In This Article:
Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Revenue for the first quarter of fiscal 2025 increased nearly 18% over last year's first quarter, reaching an all-time high.
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Jerash Holdings (US) Inc (NASDAQ:JRSH) has continued to receive an increasing number of purchase orders for export shipments to global customers in the US and Europe.
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The company is diversifying its customer base, which is paying off with additional trial orders from major brands.
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Manufacturing facilities are operating at full capacity with orders fully booked well into December 2024.
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Jerash Holdings (US) Inc (NASDAQ:JRSH) expects revenue for the second quarter to increase by 11 to 13% from the prior year quarter and full year 2025 revenue to grow by 20 to 25%.
Negative Points
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Gross margin decreased to 11.3% from 16.0% in the same period last year due to higher raw material import costs and additional manufacturing costs.
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Operating loss totaled $829,000 in the fiscal 2025 first quarter versus operating income of $1.1 million in the same period last year.
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Net loss was $1.4 million or 11 cents per share in the fiscal 2025 first quarter compared with net income of $495,000 or 4 cents per share in the same period last year.
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Supply chain disruptions affected the ability to receive adequate supply of materials, leading to delayed production and increased costs.
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Interest expenses increased due to the supply chain financing program, reflecting higher costs associated with maintaining cash flow.
Q & A Highlights
Q: Can you explain the increase in revenue guidance from 15-18% to 20-25% for the full year? A: The revenue increase is expected to be more significant in the second half of the fiscal year. The first quarter already achieved a record, and the second quarter is strong. We anticipate the third and fourth quarters to be on par with the first half due to strong orders, especially from new customers who are now placing regular orders after trial orders in the past couple of years. (Respondent: CFO)
Q: Are the increased orders primarily from existing customers catching up or new customers? A: It's more from new customers. We have been receiving trial orders over the past couple of years, and these customers are now starting to place regular orders. The first half of the year is more about catching up on delayed orders. (Respondent: CFO)
Q: The gross margin was lower than expected. Do you have control over the supply chain issues now, and what are the expectations for Q2 and the full year? A: We are still facing higher manufacturing costs due to labor and inbound freight costs. We expect stabilization after August and are implementing cost-cutting measures. The second half of the year should see improvement, although not reaching high teens in gross margin. (Respondent: CFO)