Jerash Holdings (US) Inc Q1 2026 Earnings Call Highlights: Profitability Turnaround Amid Revenue Challenges

Jerash Holdings (US) Inc reported a significant turnaround in financial performance in Q1 2026, with operating income climbing to nearly $1 million compared to a loss of over $800,000 in the same quarter last year. However, revenue declined to $39.6 million from $40.9 million last year due to shipment delays. The company has completed the first phase of a major initial order from a large US-based retailer and has seen a steady increase in new business inquiries from global brands.

Jerash Holdings (US) Inc (JRSH) reported a significant turnaround in financial performance during the first quarter of fiscal year 2026 (Q1 2026), with operating income climbing to nearly $1 million compared to a loss of over $800,000 in the same period last year. The company's revenue, however, declined to $39.6 million from $40.9 million in the same quarter last year, primarily due to shipment delays. Despite the revenue decline, the company completed the first phase of a major initial order from a large US-based retailer and has seen a steady increase in new business inquiries from global brands.

Key financial highlights for Q1 2026 include:
- Revenue: $39.6 million, down from $40.9 million year-over-year [1].
- Gross Profit: Increased 31.2% to $6.1 million from $4.6 million in the same quarter last year [1].
- Gross Margin: Improved to 15.4% from 11.3% in the same quarter last year [1].
- Operating Income: $959,000, compared to an operating loss of $829,000 in the same period last year [1].
- Net Income: $324,000 or $0.03 per diluted share, compared to a net loss of $1.4 million or $0.11 per diluted share in the same quarter last year [1].

The company also reported that its facilities are fully booked through February 2026, and it is evaluating longer-term expansion plans, including a potential five-year expansion plan with a major customer. Additionally, the company is seeing a steady increase in new business inquiries from global brands, indicating growing interest in its manufacturing capabilities and capacity.

However, the company faces several challenges, including shipment delays, geopolitical instability in the region, and ongoing tariff issues. The recent 15% US tariff on products from Jordan poses a challenge, although it remains lower than tariffs from other Asian countries. The company is also cautious about major expansion plans due to uncertainties like Middle East conflicts and tariffs.

Despite the mixed performance, the company's stock rose by 3.05% in pre-market trading, suggesting investor optimism about the company’s strategic initiatives and future growth potential. The stock's upward movement also indicates investor confidence in the company's strong balance sheet and operational improvements.

Looking forward, Jerash Holdings projects Q2 revenue between $40 million and $42 million with a gross margin of 15-16%. The company's facilities are fully booked through February 2026, and it is evaluating longer-term expansion plans, including a potential five-year expansion plan with a major customer.

References:
[1] https://finance.yahoo.com/news/jerash-holdings-us-inc-jrsh-070903959.html
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-jerash-holdings-q1-2026-misses-eps-stock-rises-93CH-4185464