Q4 2026 Jerash Holdings (US) Inc Earnings Call

June 15, 2026

Operator: Greetings. Welcome to the Jerash Holdings fiscal 2026 Q4 and full year financial results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Roger Pondel, investor relations for Jerash Holdings. You may begin.

Speaker #2: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad.

Speaker #2: Please note, this conference is being recorded. I will now turn the conference over to your host, Roger Pondel, Investor Relations for Jerash Holdings. You may begin.

Speaker #2: Thank you, operator. Good morning, everyone, and welcome to Jerash Holdings' Fiscal 2026 Fourth Quarter and Full Year Conference Call. I'm Roger Pondel with Pondel Wilkinson, Jerash Holdings' investor relations firm.

Roger Pondel: Thank you, operator. Good morning, everyone, welcome to Jerash Holdings fiscal 2026 Q4 and full year conference call. I'm Roger Pondel with PondelWilkinson, Jerash Holdings investor relations firm. On the call today from the company, our Chairman and Chief Executive Officer, Sam Choi, Chief Financial Officer, Gilbert Lee, and Eric Tang, who leads the company's operations in Jordan. Before I turn the call over to Sam, I want to remind our listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Speaker #2: On the call today from the company are Chairman and Chief Executive Officer Sam Choi, Chief Financial Officer Gilbert Lee, and Eric Tang, who leads the company's operations in Jordan.

Speaker #2: Before I turn the call over to Sam, I want to remind our listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Speaker #2: Such forward-looking statements are subject to numerous conditions, many of which are beyond the company's control, including those set forth in the risk factors section of the company's most recent Form 10-K, as filed with the Securities and Exchange Commission, copies of which are available on the SEC's website at www.sec.gov, along with other company filings made with the SEC from time to time.

Roger Pondel: Such forward-looking statements are subject to numerous conditions, many of which are beyond the company's control, including those set forth in the Risk Factors section of the company's most recent Form 10-K as filed with the Securities and Exchange Commission, and copies of which are available on the SEC's website at www.sec.gov, along with other company filings made with the SEC from time to time. Actual results could differ materially from these forward-looking statements, Jerash Holdings undertakes no obligation to update any forward-looking statements except as required by law. With that, it is my pleasure to turn the call over to Sam Choi. Sam?

Speaker #2: Actual results could differ materially from these forward-looking statements, and Jerash Holdings undertakes no obligation to update any forward-looking statements except as required by law.

Speaker #2: And with that, it is my pleasure to turn the call over to Sam Choi. Sam?

Speaker #3: Thank you, Roger. I'm pleased to report that Jerash closed fiscal 2026 with strong fourth quarter performance and record revenue for the full year. This strong performance was driven by increasing demand from the company's long-outstanding key customer.

Sam Choi: Thank you, Roger. I'm pleased to report that Jerash closed the fiscal 2026 with outstanding Q4 performance and record revenue for the full year. This strong performance was driven by increasing demand from the company's long-outstanding key customer, as well as growing contribution from newer customers, including Hansol Group in South Korea and other customers that have been acquired in recent years. Building on this momentum, the results reflected robust top-line growth and a meaningful improvement in profitability. These gains were supported by enhanced production capabilities and operational efficiencies, with increased automation and economies of scale, enabling a more balanced sales profile and improved margins throughout the year. We're confident in our ability to sustain this progress and continue delivering solid performance.

Speaker #3: As well as growing contribution from newer customers, including Hancho Group in South Korea, and other customers that have been acquired in recent years. Building on this momentum, the results reflected robust top-line growth and a meaningful improvement in profitability.

Speaker #3: These gains were supported by enhanced production capabilities and operational efficiencies. With increased automation and economies of scale enabling a more balanced sales profile and improved margins throughout the year, we're confident in our ability to sustain this progress and continue delivering solid performance.

Sam Choi: I'm pleased to report that the last shipments under Hansoll's initial large order for 3 million pairs of girls socks were completed early in the fiscal Q4. The products, and in turn, were well received by Hansoll's largest customer, a US-based multinational omni-channel retailer, reflecting Jerash's strong production quality and online delivery performance. We have since received two additional orders from Hansoll for the same end customer. We continue to cultivate relationships with additional global brands and strategic partners as part of our broader strategy to diversify both our customer base and product mix, as well as to support more stable year-round production and reduce impact of seasonality on our business. Together with our planned capacity expansion, these initiatives position us to deliver a steady pipeline of profitable growth. As we scale, our team remains focused on further improving gross margins while maintaining disciplined operational execution and cost control.

Speaker #3: I'm pleased to report that the last shipments under Hancho's initial large order for 3 million pairs of girls' shorts were completed early in the fiscal fourth quarter.

Speaker #3: The products, in turn, were well received by Hancho's largest customer, a US-based multinational omnichannel retailer. Reflecting Jerash's strong production quality and on-time delivery performance, we have since received two additional orders from Hancho for the same end customer.

Speaker #3: We continue to cultivate relationships with additional global brands and strategic partners as part of our broader strategy to diversify both our customer base and product mix.

Speaker #3: as well as to support more stable, year-round production and reduce the impact of seasonality on our business. Together with our blended capacity expansion, this initiative positions us to deliver a steady pipeline of profitable growth.

Speaker #3: As we scale, our team remains focused on further improving gross margins while maintaining disciplined operational execution and cost control. To support growing demand through our phased and capital division expansion strategy, we have renovated and expanded several manufacturing facilities and optimized warehouse capacity.

Sam Choi: To support growing demand through our phased and capital-efficient expansion strategy, we have begun renovating and expanding several manufacturing facilities and optimizing warehouse capacity, including a newly acquired building, rather than concentrating our investment in a single fresh production complex. The first phase of renovation is expected to increase production capacity by approximately 15% and add 700 workers by the end of calendar year 2026. The remaining expansion is scheduled for completion by end 2027 and is expected to contribute an additional 20% to 25% in production capacity. With that, I will now turn the call over to Eric Tang, who is in charge of our operations in Jordan. Eric?

Speaker #3: Including a newly acquired building, rather than concentrating our investment in a single fractured production complex, the first phase of renovation is expected to increase production capacity by approximately 15% and add 700 workers by the end of calendar year 2026.

Speaker #3: The remaining expansion is scheduled for completion by the end of 2027 and is expected to contribute an additional 20% to 25% in production capacity. With that, I will now turn the call over to Eric Tang, who is in charge of our operations in Jordan.

Speaker #3: Eric?

Speaker #4: Thank you, Sam. Jordan continues to be recognized as one of the world's preferred manufacturing hubs. Supported by its extensive network of free trade agreements, a highly skilled and cost-competitive workforce, and a strategic geographic location that provides stable access to major markets despite broader regional uncertainty, with both the Akhbar and Haifa ports fully open and operating normally, along with cooperation from customs and logistics partners, we were able to complete additional export shipments during the past quarter.

Eric Tang: Thank you, Sam. Jordan continues to be recognized as one of the world's preferred manufacturing hubs, supported by its extensive network of free trade agreements, a highly skilled and cost-competitive workforce, and a strategic geographic location that provides stable access to major markets despite broader regional uncertainty. With both the Aqaba and Haifa ports fully open and operating normally, along with cooperation from customs and logistic partners, we were able to complete additional export shipments during the past Q4, despite the seasonal impact typically associated with the month-long Ramadan and Eid holiday period. As just now Sam mentioned, we are encouraged by the positive feedback from Hansoll's end customer regarding Jerash's production quality and delivery timelines and have since received additional orders from Hansoll for different styles. In addition, buyers from our key customer have placed large orders for our fiscal 2027 year.

Speaker #4: Despite the seasonal impact typically associated with the mild, long Ramadan and the Eid holiday period, as Sam just mentioned, we are encouraged by the positive feedback from Hancho's end customer regarding Jerash's production quality and delivery timelines.

Speaker #4: And have since received additional orders from Hancho for different styles. In addition, buyers from our key customer have placed large orders for our fiscal 2027 year.

Speaker #4: As a result, I'm happy to report that our facilities are now fully booked through December 2026. Turning to our expansion plans, we are increasing capacity in a controlled manner and in phases, while maintaining high production output.

Eric Tang: As a result, I'm happy to report that our facilities are now fully booked through December of 2026. Turning to our expansion plans, we are increasing capacity in a controlled manner, in phases, while maintaining high production output, and we have begun adding production lines at two of our existing manufacturing facilities. At the same time, we are converting our newly acquired facility into a centralized warehouse to further optimize operational efficiency. By the end of calendar year 2026, we expect to have increased capacity by approximately 15%, supported, as Sam mentioned, by the addition of 700 new workers. The second phase of our expansion will provide converting to one facility that is currently functioning as a centralized cutting department to a production factory by adding 500 new state-of-the-art sewing machines and automation, supported by approximately 1,100 additional workers.

Speaker #4: We have begun adding production lines at two of our existing manufacturing facilities. At the same time, we are converting our newly acquired facility into a centralized warehouse to further optimize operational efficiency.

Speaker #4: By the end of calendar year 2026, we expect to have increased capacity by approximately 15%, supported, as Sam mentioned, by the addition of 700 new workers.

Speaker #4: The second phase of our expansion will convert one facility that is currently functioning as a centralized cutting department to a production factory by adding 500 new state-of-the-art sewing machines and automation.

Speaker #4: Supported by approximately 1,100 additional workers. We expect the second phase of expansion to contribute an additional 20% to 25% increase in capacity, with completion planned by mid-calendar year 2027.

Eric Tang: We expect the second phase of expansion to contribute an additional 20% to 25% increase in capacity, with completion planned by mid-calendar year 2027. As we mentioned during the last conference call, our collaboration with the Jordan Ministry of Labor to develop additional facilities in rural towns is proceeding well. Our first satellite factory, established in partnership with the Ministry of Labor, was in 2019. A second satellite factory just became operational in March 2026 and currently employing 130 local workers. We are planning to expand this site by additional floors, which will increase our production capacity by approximately 5% and employ up to 250 local employees. This project is targeted for completion by the end of fiscal year 2026, 2027, sorry.

Speaker #4: As we mentioned during the last conference call, our collaboration with the Jordan Ministry of Labor to develop additional facilities in rural towns is proceeding well.

Speaker #4: Our first satellite factory, established in partnership with the Ministry of Labor, was in 2019. A second satellite factory just became operational in March 2026 and is currently employing 130 local workers.

Speaker #4: We are planning to expand this site by adding additional floors, which will increase our production capacity by approximately 5% and employ up to 250 local employees.

Speaker #4: This project is targeted for completion by the end of fiscal year 2026. In addition, we continue to work closely with the Ministry of Labor on plans for a first satellite factory, which is expected to create approximately 500 additional jobs in the surrounding community outside of Asheri.

Eric Tang: In addition, we continue to work closely with the Ministry of Labor on plans for first satellite factory, which is expected to create approximately 500 additional jobs in the surrounding community outside of Al-Salt, which is about one hour away from Jordan's first satellite factory in Al-Hasa. Together, this initiative support Jerash's growth objectives, while also contributing to local employment and economic development. Our long-term strategy is focused on sustaining growth momentum with an objective of doubling our production capacity over the next few years, as we broaden our customer base and enhance our product mix. By strategically optimizing capacity, we aim to deliver stronger, more predictable top-line growth alongside improved margin performance, enhanced operating leverage throughout the year. With that, I will turn the call over to Gilbert to discuss our financial results. Gilbert, please.

Speaker #4: Which is about one hour away from Jordan's first satellite factory in Al-Hasa. Together, this initiative supports Jerash's growth objectives, while also contributing to local employment and economic development.

Speaker #4: Our long-term strategy is focused on sustaining growth momentum, with an objective of doubling our production capacity over the next few years. As we broaden our customer base and enhance our product mix, by strategically optimizing capacity, we aim to deliver stronger, more predictable top-line growth alongside improved margin performance and enhanced operating leverage throughout the year.

Speaker #4: With that, I will turn the call over to Gilbert to discuss our financial results. Gilbert, please.

Speaker #5: Thank you, Eric. Revenue for the fiscal 2026 fourth quarter grew 46.6% to $42.9 million from $29.3 million in the same quarter last year.

Gilbert Lee: Thank you, Eric. Revenue for the fiscal 2026 Q4 grew 46.6% to $42.9 million from $29.3 million in the same quarter last year. The increase was primarily driven by increased export shipments to the company's longstanding key customers, as well as orders from newer customers, including Hansol Group in South Korea and others that we developed in recent years. Gross profits increased 40.4% to $7.4 million for the fiscal 2026 Q4, from $5.2 million in the same quarter last year. Gross margin for the quarter was 17.1%, compared with 17.9% in the same period last year. Operating expenses were $5 million in the fiscal 2026 Q4, compared with $4.8 million in the same quarter last year. As a percentage of revenue, operating expenses fell by nearly five percentage points to 11.7% from 16.4% in the Q4 of fiscal 2025.

Speaker #5: The increase was primarily driven by increased export shipments to the company's long-standing key customers, as well as orders from newer customers, including Hancho Group in South Korea and others that we developed in recent years.

Speaker #5: Gross profit increased 40.4% to $7.4 million for the fiscal 2026 fourth quarter, from $5.2 million in the same quarter last year. Gross margin for the quarter was 17.1%, compared with 17.9% in the same period last year.

Speaker #5: Operating expenses were $5 million in the fiscal 2026 fourth quarter, compared with $4.8 million in the same quarter last year. As a percentage of revenue, operating expenses fell by nearly 5 percentage points to 11.7% from 16.4% in the fourth quarter of fiscal 2025.

Speaker #5: This reduction reflects improved control over export logistics costs and lower stock-based compensation. Operating income rose more than five times to $2.3 million in the fiscal 2026 fourth quarter from $434,000 in the same quarter last year.

Gilbert Lee: This reduction reflects improved control over export logistics costs and lower stock-based compensation. Operating income rose more than five times to $2.3 million in the fiscal 2026 Q4, from $434,000 in the same quarter last year. Total other expenses in the Q4 were $399,000, including $383,000 in interest expenses, compared with $254,000 in the same quarter a year earlier, which included $371,000 of interest expenses. Income tax expenses were $270,000 in the fiscal 2026 Q4, compared with $324,000 in the prior year quarter. Net income increased to $1.7 million, or $0.12 per diluted share for the fiscal 2026 Q4, from a net loss of $144,000, or $0.01 per share, for the same quarter last year.

Speaker #5: Total other expenses in the fourth quarter were $399,000, including $383,000 in interest expenses, compared with $254,000 in the same quarter a year earlier, which included $371,000 of interest expenses.

Speaker #5: Income tax expenses were $270,000 in the fiscal 2026 fourth quarter, compared with $324,000 in the prior year quarter. Net income increased to $1.7 million, or $0.12 per diluted share, for the fiscal 2026 fourth quarter, from a net loss of $144,000, or $0.01 per share, for the same quarter last year.

Speaker #5: Comprehensive income attributable to the company's common stockholders advanced to $1.6 million in the fiscal 2026 fourth quarter, from a comprehensive loss of $49,000 in the same quarter last year.

Gilbert Lee: Comprehensive income attributable to the company's common stockholders advanced to $1.6 million in the fiscal 2026 Q4 from a comprehensive loss of $49,000 in the same quarter last year. Since tariffs are mostly paid by the company's customers, the overall impact on Jerash's bottom line has not been material. As of 31 March 2026, cash and restricted cash total $12.5 million and net working capital was $36.7 million. Inventory was $30 million and accounts receivable amounted to $5.7 million. Net cash provided by operating activities was approximately $2.5 million for the fiscal ended 31 March 2026, compared with $1.4 million in fiscal 2025 year.

Speaker #5: While this upward numerous while there were numerous changes to tariffs during fiscal 2026 and additional changes are anticipated in future years but since tariffs are mostly paid by the company's customers the overall impact on Jerash's bottom line has not been material.

Speaker #5: As of March 31, 2026, cash and restricted cash totaled $12.5 million, and net working capital was $36.7 million. Inventory was $30 million, and accounts receivable amounted to $5.7 million.

Speaker #5: Net cash provided by operating activities was approximately $2.5 million for the fiscal year ended March 31, 2026, compared with $1.4 million in fiscal year 2025.

Speaker #5: The increase was primarily attributable to net income of $33.6 million during fiscal 2026, compared with a net loss of $0.8 million during fiscal 2025.

Gilbert Lee: The increase was primarily attributable to net income of $33.6 million during fiscal 2026, compared with a net loss of $0.8 million during fiscal 2025, partially offset by higher accounts receivable, inventory, and accrued expenses. On 4 May 2026, Jerash's board of directors approved a regular quarterly dividend of $0.05 per share on its common stock, paid on 21 May 2026 to stockholders of record as of 14 May 2026. As both Sam and Eric said earlier, we are optimistic about the future of Jerash and remain committed to disciplined cost management and operating efficiency as we continue to execute our expansion plans and growth strategy. Looking ahead for the near term, we expect revenue for the fiscal 2027 Q1 to increase by 20% to 22% over the same quarter of last year, with a gross margin target for the fiscal 2027 Q1 of 15% to 17%.

Speaker #5: Partially offset by higher accounts receivable, inventory, and accrued expenses. On May 4, 2026, Jerash's Board of Directors approved a regular quarterly dividend of $0.05 per share on its common stock, payable on May 21, 2026, to stockholders of record as of May 14, 2026.

Speaker #5: As both Sam and Eric said earlier, we are optimistic about the future of Jerash and remain committed to disciplined cost management and operating efficiency.

Speaker #5: As we continue to execute our expansion plans and growth strategy, looking ahead to the near term, we expect revenue for the fiscal 2027 first quarter to increase by 20 to 22 percent over the same quarter of last year.

Speaker #5: With a gross margin target for fiscal 2027 first quarter of 15 to 17 percent. We will now open the call for questions, and I will turn the call back to the operator.

Gilbert Lee: We will now open the call for questions, I will turn the call back to the operator.

Speaker #6: Certainly. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Your first question for today is from Ryan Meyers with Lake Street Capital Markets.

Speaker #6: A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Speaker #6: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we queue for questions.

Speaker #6: Your first question for today is from Ryan Myers with Lake Street Capital Markets.

Speaker #7: Hey, guys. Thanks for taking my questions. You know, congrats on the solid progress and the strong quarter. Just first question for me. If we think about what you guys gave for these first quarter guidance and, you know, all the order flow that you're seeing through the rest of the year, you know, how should we think about the potential growth rate on a full-year basis?

Ryan Meyers: Hey, guys. Thanks for taking my questions. Congrats on the solid progress and the strong quarter. First question for me, if we think about what you guys gave for the Q1 guidance and all the order flow that you're seeing through the rest of the year, how should we think about the potential growth rate on a full year basis and as we proceed into the previous three quarters? Do you think that 20% to 22% growth is sustainable? I know you'll face some tougher comps in the H2 of the year. How we should think about things directionally for the full year.

Speaker #7: And then as we proceed into the previous three quarters, just, you know, do you think that 20% to 22% growth is sustainable? I know you'll face some tougher comps in the second half of the year.

Speaker #7: Just, you know, how we should think about things directionally for the full year.

Speaker #8: Well, actually, we haven't really projected that far out, because, as you know, we are pretty much limited—the growth of our production and sales is pretty much limited by our capacity.

Gilbert Lee: Well, actually, we haven't really projected that far out because, as you know, we are pretty much limited. The growth of our production and sales are pretty much limited by our capacity. As Eric mentioned, we are fully booked through December of 2026, and we could make some changes, or there's still room for changes in our customer mix and product mix. The overall number for fiscal 2027, it is still uncertain. There will definitely be growth, and we will continue to do everything we could to maximize our capacity utilization and provide as much top-line growth as possible, and also at an optimized margin and profitability. As we are expanding our capacity, we want to do it in a way that doesn't interrupt our normal operation. First quarter, we're pretty solid. We know what orders we have and what we're going to produce.

Speaker #8: As Eric mentioned, we are fully booked through December of 2026. We could make some changes, or there's still room for changes.

Speaker #8: In our customer mix and product mix, the overall number for fiscal 2027 is still uncertain. But there will definitely be growth, and we will continue to do everything we can to maximize our capacity utilization.

Speaker #8: And, provide, as much top-line growth as possible and also at a at an optimized, margin and profitability. As, as we are, expanding our capacity, we want to do it in a way that doesn't that doesn't interrupt our, our normal operation and so first quarter, we're pretty we're pretty solid.

Speaker #8: We know what orders we have and what we're going to produce. But even in the second quarter, there's still some room for changes. So we really cannot project what the growth percentage for the full year is.

Gilbert Lee: Even Q2, there's still some rooms for changes. We really cannot project what the growth percentage for the full year is. For the Q1, we know we're going to be able to grow from 20% to 22% over the Q1 of fiscal 2026.

Speaker #8: But for the first quarter, we know we're going to be able to grow from 20 to 22 percent over the first quarter of fiscal 2026.

Speaker #7: Okay, got it. And then, just thinking about the facilities that you guys have booked through December of 2026, how much of that is firm purchase orders from your customers, or just customers forecasting or, you know, expecting production?

Ryan Meyers: Okay. Got it. Just thinking about the facilities that you guys have booked through December 2026, how much of that is firm purchase orders from your customers or just customers forecasting or expecting production? How much of that is 100% purchase orders?

Speaker #7: How much of that is, you know, like 100 percent purchase order?

Speaker #8: No, it's not 100 percent purchase order. Usually, our customers will project our six to nine months' worth of what they need.

Gilbert Lee: No, it's not 100% purchase order. Usually, our customers will project a 6 months to 9 months worth of what they need from our production facilities. We will do our pricing, we will do our sample development, and I think it will be probably 30 to 60 day out, we will receive the purchase order.

Speaker #8: from our production facilities. And then we will do our pricing. We will do our sample development, and I think it will be probably 30 to 60 days out.

Speaker #8: Then we will receive the purchase order.

Speaker #7: Okay, got it. Appreciate it. Thanks for the question.

Ryan Meyers: Okay. Got it. Appreciate it. Thanks for the question.

Eric Tang: Sorry, Gilbert. Allow me to say a few words.

Speaker #9: sorry, Gilbert, allow me to say allow me to say a few words. Okay, the reason the reason why we, we, we say we are booked through the end of December production means we are planning according to what the customers' requirement because we receive projection.

Ryan Meyers: Yep.

Eric Tang: Okay. The reason why we say we are booked through the end of December, production, means we are planned according to what the customer's requirement, because we receive projection, and 80% already confirmed order, and the balance, the customer will confirm in the coming one or two months. According to our experience, for so many years running the production, 99%, the customer will confirm the exact order. Okay. 99%. Okay. Got it. No, that's helpful to understand. Thanks, guys.

Speaker #9: And the 80 percent are already confirmed orders, and for the balance, the customer will confirm in the coming one or two months, according to our experience. Okay, so for so many years running the production, 99 percent—okay—the customer will confirm the exact order.

Speaker #9: Okay. 99 percent.

Speaker #7: Okay, got it. No, that's helpful to understand. Thanks, guys.

Speaker #9: Thank you.

Gilbert Lee: Thank you.

Speaker #6: Your next question is from Mike Baker with D.A. Davidson.

Operator: Your next question is from Mike Baker with D.A. Davidson.

Michael Baker: Hey, thanks. Hansoll first order went well. I think you said 3 million units, and now there's been two follow-up orders. Can you just order magnitude size those follow-up orders was the 3 million? It wasn't a test per se, but as you prove your ability to deliver high quality on time, does the size of the additional orders increase?

Speaker #10: Hey, thanks. So Hansell, the first order went well. I think you said 3 million units, and now there have been two follow-up orders. Can you just order-of-magnitude size those follow-up orders?

Speaker #10: Was the $3 million—I don’t, it wasn’t a test per se, but, you know, as you prove your ability to deliver high quality on time, does it—do the size of the additional orders increase?

Speaker #8: Eric, what are the two follow-up orders from Hansell? What is the quantity? Hello, Eric?

Gilbert Lee: Eric, what are the two follow-up order from Hansoll? What is the quantity? Hello, Eric.

Speaker #9: So, the two confirmed orders from Hansell. Okay. Firstly, one of the orders is, more or less, the same as the group shot we have been doing last year.

Eric Tang: The two confirmed order from Hansoll. Firstly, one of the order is more or less the same, like the girl short we have been doing last year. This is more or less like a repeat order, but our quantity is around 3 million pieces, but this is only for season one. Hansoll told me that we will have season two, season three, and season four. Season one means starting the production from end of August until next January. We are receiving projection also for season two. But it will start in February. Season three and season four will continue. The second order, which is another style, which is the less quantity, is around 1.3 million pieces. Also from Hansoll.

Speaker #9: So, this is more or less like a repeat order, but our quantity is around 3 million pieces. However, it is only for season one.

Speaker #9: Hansell told me that we will have season two, season three, and season four. Season one means starting the production from the end of August until next January.

Speaker #9: And then season two, okay, we are receiving projections also for season two, okay, but it will start in February. And then season three and season four will continue.

Speaker #9: The second order, which is another style—okay—which is the less quantity, is around 1.3 million pieces. Okay. Also from Hansell. And apart from these two orders, we have been—we continue discussing with a lot of, I think more like five or six styles of orders, for which we have already gone through all the pricing exercises.

Eric Tang: Apart from these two orders, we continue discussing with a lot of, I think, more of five or six style of order, of which we are already go through all the pricing exercise. We are still waiting for the confirmation from the buyer. I am sure that's because the end buyer maybe need more consideration because previously there's a situation in the Middle East is not very comfortable for them. They told us that if the ceasefire or any peace agreement, initial or, I mean, temporary or long-lasting one will be signed, they will immediately place more order to Jordan as they consider Jordan is the still most competitive manufacturing country base.

Speaker #9: We are still waiting for the confirmation, from the buyer. Okay. I am sure that's because, the buyer the environment may be need the more consideration because in previously, there's a w there's a situation in the Middle East is not very comfortable for them.

Speaker #9: But they told us that if the ceasefire or any peace agreement, initial or temporary or long-lasting, will be signed, they will immediately place small orders to Jordan, as they consider Jordan is still the most competitive manufacturing country base.

Speaker #10: Understood. Great. thank you. And so, any more just one additional follow-up. this is more are these more fashion sort of higher margin goods or are they more basic goods, which I know come in at a lower margin?

Michael Baker: Understood. Great. Thank you. Just one additional follow-up. Are these more fashion, sort of higher margin goods, or are they more basic goods, which I know come in at a lower margin?

Speaker #9: Actually, okay, for the Hansell order, maybe Gilbert, you can answer.

Eric Tang: Actually, okay, for the Hansoll order. Maybe, Gilbert, you can answer.

Speaker #8: No, you, you can answer. But, but basically, the, the Hansell orders, they are more basic, simple styles. However, we were able to, we were able to produce them at a much more efficient, way as well as, within the benefit of economies of scale.

Gilbert Lee: No, you can answer. Basically, the Hansoll orders, they are more basic, simple styles. However, we were able to produce them at a much more efficient way, as well as reaping the benefits of economies of scale. The margin of these Hansoll orders are actually very, very good.

Speaker #8: So the margin of these Hansell orders is actually very, very good.

Speaker #10: So then can you one last one, the remind us, you know, gross, gross margins, the, the quarter you just reported were, were certainly higher than consensus, but were down, I think, about 90 basis points year over year.

Michael Baker: Can you, one last one, remind us gross margins the quarter you just reported were certainly higher than consensus, but were down, I think, about 90 basis points year-over-year. What was the drag?

Speaker #10: What, what, what was the drag?

Speaker #8: You mean compared to the fourth quarter of 2025, right?

Gilbert Lee: You mean comparing to the Q4 of 2025, right?

Speaker #10: Correct. Exactly.

Michael Baker: Correct. Exactly.

Speaker #8: I remember the sales for fiscal fourth quarter 2025 were kind of low. There were some delays in shipping out in the fourth quarter.

Gilbert Lee: I remember the sales for fiscal for Q4 2025 was kind of low. There were some delays in shipping out in Q4 2025. There were some congestions at the port, so we weren't able to ship out everything we produced. I think there was some mix issues. We basically ship out most of the orders that were with customers such as VF with higher margin, and we weren't able to produce a lot of the CM, what we call cut and make orders with lower margin. We pretty much concentrate on producing higher margin and tend to produce and ship out higher margin products in Q4 2025. The impact from the Ramadan holiday and also the Eid holiday in Q4 2025 was more significant.

Speaker #8: For 2025, there were some, congestions, at the ports. So we weren't able to ship out everything we produced. Now, the I think there was some mixed issues, we, we basically ship out most of the orders that were with customers such as VF, with higher margin, and we weren't able to, to produce, a lot of the DM or what we call cut and make orders with lower margin.

Speaker #8: So we pretty much concentrate on producing higher-margin, and continue to produce and ship out higher-margin products in Q4 of 2025. And the impact from the Ramadan holiday and also the Eid holiday in Q4 of 2025 was more significant.

Speaker #8: But this quarter, this year, Q4 2026, we were able to continue to produce, because I think we pretty much learned from our past experience.

Gilbert Lee: This year, 2026 Q4, we were able to continue to produce and because I think we pretty much learned from our past experience how to handle the disruption of the Ramadan. This year, I mean, we projected a lower sales for Q4 this year just to anticipate that there will be disruptions or there will be a lower output because of Ramadan. Also, if you remember, when we did the projection for Q4 2026, the war just started between Iran and the US. We were concerned and were rather conservative in our ability to ship out because there could be port closing and all kinds of uncertainties. Yeah. Fortunately, we were able to have a very high, well, actually, this is a record high Q4 for us in Q4, and we were able to have a rather normal gross margin.

Speaker #8: how to handle the disruption of, of the, Ramadan. So this year, I mean, we projected a lower sales for Q4 this year. Just to anticipate that there will be disruptions, or there will be, a lower output from because of the because of Ramadan and also if you remember when we did the projection for Q4 of '26, the war just started.

Speaker #8: In between Iran and the US, we were kind of concerned and were rather conservative in our ability to ship out because there could be port closings and all kinds of uncertainties.

Speaker #8: So yeah, fortunately, we were able to have a very high—well, actually, this is a record high fourth quarter for us in Q4.

Speaker #8: And we were able to have a rather normal gross margin.

Speaker #10: Got it. Thank you.

Michael Baker: Got it. Thank you.

Speaker #8: You're welcome.

Gilbert Lee: You're welcome.

Speaker #2: Once again, if you would like to ask a question, please press star one. We have reached the end of the question-and-answer session, and I will now turn the call over to Sam Choi for closing remarks.

Operator: Once again, if you would like to ask a question, please press star one. We have reached the end of the question and answer session, and I will now turn the call over to Sam Choi for closing remarks.

Speaker #11: Thank you, operator. And thanks to all of you for joining us today. We appreciate your ongoing support and interest in Jerash, and we look forward to updating you on our progress in the year ahead and in the near future.

Sam Choi: Thank you, operator, and thanks to all of you for joining us today. We appreciate your ongoing support and interest in Jerash, and we look forward to updating you on the progress in the near future. Thank you very much.

Speaker #11: Thank you very much. Thank you.

Gilbert Lee: Thank you.

Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker #2: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker #8: Thank you.

Gilbert Lee: Thank you.

Speaker #11: Thank you very much.

Sam Choi: Thank you very much.

Michael Baker: Bye.

Q4 2026 Jerash Holdings (US) Inc Earnings Call

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