This article first appeared on GuruFocus .
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Revenue:Fiscal Q1 2027 revenue grew 26.7% to $50.2 million, up from $39.6 million in the prior-year quarter.
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Gross Profit:Increased 35.7% to $8.3 million, compared with $6.1 million in the same quarter last year.
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Gross Margin:Improved 100 basis points to 16.4%, up from 15.4% in the prior-year period.
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Operating Expenses:Totaled $5.6 million in fiscal Q1 2027, compared with $5.1 million in the same quarter last year.
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Operating Income:Rose 174% to $2.6 million, from $959,000 in the prior-year quarter.
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Net Income:Advanced more than fivefold to $1.7 million, or $0.13 per diluted share, compared with $324,000, or $0.03 per diluted share, in the same quarter last year.
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Cash and Working Capital:Cash, cash equivalents, and restricted cash totaled $14.5 million, with net working capital of $38.1 million as of June 30, 2026.
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Inventory and Accounts Receivable:Inventory was $26.6 million, and accounts receivable amounted to $5.9 million.
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Operating Cash Flow:Net cash provided by operating activities was $2.5 million for the three months ended June 30, 2026, compared with net cash used of $6.5 million in the prior-year period.
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Dividend:Board approved a regular quarterly dividend of $0.05 per share, payable on August 24, 2026.
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Q2 Fiscal 2027 Guidance:Revenue expected to be approximately $49 million to $51 million, with gross margin targeted at approximately 14% to 15%.
Release Date: August 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Record fiscal first quarter revenue of $50.2 million, up 26.7% year-over-year, driven by higher shipments to major US customers and the strategic partner Hanson Group.
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Gross margin improved by 100 basis points to 16.4%, supported by higher-margin US shipments and efficiency gains from automation.
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Net income surged more than fivefold to $1.7 million ($0.13 per diluted share) from $324,000 in the prior year period.
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Newly announced duty-free access for Jordanian apparel exports to the US strengthens Jerash Holdings (US) Inc ( NASDAQ:JRSH )'s competitive position and is attracting new customer inquiries and orders.
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Expansion plans are on track, including adding 15% production capacity by end of calendar 2026 and a second phase targeting 20-25% more capacity by mid-2027, supported by new orders from customers like Urban Outfitters.
Negative Points
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Geopolitical conflict in the Middle East is causing periodic delays in export shipments out of Haifa Ports and increasing transportation costs for raw materials imported from Asia.
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Increased transportation costs for raw material imports are expected to pressure gross margins, with the fiscal 2027 second quarter margin target lowered to approximately 14% to 15%.
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Total other expenses rose to $546,000 from $307,000, driven by higher interest expenses from supply chain financing programs and letters of credit for raw material purchases.
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Operating expenses increased to $5.6 million from $5.1 million due to higher sales volume and increased headcount and related expenses.
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Near-term revenue guidance for the fiscal 2027 second quarter ($49 million to $51 million) is subject to logistics and efficiency challenges amid ongoing geopolitical uncertainties.
Q & A Highlights
Q: With the announcement of the duty-free access, have you seen any inbound orders from potentially new customers, and what capacity would you need to bring online to handle them? A: Gilbert Lee (CFO) confirmed a significant increase in inquiries and purchase orders following the announcement. Eric Tang (Head of Operations, Jordan) noted that the company's largest customer has projected a 15% increase in orders for the coming season, and Jordan has become the most competitive manufacturing hub, attracting many new importers. Ringo Ng (Head of Marketing) added that they have successfully opened new customers like Urban Outfitters, forecasting $5 million in first-year orders, and are waiting on three other brands (Lee, Wrangler, and Reebok) due to the competitive pricing enabled by the zero-duty status.
Q: Can you discuss the product mix and the potential for gross margins to rebound above 15% in the second half of the year with these new orders? A: Gilbert Lee (CFO) stated that while the company aims for higher gross margins through improved efficiency and sourcing, new customers typically come with a period of lower margins until production ramps up. He highlighted that gross margin faces two opposing forces: improvements from productivity and higher-ASP products versus increased raw material costs due to logistics interruptions from the regional conflict. The company is monitoring the situation and seeking alternatives to control costs.
Q: What were the key drivers behind the record revenue and significant profitability increase in the fiscal first quarter? A: Sam Choi (CEO) reported record revenue of over $15 million, a 26.7% increase year-over-year, driven by increased order volumes from the two largest US customers and continued contributions from strategic partner Hanson Group in Korea. The company also benefited from improved gross margins and operational efficiency, leading to a more than fivefold increase in net income to $1.7 million.
Q: What is the status of the company's capacity expansion plans? A: Eric Tang (Head of Operations, Jordan) detailed a two-phase expansion. Phase one is on target to add 15% production capacity by the end of calendar year 2026, with 500 additional workers. Phase two involves repurposing a recently acquired facility into a smart warehouse and cutting operation, adding 500 new sewing machines and approximately 1,100 workers, expected to increase capacity by 20-25% by mid-calendar year 2027. Additionally, a second satellite factory is being expanded to increase capacity by 5% and add up to 250 local jobs.
Q: How is the company navigating the geopolitical challenges in the Middle East? A: Eric Tang (Head of Operations, Jordan) acknowledged that export shipments from Haifa Ports are experiencing periodic delays and transportation costs for raw materials from Asia have increased since the conflict resumed in July. The company is working closely with customers and suppliers, using production flexibility to mitigate disruptions and maintain reliable delivery schedules.
Q: What are the financial expectations for the fiscal 2027 second quarter? A: Gilbert Lee (CFO) provided guidance for Q2 fiscal 2027, expecting revenue of approximately $49 million to $51 million, subject to logistics efficiency amid geopolitical uncertainties. The gross margin target is expected to be approximately 14% to 15%, taking into consideration increased transportation costs for raw material imports.
Q: What is the progress on the product development with the large government conglomerate? A: Eric Tang (Head of Operations, Jordan) stated that additional product development through another large government 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 growth momentum in fiscal 2027.
Q: What were the main drivers of the increase in operating expenses and other expenses? A: Gilbert Lee (CFO) explained that operating expenses increased to $5.6 million from $5.1 million, primarily due to higher sales volume and increased headcount. Total other expenses rose to $546,000 from $307,000, mainly due to higher interest expenses from supply chain financing programs used by two major customers and letters of credit for raw material purchases to support growing business from Hansoll.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
