What Jerash Holdings (US) (JRSH) Said on Its Q2 Earnings Call

Key Points

• Fiscal Q2 revenue rose 19.8% to $50.3 million, while net income more than quadrupled to $2.2 million. Gross margin expanded to 18.2%, helped by stronger U.S. shipments and operational efficiencies, despite elevated transportation costs.
• Jerash’s production facilities are booked with confirmed orders through June 2027. The company is adding capacity, including expansions expected to increase capacity by about 8% by December and a further 15%–20% by September 2027.
• For fiscal Q3, Jerash forecast revenue of $49 million to $51 million and gross margin of 16%–17%. The board also approved a quarterly dividend of $0.05 per share.

Jerash Holdings US) (NASDAQ: JRSH reported a 19.8% increase in fiscal second-quarter revenue and a more than fourfold rise in net income, as higher shipments to U.S. customers and efficiency gains helped offset elevated transportation costs.

The Jordan-based apparel manufacturer said its production facilities are fully booked through June 2027 with confirmed orders. Management is expanding capacity and discussing later delivery dates with some customers whose orders cannot be accommodated before then.

For the quarter, revenue rose to $50.3 million from $42 million a year earlier. Net income increased to $2.2 million, or $0.16 per diluted share, from $479,000, or $0.04 per diluted share.

Margins Improve Despite Logistics Costs

Gross profit rose 45.4% to $9.1 million, while gross margin expanded to 18.2% from 15%. Chief Financial Officer Gilbert Lee attributed the improvement in part to higher shipments to U.S. customers, which typically generate stronger margins, along with automation, advance raw-material purchases and tighter controls on waste.

Chief Executive Officer Sam Choi said regional shipping disruptions and uncertainty had increased transportation costs for imported materials. Head of Operations Eric Tang said operations at the Haifa and Aqaba ports had returned to near-normal levels with minimal delays, but transportation costs remained elevated.

Operating expenses increased to $6.1 million from $5.2 million, primarily because of higher sales volume and increased staffing costs. Operating income rose to $3.1 million from $1.1 million.

Asked how much of the margin improvement was attributable to lasting efficiency gains rather than early material purchases, Lee said it was difficult to separate the effects. He added that new workers can take two to three months to reach full productivity and that customer and product mix also affect margins.

Capacity Expansion and Customer Orders

Tang said all production lines are allocated to confirmed orders and will operate at full capacity through the end of June 2027. The company is asking some customers seeking earlier deliveries to revise their schedules so it can accommodate their orders afterward.

Jerash expects additions to production lines at two existing facilities to increase overall capacity by approximately 8% when completed by December. A separate project at a recently acquired facility is expected to add another 15% to 20% by September 2027, with 500 new sewing machines, additional automation and approximately 1,100 foreign workers. Lee corrected Tang’s initial statement that the project involved 11,000 foreign workers.

Lee said Jerash is prioritizing production lines at the acquired facility ahead of a planned centralized warehouse because of customer demand. The company also expects construction of a third satellite factory, supported by the Jordanian government, to be completed by September 2027. Tang said it would create approximately 500 local jobs.

Choi said Jerash may test a second shift at one factory in about three months as another way to increase capacity while limiting capital spending. Lee said the company was also looking for opportunities beyond its announced projects.

On customer demand, Tang said Jerash had secured an order for 5.35 million pieces from Korean strategic partner Hansoll. Separately, Jerash completed product development for a potentially significant winter jacket order for a Hansoll customer that could begin production at the start of fiscal 2028.

Tang also said the company had begun two trial orders for another Korean apparel company, totaling approximately 80,000 pieces, with completion expected in December. If successful, he said, they could lead to significant business in 2027.

Outlook and Dividend

For the fiscal third quarter ending December 31, 2026, Jerash forecast revenue of $49 million to $51 million and gross margin of 16% to 17%. Lee said the margin outlook reflects higher import logistics costs for raw materials and the temporary effects of onboarding employees.

Cash, cash equivalents and restricted cash totaled $16.9 million as of September 30, 2026, while net working capital was $40.6 million. Operating cash flow for the first six months of the fiscal year was $7.5 million, compared with $318,000 a year earlier.

The board approved a quarterly dividend of $0.05 per share, payable November 23, 2026, to shareholders of record on November 16.

About Jerash Holdings (US) (NASDAQ:JRSH)

Jerash Holdings (US), Inc is an apparel manufacturer and exporter that produces garments for international customers and branded clothing companies. Its product range includes jackets, shirts, pants, activewear, outerwear and other woven and knit apparel.

The company manufactures its products through operations in Jordan, including facilities located in the Al-Hassan Industrial Estate. Its Jordanian production platform supports cutting, sewing, finishing, packaging and related garment-manufacturing activities, allowing Jerash to supply finished products to customers in global markets.

Jerash Holdings serves apparel brands and retailers primarily in North America and other international markets.

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