Jerash holdings (US) (JRSH) Q1 Earnings call transcript Aug 13, 2025
Jerash Holdings, a leading player in the global textile industry, recently released its fiscal 2025 first quarter financial results, showcasing a resilient performance amidst ongoing supply chain disruptions and raw material challenges. The company's management, including Chairman and CEO Sam Choi, CFO Gilbert Kwong-Yiu Lee, and Operations Head Eric Tang, discussed the financial results and strategic initiatives during a recent earnings call, providing insights into the company's operational and financial health.
Positive Financial Performance and Strategic Diversification
Jerash Holdings reported a 17.8% increase in revenue for the first quarter of fiscal 2025, reaching $40.9 million. This growth is attributed to an increase in shipments to major US customers, growth with new customers, and the delayed orders from the previous quarter due to logistical and production challenges. Despite the ongoing turmoil in the raw material market and ocean freight disruptions, the company's gross margin improved by over 400 basis points, demonstrating its ability to navigate through the challenges and maintain profitability.
The company's strategic diversification efforts, including expanding its customer base and product mix, have contributed to this positive momentum. Jerash Holdings' joint venture with Busana Apparel Group has been particularly successful, with orders from major brands increasing and new product categories being added to its portfolio. These initiatives are expected to position the company well for future growth as the economic environment improves.
Operational Challenges and Future Outlook
Despite the positive financial performance, Jerash Holdings faced operational challenges, primarily due to supply chain disruptions and raw material issues. Approximately 16% to 18% of orders from the previous quarter were delayed, leading to increased production costs and additional air freight expenses. The company is actively addressing these issues by seeking new vendors and exploring alternative logistics solutions to mitigate the impact of raw material shortages and transportation delays.
Looking ahead, Jerash Holdings anticipates a return to a more stable operating environment in the second half of fiscal 2025. The company expects revenue for the second quarter to increase by 11% to 13% and full-year revenue to grow by 20% to 25%. Despite the challenges, Jerash Holdings remains optimistic about its future prospects, with a gross margin goal of approximately 12% to 14% for the 2025 fiscal year.
Contingency Plans and Customer Relationships
Jerash Holdings has implemented contingency plans to minimize disruptions to its operations in the event of escalating political situations in the region. These plans include working with partners in other locations to ensure continuity. The company's ability to maintain customer confidence and loyalty, even amidst operational challenges, is a testament to its responsiveness and reliability as a manufacturing partner.
Financial Highlights and Future Prospects
The company's financial results for the first quarter of fiscal 2025 showed a net loss of $1.4 million, a significant decrease from the net income in the same period last year. This is largely due to increased logistics and labor costs, as well as higher interest expenses from supply chain financing. However, Jerash Holdings remains committed to cost reduction efforts and improving operational efficiencies to mitigate these expenses.
In conclusion, Jerash Holdings' fiscal 2025 first quarter earnings call provided insights into the company's resilience and strategic initiatives amidst operational challenges. With a focus on diversification, cost reduction, and operational improvements, Jerash Holdings is well-positioned to navigate through the current market conditions and capitalize on growth opportunities in the global textile industry.