Skip to content
    JRSH
    Earnings call· Jun 2026(Q1 FY27)

    Jerash Holdings (US) Q1 FY27 earnings call JRSH

    Aug 10, 2026 Source

    Executive summary

    Jerash Holdings Q1 FY27 — Record Revenue & Profitability Driven by Jordan-based Manufacturing Advantages

    Jerash Holdings reported record Q1 FY27 revenue and a substantial increase in profitability, leveraging its Jordan-based manufacturing platform and new duty-free access to the U.S. market. The company is actively expanding production capacity and diversifying its customer and product mix, despite facing near-term logistical challenges and increased raw material transportation costs due to geopolitical uncertainties in the Middle East.

    Highlights

    5

    • Record revenue of $50.2 million, representing 26.7% growth compared to the prior year period.

    • Net income advanced more than fivefold to $1.7 million, or $0.13 per diluted share.

    • Gross margin improved by 100 basis points to 16.4% for the quarter.

    • Operating income rose 174% to $2.6 million in Q1 FY27.

    • New duty-free access for Jordanian apparel and textile exports to the U.S. market announced in July.

    Concerns

    3

    • Geopolitical developments in the Middle East causing periodic delays in export shipments out of Haifa Ports.

    • Increased cost of transporting imported raw materials from Asia due to regional conflict, impacting Q2 FY27 gross margin target of 14%-15%.

    • Higher interest expenses of $546,000 in Q1 FY27, up from $307,000 in the prior year, due to supply chain financing and letters of credit.

    Guidance & targets

    6
    CategoryTargetConfidence
    Revenue
    $49 million to $51 million
    high materiality
    High
    Gross margin
    14% to 15%
    high materiality
    High
    Production capacity expansion
    approximately 15%
    medium materiality
    High
    Production capacity expansion (second phase)
    approximately 20% to 25%
    medium materiality
    High
    Satellite factory capacity increase
    approximately 5%
    low materiality
    High
    New customer order business
    $5 million
    medium materiality
    High

    Operational metrics

    12
    Revenue growth
    26.7%YoY
    Q1 FY27

    Compared to the prior year period.

    Gross profit growth
    35.7%YoY
    Q1 FY27

    Compared to the prior year period.

    Gross margin
    16.4%up 100 bps YoY
    Q1 FY27

    Improved due to higher-margin U.S. customer shipments and efficiency gains.

    Operating income growth
    174%YoY
    Q1 FY27

    Compared to the prior year period.

    Net income growth
    more than fivefoldYoY
    Q1 FY27

    Compared to the prior year period.

    Diluted EPS growth
    333%YoY
    Q1 FY27

    Calculated from $0.13 in Q1 FY27 vs $0.03 in Q1 FY26.

    Operating expenses growth
    9.8%YoY
    Q1 FY27

    Operating expenses increased to $5.6 million in Q1 FY27 from $5.1 million in Q1 FY26.

    Operating expenses as percentage of revenue
    11.15%
    Q1 FY27

    Calculated from $5.6 million operating expenses and $50.2 million revenue.

    Net cash provided by operating activities
    $2.5 millionvs net cash used of $6.5 million YoY
    Q1 FY27

    Significant improvement from prior year's net cash used in operating activities.

    Second satellite factory current jobs
    130
    Q1 FY27

    Number of local jobs supported by the second satellite factory, which opened in March 2026.

    Third satellite factory planned jobs
    500
    future

    Additional jobs planned for a third satellite factory in the surrounding community.

    Largest customer projection increase
    15%vs last season
    coming season

    Projection increase received from the company's biggest customer after the new duty-free announcement.

    Industry KPIs

    5
    MetricValueDetails
    Effective tax rate15.5%%
    Inventory position$26.6 millionUSD
    Operating margin sg a5.2%%
    Share buyback capital return$0.05per share
    Tariff cost exposure recovery—

    Product announcements

    1
    ProductTypeDetails
    Duty-free access for Jordanian apparel and textile exports to the U.S.expansion

    Deals & partnerships

    5
    Hanson GroupStrategic partner in Korea, contributing to U.S. sales.

    Hanson Group is a strategic partner in Korea, providing continued contributions and placing additional orders with expanded product categories and higher unit sales price.

    Jordanian Ministry of LaborCollaboration on satellite factory program for local employment and capacity expansion.

    Jerash works closely with the Ministry of Labor on plans for satellite factories to create jobs and expand production capacity in rural communities.

    Urban OutfittersNew customer relationship established.$5 millionfirst year

    Jerash has successfully opened Urban Outfitters as a new customer, with a forecast of $5 million in order business for the first year.

    Lee, Wrangler, ReebokPotential new customer relationships.

    Jerash is waiting for orders from these three brands, who are aware of Jordan's 0 duty status making Jerash's pricing very competitive.

    North FaceNew product development for a global brand.

    North Face wants Jerash to develop new products such as D Jackets and padding jackets, representing new opportunities for high-value items.

    Risks & headwinds

    3
    Geopolitical developments in the Middle Eastnear-term

    Periodic delays in export shipments out of Haifa Ports

    Mitigation: Working closely with customers and suppliers, production flexibility to mitigate disruptions and maintain reliable delivery schedules.

    Increased cost of transporting imported raw materials from Asianear-term

    Increased costs since July

    Mitigation: Monitoring the situation, seeking alternatives, controlling costs, working with customers and suppliers, production flexibility.

    Higher interest expensesQ1 FY27

    $546,000 in Q1 FY27 vs $307,000 in Q1 FY26

    Mitigation: Focus on cost management and operating efficiencies.

    What to watch in Q2 FY27

    5

    Gross margin trajectory

    Next quarter
    Current16.4% (Q1 FY27), guided 14%-15% (Q2 FY27)
    TargetRebound towards 16%-17%

    Why it matters

    Indicates success in mitigating increased raw material costs and ramping new, higher-margin products.

    Gross margin for the quarter increased 100 basis points to 16.4% compared with 15.4% in the same period last year. ... Gross margin target for the fiscal 2027 second quarter is expected to be approximately 14% to 15%. And taking into consideration the increased transportation costs for raw material imports.

    Q&A highlights

    2

    Have new duty-free access led to new customer inquiries/orders, and what capacity would be needed to support them?

    Management confirmed increased inquiries and purchase orders, including a 15% higher projection from a major customer. They have opened Urban Outfitters as a new customer with a $5 million first-year forecast and are pursuing other brands. Capacity expansion plans are already in motion to support growth.

    “We definitely have seen increased inquiries and actually purchase orders. after the announcement of the free trade or the duty free. ... we have successfully opened a few new customer 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 is the $5 million order business.”

    asked by Ryan Meyers · answered by Gilbert Kwong-Yiu Lee

    2 min read4 chapters

    Detailed Narrative

    01

    Strategic Capacity Expansion

    Jerash is executing a multi-phase capacity expansion plan to meet growing customer demand. This includes adding approximately 15% production capacity by the end of calendar year 2026 through expanding existing facilities and adding 500 workers. A second phase targets a 20-25% capacity increase by mid-calendar year 2027, involving facility repurposing, 500 new sewing machines, and 1,100 additional workers. These initiatives are designed to enhance operating capabilities and leverage automation.

    02

    Jordanian Trade Advantages and New Business Opportunities

    The newly announced duty-free access for Jordanian apparel and textile exports to the U.S. market significantly strengthens Jerash's competitive position. This favorable trade environment has led to increased inquiries and purchase orders, including a 15% higher projection from one of its largest U.S. customers for the coming season. The company has also secured Urban Outfitters as a new customer, forecasting $5 million in order business for the first year, and is pursuing opportunities with brands like Lee, Wrangler, Reebok, and North Face for higher ASP products.

    03

    Satellite Factory Program and Community Impact

    Jerash continues its partnership with the Jordanian Ministry of Labor to expand its satellite factory program in rural communities. The second satellite factory, opened in March 2026, currently supports 130 local jobs and is being expanded to increase overall production capacity by approximately 5% and employ up to 250 local workers by the end of fiscal year 2027. Plans are also underway for a third satellite factory to create approximately 500 additional jobs, contributing to local employment and economic development.

    04

    Operational Efficiency and Cost Management

    The company remains focused on improving productivity, efficiency, and sourcing to achieve higher gross margins and diversify its product mix towards higher average selling price (ASP) items. While new customer and product ramps may initially lead to lower margins, Jerash is actively working to mitigate the impact of increased raw material costs and logistics interruptions caused by regional geopolitical conflicts, aiming to control costs and maintain reliable delivery schedules.

    AI-generated summary of the company’s earnings call. Not investment advice.