come through with this new update to the duty-free?

[Sam Choi, CEO at Jerash Holdings]

Yes, Ryan. We definitely have seen increased inquiries and actually purchase orders after the announcement of the free trade or the duty-free. Eric, do you want to mention a couple of the new opportunities?

[Eric Tang, Head of Jordan Operations at Jerash Holdings]

Yes.

[Sam Choi, CEO at Jerash Holdings]

After the

[Eric Tang, Head of Jordan Operations at Jerash Holdings]

Yes

[Sam Choi, CEO at Jerash Holdings]

announcement?

[Eric Tang, Head of Jordan Operations at Jerash Holdings]

Yeah. After the announcement of the new tariff system applied to Jordan, which is the zero duty. For the old customer, like VF Corporation is our biggest customer. We received the projection for the coming season, which compared with last season, is around 15%, 15% more than last year. At the same time, we also received some more inquiries from importers, new importer from U.S., and all importers also receive more inquiries for order placement. I think Jordan is now become the most competitive manufacturing hub. This is the reason why we get so many inquiry when we expect the orders will be coming shortly. Compared with last year, it will be increased significantly.

[Ryan Meyers, Senior Research Analyst at Lake Street Capital Markets]

Got it. No, that's great.

[Ringo Ng, Head of Marketing at Jerash Holdings]

Also, this is Ringo. Maybe I add one more about the new customer. Actually, I just take a business trip back to New York and just come back. We have successfully opened a few new customers, like Urban Outfitters, that's a very big potential customer. We just opened that this year. We forecast for the first year already $5 million order business. We are still waiting for another three brands like Lee, Wrangler, and Reebok. Since they know Jordan is a zero tariff, zero duty, they know our price will be very competitive. So, we have a lot of requirement. Also, even The North Face, they want us to do something new, like the down jacket, which is the value is very high, and the padding jacket. All this new opportunity is coming.

[Ryan Meyers, Senior Research Analyst at Lake Street Capital Markets]

Got it. No, that's great to hear. With some of those new opportunities, can you maybe just talk about the product mix there and maybe the potential for gross margins largely in the second half of the year to maybe kind of rebound to above 15%, maybe back towards 16%, 17%? Just the potential for gross margin expansion as maybe the product mix changes a little bit with some of these new orders.

[Sam Choi, CEO at Jerash Holdings]

Well, Ryan, we definitely will try to achieve a higher gross margin by working hard on improving our efficiency as well as our sourcing. As we all know, once we acquire a new customer, there will be a period of time that we will experience a little bit of lower margin until we get ramped up and get to a better efficiency with new customer and new products. So, we will continue to diversify our customer base and continue to diversify our product mix. Like Ringo said, we have opportunities to get some new customers and try on some new products, which has higher ASP and higher gross margin. But at the beginning, I would not say that we will be able to achieve a high gross margin. Especially, the gross margin is facing two separate forces.

[Sam Choi, CEO at Jerash Holdings]

One is, we will, at one hand, improve our productivity and efficiency and try to achieve a higher growth margin and work on higher ASP products. However, at this point, we are also facing some uncertainties in terms of increasing raw material costs due to the logistics interruption in the area of importing raw materials and supplies from Asia because of the regional conflict of the transportation issues. We will monitor the situation, and we will try our best to come up with alternatives and control our costs.

[Ryan Meyers, Senior Research Analyst at Lake Street Capital Markets]

Got it. No, that's helpful. Thank you guys for taking my questions.

[Sam Choi, CEO at Jerash Holdings]

Thank you.

[Operator]

Once again, if you do have any questions or comments, please press star one at this time. Again, please press star one at this time if you have any remaining questions. There appear to be no further questions in queue. I would now like to turn the floor back over to CEO, Sam Choi, for closing remarks.

[Sam Choi, CEO at Jerash Holdings]

Thank you, operator. Thanks to all of you for joining us today. We appreciate your ongoing support and interest in Jerash, and look forward to updating you on our progress in the near future. Thank you very much.

[Operator]

Thank you, everyone. This does conclude today's conference call.

[Sam Choi, CEO at Jerash Holdings]

Thank you.

[Operator]

You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

[Sam Choi, CEO at Jerash Holdings]

Thank you.

[Eric Tang, Head of Jordan Operations at Jerash Holdings]

Thank you.

Participants

Analysts

• Roger Pondel, CEO at PondelWilkinson
• Sam Choi, CEO at Jerash Holdings
• Eric Tang, Head of Jordan Operations at Jerash Holdings
• Gilbert Lee, CFO at Jerash Holdings
• Ryan Meyers, Senior Research Analyst at Lake Street Capital Markets
• Ringo Ng, Head of Marketing at Jerash Holdings