Jerash Holdings reported strong growth in its fiscal second quarter, with higher shipments—particularly to its largest U.S. customer—lifting revenue and profitability. The Jordan-based apparel manufacturer also forecast continued year-over-year revenue growth for the next quarter, while anticipating lower gross margins as raw-material transportation costs rise.
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Revenue and profit increased: Revenue for the quarter ended Sept. 30 rose 19.8% to $50.3 million from $42.0 million a year earlier. Gross profit climbed 45.4% to $9.1 million, and gross margin expanded to 18.2% from 15.0%.
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Higher-margin shipments and operating improvements supported margins: Jerash attributed the improvement to greater shipments to U.S. customers, which typically generate stronger margins, as well as automation-related efficiencies, advance purchases of raw materials and tighter controls on waste.
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Operating income and net income rose sharply: Operating income nearly tripled to $3.1 million from $1.1 million. Net income increased to $2.2 million, or 16 cents per diluted share, compared with $479,000, or 4 cents per share, in the year-earlier quarter.
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Costs also increased: Operating expenses rose to $6.1 million from $5.2 million, mainly because of higher sales volume and increased headcount-related costs. Other expenses reached $506,000, up from $456,000, reflecting higher interest on the mortgage used to buy a facility in early 2026 and higher costs under customer supply-chain financing programs as shipments increased.
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A lower tax rate helped: Jerash’s effective tax rate declined to 15.7% from 24.3%. The company attributed the change primarily to a Jordanian tax concession that cut its corporate income tax rate from 20% to 10%, effective October 2025.
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Next-quarter revenue is forecast to grow: Jerash expects fiscal third-quarter revenue of about $49 million to $51 million, up approximately 17% to 22% from the same quarter last year. It expects gross margin of about 16% to 17%, citing higher transportation costs for imported raw materials.
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Production is booked well into 2027: The company said its facilities are fully booked through June 2027 and that orders continue to come in strongly. It is seeking to expand capacity through renovations at a recently acquired facility and construction of a third satellite factory, supported by the Jordanian government. Both projects are expected to be completed by September 2027 and together are projected to add about 15% to 20% to production capacity.
Jerash said regional shipping disruptions and uncertainty have raised import transportation costs. It has responded with advance raw-material purchases, cost controls, waste reduction and automation. The company also cited its Jordan manufacturing base and preferential tariff treatment for qualifying exports to markets including the United States and Europe as advantages in serving customers. The outlook pairs expected sales growth with a projected step down in gross margin from the second quarter’s 18.2%.