Jerash (US) (JRSH) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 FY2025 reached a record $40.9 million, up 18% year-over-year, driven by strong export orders to the U.S. and Europe and new customer growth.

• Gross margin declined to 11.3% from 16.0% year-over-year, pressured by Red Sea shipping disruptions and higher logistics costs, but improved sequentially.

• Net loss was $1.4 million ($0.11 per share), compared to net income of $495,000 ($0.04 per share) last year, mainly due to increased logistics and production costs.

• Manufacturing facilities are operating at full capacity, with orders booked through December 2024 and a diversified, expanding customer base.

• Contingency plans are in place to address potential regional instability, ensuring minimal operational disruption.

Financial highlights

• Q1 FY2025 revenue rose 18% to $40.9 million from $34.7 million year-over-year.

• Gross profit was $4.6 million, down from $5.6 million in the prior year; gross margin declined to 11.3% from 16.0%.

• Operating expenses increased to $5.5 million from $4.5 million, with SG&A up 18%.

• Net loss was $1.4 million versus net income of $495,000 last year.

• Cash and restricted cash stood at $13 million, with net working capital of $34.5 million as of June 30, 2024.

Outlook and guidance

• Q2 FY2025 revenue expected to increase 11%-13% year-over-year; full-year revenue guidance raised to 20%-25% growth.

• Gross margin for FY2025 projected at 12%-14%, subject to logistics and product mix.

• Second half of FY2025 anticipated to match or exceed first half performance due to strong order inflows from new customers.

• Management expects cash on hand and operating cash flow to support working capital needs for the next 12 months.

• Capital expenditures projected at $4.1 million for fiscal 2025 and $8.8 million for fiscal 2026 to enhance production capacity.