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Jerash Holdings (US) (NASDAQ:JRSH) executives highlighted stronger fiscal third-quarter results, new customer-driven volume gains, and a major capacity expansion plan during the company’s fiscal 2026 third-quarter earnings call.
Quarterly performance driven by higher volumes and new customer orders
Chairman and CEO Sam Choi said Jerash delivered “sharply improved financial results across both the top line and bottom lines,” citing continued demand from longstanding global customers and the start of large orders from new strategic partner Hansoll Textile in Korea. Choi said the collaboration with Hansoll is progressing and has already produced initial large orders placed in June, as Jerash works with Hansoll on additional orders for what management described as Hansoll’s largest customer, a U.S.-based multinational omnichannel retail company.
Financial results: revenue up 18%, net income rises to $1.2 million
CFO Gilbert Lee reported fiscal 2026 third-quarter revenue increased 18% to $41.8 million, up from $35.4 million in the year-ago quarter. He attributed the increase primarily to higher shipment volumes to major export markets, including the U.S., and shipments to a new customer in Korea.
Gross profit rose 31% to $7.0 million from $5.4 million, and gross margin improved to 16.9% from 15.2%, which Lee said was driven by a favorable product mix from new customers and economies of scale.
Operating expenses were $5.1 million compared with $4.7 million, rising mainly due to higher sales volumes and increased recruitment costs, partially offset by lower stock-based compensation. Operating income nearly tripled to $1.9 million from $708,000.
Lee said total “order expenses” were $418,000 versus $252,000 a year earlier, driven primarily by increased financing needs to support growth and exchange losses. Income tax expense was $368,000 compared with $450,000 in the prior-year quarter. Net income increased to $1.2 million, or $0.09 per diluted share, from $6,000, or $0.00 per diluted share. Comprehensive income attributable to common stockholders was $1.2 million, compared with a comprehensive loss of $147,000 in the same period last year.
Balance sheet, cash flow, and dividend
As of December 31, 2025, Jerash reported cash and restricted cash of $13.2 million and net working capital of $36.4 million. Inventory totaled $26.0 million and accounts receivable were $7.8 million.
For the nine months ended December 31, 2025, net cash used in operating activities was approximately $3.5 million, compared with $581,000 for the same period in fiscal 2025. Lee said the increase in cash used was primarily driven by higher receivables during the first nine months and a smaller reduction in inventory from the beginning of the year, partially offset by improved net income and a modest increase in prepaid expenses and advances to suppliers.
The company’s board approved a regular quarterly dividend of $0.05 per share on February 3, 2026, payable February 20, 2026, to stockholders of record as of February 13.
Capacity expansion: new flagship complex and additional satellite factories
Management spent significant time discussing Jerash’s planned expansion in Jordan. Choi said the company recently agreed to acquire a 184,000-square-foot manufacturing building and land in Amman, Jordan, from the Housing Bank for Trade and Finance. He described the transaction as a milestone in Jerash’s next five-year growth strategy.
Choi said the company plans to invest approximately $3 million in renovations and $2 million in advanced manufacturing equipment, with renovations anticipated to be completed before the end of 2026. Once fully operational, the investment is expected to increase manufacturing capacity by at least 40%.
Tang said Jerash expects to begin renovations immediately and that the new facility is expected to gradually employ up to approximately 2,500 workers. He said the company plans to begin recruiting ahead of renovation completion and equipment installation to enable a faster ramp once the facility is operational.
In response to analyst questions, management said the $5 million for renovations and equipment is expected to be financed through the Housing Bank via a separate application that, according to management, will be eligible for an interest-rate subsidy from the central bank. Management said the loan would appear as long-term debt, with an eight-year repayment period and a one-year grace period on principal repayment (with principal payments beginning in February 2027). The $2.8 million for the building and land is expected to be financed as a mortgage through the Housing Bank, also described as an eight-year loan with an interest rate management said was 8% and a grace period during which the company pays interest before principal begins.
Beyond the Amman complex, management discussed plans to collaborate with the Jordan Ministry of Labor to develop two additional satellite facilities in rural towns, with completion expected within fiscal 2027. Tang said these sites are expected to add 5% to 10% of total production capacity and support local employment. Management characterized these as smaller factories intended to train local workers, produce less complex garment styles, and potentially reduce transportation costs.
Outlook, margins, and operational considerations
For the fiscal 2026 fourth quarter, Lee said the company expects revenue to increase 23% to 26% versus the same quarter last year. Jerash’s gross margin target for the fourth quarter is 14% to 16%. Lee noted that Ramadan falls at the end of March this year, compared with early April last year, which could affect production and shipping schedules and potentially push some shipments into the following quarter.
On margins, management credited the third-quarter gross margin improvement partly to efficiency gains from high-volume production associated with Hansoll orders, which reduced style changeovers and improved utilization. Management said it expects margins to be “somewhat” lower as production shifts back toward more complex, multi-style work for longtime customers, while also pointing to ongoing efficiency efforts such as hanger systems and additional automation in factories and warehouses. The company said its new facility is intended to incorporate “state-of-the-art equipment” and more automation to support cost control and output.
During Q&A, executives said they are monitoring geopolitical conditions in the region and noted that, in the past six months, both Haifa and Aqaba ports have been operating “very efficiently and very stable,” with no recent obstacles in export container deliveries, according to management. The company also addressed questions about tax rate expectations, with Lee projecting an effective tax rate of roughly 25% to 30% going forward and noting the company has engaged a tax consultant for planning efforts that are still in progress.
About Jerash Holdings (US) (NASDAQ:JRSH)
Jerash Holdings (NASDAQ:JRSH) is a global designer, manufacturer and marketer of intimate apparel, sportswear and swimwear. Founded in 1994 in the Jerash special economic zone of Jordan, the company has built a vertically integrated production model that spans product design, raw material sourcing, fabric printing, sewing and finishing. By controlling each stage of the manufacturing process, Jerash maintains strict quality standards and achieves competitive lead times for its apparel collections.
Operating state-of-the-art facilities in Jordan with a workforce of more than 10,000 employees, Jerash produces both proprietary brands and private-label merchandise for major retailers.
