Jerash Holdings (US), Inc. (JRSH)
Jerash Holdings (Nasdaq: JRSH) designs and manufactures sportswear and outerwear from its Jordan-based facilities, supplying major brands like The North Face, Vans, New Balance, and Skechers. In FY 2025, revenue rose 24% to $145.8 million driven by volume gains, lifting gross margin to 15% (from ...
Deep Dive: Jerash Holdings (US), Inc. 2025 Form 10-K Review
In its annual report for the fiscal year ended March 31, 2025, Jerash Holdings (US), Inc. (Nasdaq: JRSH) demonstrated robust top-line growth, operational resilience in a challenging global environment, and prudent capital management—yet released a modest net loss. Here’s what you need to know before deciding whether to invest.
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Business Overview
Jerash Holdings is a U.S.-listed parent company for a group of subsidiaries principally engaged in manufacturing and exporting customized sportswear and outerwear from knitted fabrics produced in Jordan. Jerash’s key attributes:
• Manufacturing footprint: Six factories and four warehouses in Jordan plus sales/marketing offices in Hong Kong and China. Capacity: ~24 million garment pieces annually. • Major brands supplied: VF Corporation (The North Face, Timberland, Vans), New Balance, G-III (Calvin Klein, Tommy Hilfiger, DKNY, Guess), Hugo Boss, American Eagle, Skechers. • Customer concentration: VF Corp. accounted for ~65% of revenue in FY 2025 (>> than 67% in FY 2024). Top two customers (VF + New Balance) = ~77% of sales. • Strategic joint ventures: J&B International (JV with PT Eratex, 51/49 split) for garment trading; Jerash Newtech (JV with Newtech Textile, 51/49) planned to supply advanced printed fiber & fabric.
2025 Financial Highlights
| Metric | FY 2025 | FY 2024 | Change | % Change |
|---|---|---|---|---|
| Revenue | $145.8 million | $117.2 million | +$28.6 M | +24% |
| Gross Profit | $22.3 million | $16.9 million | +$5.4 M | +32% |
| Gross Margin | 15% | 14% | +1 pp | |
| SG&A | $20.9 million | $17.6 million | +$3.3 M | +19% |
| Other (Income) Net | $(1.30 M) | $(0.70 M) | – | – |
| Operating Profit | $1.45 million | $(0.66 M) | +$2.11 M | |
| Net Loss | $(0.84 M) | $(2.04 M) | – | –59% |
| EPS (diluted) | $(0.07) | $(0.16) | – | –56% |
Key Drivers
- Revenue growth: Fueled by volume increases from VF Corp. and New Balance orders.
- Margin expansion: Economies of scale and improved supply-chain planning boosted gross margin by 1 percentage point.
- Logistics costs: A shakeup in Red Sea shipping routes drove some air-freight premiums early in the year.
Cash Flow & Balance Sheet Strength
- Cash & restricted cash: $15.06 million at March 31, 2025, up from $14.04 million a year earlier.
- Working capital: $34.6 million (current ratio ~2.7×).
- Operating cash flow: $1.37 million generated (FY 2024: +$2.48 M).
- CapEx: $2.37 M invested in new dormitory facilities (FY 2024: $5.14 M in factory expansions and housing).
- Supply-chain financing: $4.5 M drawn at SOFR + spread; boosts liquidity without dilutive equity or heavy banking fees.
- Zero sustained debt: Other than supply-chain facility and payables, no long-term borrowings.
Dividend Policy
Jerash continues to reward stockholders with a $0.05 per share quarterly cash dividend. For FY 2025, four dividends of $0.05 were declared and paid ($2.45 M total).
Competitive & Geopolitical Risks
- Customer concentration: VF Corp. accounts for ~65% of sales—losing or scaling back any large order would hit revenue hard.
- Regional instability: Factories located in Jordan; subject to Middle East geopolitical events, threats to Red Sea shipping, potential adverse impact from Israel-Hamas & Israel-Iran tensions.
- Tariffs: U.S. reciprocal tariffs of up to 20% on Jordan as of April 2025 (10% baseline already in place) raise cost pressure vs. Asian producers.
- Labor & regulation: Must comply with Jordanian labor laws and customers’ ethical sourcing standards.
- Exchange rates: JOD & HKD pegged to USD—volatile shifts could erode margins if local costs rise.
Growth Initiatives & Outlook
- Expanded dormitory capacity: Completed new 195,000 sqft housing for a multi-national workforce, ensuring labor stability.
- New facility plans: On track to build 133,000 sqft factory (capacity boost) + housing on adjacent land—timing tied to order momentum.
- Joint ventures: J&B trading venture to diversify client base; Jerash Newtech JV to supply Cooltrans printed fabric to existing customers.
Investment Case
Upside
- Double-digit top-line growth, improving gross margins.
- Prudent cap-ex, self-funded housing and expansion.
- Cash-flow positive trajectory, low debt.
- Attractively yields via $0.20 per share annual dividend (4% yield on $5 stock).
Downside
- Heavy reliance on one anchor customer (65% of sales).
- U.S. tariff headwinds making Jordan less price-competitive.
- Geopolitical risk around Jordan/Red Sea trade lanes.
- Single manufacturing footprint.
Bottom Line: Jerash has proven it can grow revenue, expand margins, and maintain liquidity in a capital-intensive sourcing business. Yet customer concentration, tariff shifts, and regional uncertainties underpin modest profitability and risk.
Net Loss in FY 2025:
Jerash Holdings reported a net loss of $0.84 million (EPS: $0.07 loss) for the fiscal year ended March 31, 2025.