Executive Summary

Q1 FY26 revenue was $39.63M and diluted EPS was $0.03; revenue beat consensus ($38.85M*) while EPS missed ($0.075*), reflecting stronger logistics-driven gross margin but higher tax and interest drag .
Gross margin expanded 410 bps YoY to 15.4% on improved logistics and production planning after resuming raw material routing through Aqaba; operating income swung to $0.96M from a loss in the prior year .
Management guided Q2 FY26 revenue to $40–42M and gross margin to 15–16% (midpoint roughly in line with Street revenue at $41.0M*), underpinned by capacity ramp and a major Hansoll order beginning shipments in September .
Facilities are fully booked through February 2026; capacity expansion completed in June is ramping and expected to lift output ~15% starting Q2 FY26, with an additional ~5% from Al-Hasa targeted in early CY26 .

Values with * are from S&P Global consensus.

What Went Well and What Went Wrong

What Went Well
- Margin inflection: “Gross margin increased to 15.4%… from 11.3%,” driven by “improved logistics and production planning” and resumption of sea routes via Aqaba with lower transport costs .
- Demand and order visibility: “Our facilities are fully booked through February 2026,” and “we have successfully completed production of the first phase of a major initial order” via Hansoll; shipments slated from September to February 2026 .
- Operating leverage: Operating income rose to $0.96M from a loss, aided by “reduced import logistics costs… lower overtime… lower stock-based compensation… reduced spending on repair and maintenance” .
What Went Wrong
- Slight revenue decline YoY (-3.2%): Q1 FY26 revenue $39.6M vs $40.9M prior year due to shipment redirection from Haifa to Aqaba late in June that delayed several orders .
- EPS below consensus: $0.03 vs $0.075* amid $0.33M income tax expense and $0.31M net other expense; tax rate remains an optimization focus .
- Cash use from working capital: Cash and restricted cash declined to $7.5M at quarter-end as receivables spiked from late-June shipping reroutes; collections occurred in July .

Values with * are from S&P Global consensus.

Financial Results

Metric	Q1 FY2025 (Jun-24)	Q4 FY2025 (Mar-25)	Q1 FY2026 (Jun-25)
Revenue ($)	$40,935,716	$29,251,426	$39,629,308
Gross Profit ($)	$4,639,871	$5,238,901	$6,088,880
Gross Margin (%)	11.3%	17.9%	15.4%
Total Operating Expenses ($)	$5,468,679	$4,805,386	$5,129,884
Operating Income ($)	$(828,808)	$433,515	$958,996
Total Other Expense, net ($)	$(426,168)	$(253,802)	$(306,534)
Income Tax Expense ($)	$111,721	$323,808	$328,832
Net Income ($)	$(1,366,697)	$(144,095)	$323,630
Diluted EPS ($)	$(0.11)	$(0.01)	$0.03

Notes: Q1 FY2026 gross margin improvement primarily reflects logistics normalization and planning efficiency . Slight YoY revenue decline was tied to late-June shipping redirects to Aqaba due to Haifa disruptions .

Segment breakdown: N/A (company reports as a single segment; no segment disclosure in filings) .

KPIs and operating updates:

Facilities fully booked through February 2026 .
Capacity expansion (+~15%) completed June 2025; ramp begins Q2 FY26 .
Al-Hasa expansion (+~5%) targeted for early CY2026 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($)	Q2 FY2026	N/A	~$40–$42M	New
Gross Margin (%)	Q2 FY2026	N/A	~15–16%	New
Regular Dividend ($/share)	Q1 FY2026	$0.05 (declared 5/20/25)	$0.05 (declared 8/8/25)	Maintained
Production Capacity	FY2026	+15% starting Q2 FY26 (from completed expansion)	+15% starting Q2 FY26 (ramp underway)	Maintained
Production Capacity	Early CY2026	N/A	+~5% (Al-Hasa extension)	New/Updated timing

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3 FY2025; Q-1: Q4 FY2025)	Current Period (Q1 FY2026)	Trend
Supply chain/logistics	Haifa congestion delayed ~$6M shipments; Red Sea costs elevated; improvement by late Jan	Logistics normalized via Aqaba; Haifa resumed; shorter lead times; costs lower	Improving
Tariffs/macro	Rising US tariff regime accelerated brands’ urgency to diversify to Jordan; Jordan competitive vs Asia	CFO confirms 15% tariff on Jordan; still favorable vs Bangladesh/India/Vietnam; aim to negotiate down to ~10%	Competitive advantage strengthening
Capacity expansion	+15% internal by June; +5–10% Al-Hasa under review; longer-term greenfield studied	+15% completed; onboarding workers; facilities booked through Feb 2026; +~5% Al-Hasa early CY26	Ramping near-term; long-term cautious
Customer diversification/FOB mix	Shift to higher-ASP FOB; JV Busana underperformed; Hansoll collaboration emerging	Hansoll initial order produced; shipments Sep–Feb; ongoing collaborations; more Europe sales (e.g., Timberland EU, Hugo Boss)	Expanding
Tax structure	High effective tax rate in FY25; plan to optimize with international experts	Consulting on global tax planning to optimize structure	Work in progress
Working capital/cash	FY25: cash $15.1M; net WC $34.6M	Q1 end cash down on receivable timing; collections in July	Temporary timing effect

Management Commentary

Strategy and demand: “Companies continue to seek alternative manufacturing partners and diversify away from China and Southeast Asia… Another key factor… was the return to routing import raw material shipments through Aqaba Port… shorter lead times and lower transportation costs” .
Order visibility and collaboration: “Successfully completed production of the first phase of a major initial order… with Hansoll Textile… Shipments are scheduled to begin in September and continue through February 2026” .
Capacity ramp: “Expansion… completed in June 2025… onboarding additional workers to support an approximate 15 percent increase… expected to begin contributing… starting in the second fiscal quarter” .
Tariff positioning: “Even with the… 15% U.S. Tariff on products from Jordan, exporting from Jordan remains significantly more advantageous… than… Asia” .

Q&A Highlights

Tariffs: CFO confirmed a 15% tariff on Jordan today; still advantageous vs peers; government negotiating to lower toward ~10% .
Shipment timing: Some Q1 orders slipped to July; “not significant” in size .
Expansion cadence: +15% Amman capacity feathers in over several months; Al-Hasa unlikely online before FY26 year-end .
Hansoll scale: Two orders secured; trial ~150k pieces and a larger ~3.2M-piece order, with Hansoll teams on-site; optimism on 2026 expansion with Hansoll .
Tax planning: Pursuing international tax structuring and transfer pricing optimization to reduce effective rate over time .

Estimates Context

Results vs S&P Global consensus (Q1 FY2026):

Metric	Actual	Consensus	Surprise
Revenue ($)	$39.63M	$38.85M*	Beat*
Diluted EPS ($)	$0.03	$0.075*	Miss*
EBITDA ($)	$1.70M*	$2.50M*	Miss*

Next quarter (Q2 FY2026) guidance vs Street:

Revenue: Company $40–$42M vs consensus $41.0M* → In line at midpoint*.
Gross margin: Company ~15–16% ; Street margin consensus not available.
EPS: No company EPS guidance; Street $0.095*.

Values with * are from S&P Global.

Key Takeaways for Investors

Revenue beat but EPS miss: Gross margin tailwinds from Aqaba normalization offset by tax/other expense; watch tax optimization progress and interest costs .
High visibility: Fully booked through February 2026 supports sustained utilization into capacity ramp; near-term revenue guide aligns with Street .
Structural advantage: Even at 15% tariff, Jordan remains competitively advantaged vs Asian peers; potential tariff relief would be incremental upside .
Mix shift to FOB and large collaborations (Hansoll) should support ASP and margin, particularly as 15% capacity ramps through Q2 .
Working capital timing affected quarter-end cash; receivables collected in July—monitor cash conversion as volume scales .
Medium-term: Longer-term greenfield build likely deferred until macro/geopolitics/tariff clarity improves; balance growth appetite with financing prudence .

Appendix: Additional Relevant Releases

Dividend declaration: Regular $0.05 per share payable Aug 29, 2025 (record Aug 22) .
Prior quarter prints for trend:
- Q4 FY2025: Revenue $29.3M; GM 17.9%; operating income $0.43M; net loss $(0.14)M .
- Q3 FY2025: Revenue $35.4M; GM 15.2%; operating income $0.71M; net income ~$0.006M .

Sources: Q1 FY26 8-K press release and exhibits ; Q1 FY26 earnings call transcript ; Q4 FY25 8-K press release and transcript ; Q3 FY25 8-K press release and transcript . Values marked with * are retrieved from S&P Global.

Jerash Holdings (US), Inc. (JRSH)·Q1 2026 Earnings Summary