Jerash Holdings (US), Inc. (JRSH): 5 FORCES Analysis [Nov-2025 Updated]

You're looking to cut through the noise and see exactly where the company stands competitively as of late 2025, so let's get straight to it. Despite facing intense global rivalry and high customer bargaining power from giants like VF Corp and New Balance, the company posted a record fiscal 2025 revenue of $145.8 million and pushed its gross margin to 15.3%, showing its specialized outerwear capacity of over 20 million pieces annually is valued. Still, the real story lies in how Jordan's Free Trade Agreement status acts as a massive moat against substitutes and new entrants, even as supplier costs remain volatile. Honestly, understanding this balance between customer leverage and trade advantage is key to valuing the business right now; check out the full Five Forces breakdown below to see the near-term risks and opportunities mapped out.

Jerash Holdings (US), Inc. (JRSH) - Porter's Five Forces: Bargaining power of suppliers

You're looking at the suppliers for Jerash Holdings (US), Inc. (JRSH), and honestly, it's a mixed bag of pressures and mitigations right now, late in 2025. The cost side of things has definitely been a headwind.

Supply chain financing is being used, which suggests that Jerash Holdings (US), Inc. has needed to manage working capital tightly, especially when sales ramp up. For instance, in the fourth quarter of fiscal year 2025, the company noted increased operating expenses and higher interest expenses directly tied to these supply chain financing programs and short-term debt needed to support higher sales volumes. You saw this play out in the balance sheet as of June 30, 2025, where Total Cash was $7,502,000, down significantly from $15,064,000 on March 31, 2025, largely because a substantially higher Accounts Receivable balance-caused by logistics interruptions-tied up cash, though those receivables were all collected in July.

Raw material costs have been volatile, which is a classic supplier power indicator. Logistics disruptions in fiscal year 2024 and fiscal year 2025, stemming from port closures and congestion in the region, directly triggered higher material costs and delays in production delivery. That situation has thankfully normalized as of August 2025, which should ease some of that raw material cost pressure going into 2026. Still, the impact was felt; for example, the Q2 fiscal year 2026 gross profit margin decreased to 15.0% from 17.5% the prior year, partly due to rising production costs.

To counter this, Jerash Holdings (US), Inc. is making moves to bring more of the process in-house. The company is vertically integrating in key areas, which inherently reduces reliance on external suppliers for those specific components. A major step here is the joint venture with Newtech Textile (HK) Limited to build a fabric facility in Jordan using waterless coloration technology. This project, with an estimated capital expenditure of approximately $30 million, gives Jerash Holdings (US), Inc. a 51% interest in this new vertical offering.

Here's a quick look at how some key operational metrics related to demand and costs stacked up around the end of the fiscal year 2025 reporting period:

When you look at the broader supplier landscape, the power dynamic depends on what you're buying. Global textile suppliers, in general, are fragmented, meaning there are many options for basic goods, which keeps the power of the average supplier somewhat in check. However, specialized fabric or yarn suppliers may hold more leverage, especially given the high demand Jerash Holdings (US), Inc. is currently seeing-factories are fully booked through the end of December 2025. This high utilization means Jerash Holdings (US), Inc. needs its key specialized inputs more than ever.

The vertical integration and strong customer demand are the main levers Jerash Holdings (US), Inc. has to push back against supplier power. You can see the effect of this strong demand in their operational status:

• Secured a major order of over 3 million pairs of shorts via Hansoll Textile.
• Factories are operating at full capacity through the end of December 2025.
• Production capacity expansion of approximately 15% completed.
• Jordan's tariff advantage (current effective rate of 15% to the U.S.) is favorable compared to other sourcing countries (20% to over 60%).

The move to FOB (free-on-board) delivery on the new major order also helps Jerash Holdings (US), Inc. attain standard margins compared to traditional contract manufacturing, shifting some logistical risk and control away from third parties. Finance: draft 13-week cash view by Friday.

Jerash Holdings (US), Inc. (JRSH) - Porter's Five Forces: Bargaining power of customers

You're looking at the power your major buyers hold over Jerash Holdings (US), Inc., and honestly, it's a classic case of a few large entities having significant sway. The bargaining power of customers for Jerash Holdings (US), Inc. is inherently high because the company manufactures for some of the biggest names in global apparel and sportswear.

The customer base is anchored by these giants, which means their order volumes dictate a substantial portion of Jerash Holdings (US), Inc.'s production schedule and pricing leverage. For instance, we know from recent reports that Jerash Holdings (US), Inc. serves:

• VF Corp (owner of The North Face, Timberland, Vans)
• New Balance
• G-III (licensing Calvin Klein, Tommy Hilfiger)
• American Eagle

Customer concentration is definitely a risk you need to watch. While Jerash Holdings (US), Inc. is actively working to diversify, the reliance on a few top-tier buyers remains a near-term vulnerability. For example, looking at the most recent data available, which covers the second quarter of fiscal year 2026, we see that VF Corporation accounted for 60% of sales, and New Balance accounted for 12% of sales. That concentration means any shift in purchasing strategy from VF Corp sends immediate ripples through Jerash Holdings (US), Inc.'s financials. Still, the management team has been clear about its strategy to mitigate this, noting they are producing garments for more than 20 brands as of late 2024 and are continuing to expand that mix.

Here's a quick look at what drives customer demand and concentration:

Now, let's talk about what makes it hard for these customers to just walk away. Jordan's Free Trade Agreement (FTA) status with the U.S. creates a significant cost barrier for buyers looking elsewhere. You see, the U.S. tariff rate on imports from Jordan is currently 15% as of late 2025, a rate that was part of a previous agreement dating back to 2001. To put that in perspective, the tariff rate on comparable imports from China was 30% as of November 10, 2025, and other Asian countries faced rates like 50% from India. This tariff advantage effectively raises the switching cost for a major brand like New Balance or G-III if they were to shift significant volume to a non-FTA country, even if they find a slightly lower base manufacturing cost elsewhere. That tariff differential is a powerful anchor for Jerash Holdings (US), Inc.'s existing relationships.

The sheer volume of business flowing to Jerash Holdings (US), Inc. confirms customer reliance. The company achieved a record annual revenue of $145.8 million in fiscal 2025, which is a 24.4 percent increase from the prior year. That growth, driven by increased shipments to U.S. customers, shows that despite their power, these buyers are actively choosing to place more orders, not fewer. Finance: draft a sensitivity analysis on a 500 basis point tariff increase for China vs. Jordan by next Tuesday.

Jerash Holdings (US), Inc. (JRSH) - Porter's Five Forces: Competitive rivalry

You're looking at the competitive rivalry in the apparel manufacturing space, and honestly, it's a tough, price-driven arena. The global apparel manufacturing industry is intensely competitive and price-sensitive. Jerash Holdings (US), Inc. operates in a segment where brands constantly shop for the lowest landed cost, so staying competitive isn't optional; it's the cost of entry.

Jerash's primary defense against this intense rivalry is its geographic positioning. The company's key differentiator is its expertise in complex apparel like high-quality jackets, but the real leverage comes from Jordan's trade status. Jordan offers a low-cost manufacturing environment combined with favorable trade agreements. For instance, apparel exports from Jordan to the United States face a current effective reciprocal tariff of 15%, which is significantly more favorable than the rates from other major sourcing countries that can range from 20% to more than 60%. This tariff advantage is a major factor attracting global brands seeking to diversify supply chains away from Asia.

The financial results for fiscal 2025 reflect this dynamic. While the company achieved record annual revenue of $145.8 million, up 24.4% year-over-year, the gross margin performance showed the pressure. The gross margin for the first six months of fiscal 2025 was 14.4%. However, the fourth quarter of fiscal 2025 saw a strong rebound in margin to 17.9%, driven by higher volume and economies of scale. Management noted that successfully diversifying the customer base and product mix-a necessary move to reduce reliance on a few large buyers-would likely result in a slightly lower average gross margin in the near term. The company's stated gross margin goal for the full fiscal 2025 year was approximately 14-15%.

Competition is regional, primarily from other low-cost, FTA-eligible countries, but the shift in the U.S. tariff environment in 2025 has made Jordan more attractive. Still, customer concentration remains a factor in the competitive dynamic, meaning Jerash Holdings (US), Inc. must continuously manage relationships and capacity to satisfy its largest partners.

Here's a look at the customer concentration, which speaks directly to the bargaining power of buyers, a force intrinsically linked to rivalry:

The company is actively working to mitigate this concentration risk, which is a direct response to the competitive environment. They secured a major initial order through a collaboration with Hansoll Textile, signaling a move toward a more diversified customer base. Furthermore, Jerash Holdings (US), Inc. has been expanding capacity, completing an expansion that added approximately 15% to production capacity, with plans for more. You need this capacity to fend off rivals who might try to undercut you on delivery speed or volume commitments.

The operational stability is key here, too. After regional geopolitical issues caused logistics disruptions, export trade routes returned to a more normalized environment as of August 2025, which positively affects profitability and competitive reliability.

You should track the following competitive levers:

• Jordan's tariff advantage versus Asian competitors.
• Unit cost reduction through production automation goals.
• Success in diversifying customer base away from 60% concentration.
• Capacity expansion of approximately 15% completed.

Jerash Holdings (US), Inc. (JRSH) - Porter's Five Forces: Threat of substitutes

You're assessing the competitive landscape for Jerash Holdings (US), Inc. (JRSH) as global sourcing patterns shift. The threat of substitution-where customers switch to a different product or service that meets the same need-is primarily driven by alternative low-cost manufacturing locations for custom sportswear and outerwear.

The main substitute for Jerash Holdings (US), Inc.'s production in Jordan is manufacturing in other established, low-cost countries, notably Bangladesh and Vietnam. To give you a sense of the cost differential, in 2025, the average hourly garment worker wage in Bangladesh was around $0.75-$0.85 USD, while in Vietnam, it ranged from $1.10-$1.20 USD. This means Bangladesh retains a clear wage advantage, approximately 30-40% lower than Vietnam, which directly impacts the final unit cost for labor-intensive items like outerwear assemblies. Still, Vietnam is a major player, with an estimated export turnover of $44 billion in 2024-2025.

However, Jordan's Free Trade Agreement (FTA) with the U.S. and E.U. acts as a significant structural barrier against many non-FTA countries. For instance, as of late 2025, apparel exports from Jordan to the United States benefit from a current effective tariff rate of 15%, which is substantially more favorable than the tariff ranges of 20% to more than 60% faced by other major sourcing countries. This tariff advantage is a key reason why Jordan is gaining attention as buyers look to diversify away from Asia. Jordan's total exports to EU markets surged by about 14% in the first half of 2025, further underscoring the benefit of these trade pacts.

It is true that customers are actively shifting production out of China, which generally reduces the substitution risk from that specific region for Jerash Holdings (US), Inc.. As US buyers look beyond traditional Asian hubs like China and Bangladesh, emerging markets like Jordan are becoming more viable alternatives due to these preferential trade terms.

The company's specialized capacity is another mitigating factor against quick substitution. While the prompt specifies a specialized capacity of over 20 million pieces annually for outerwear, we can see the growth trajectory: Jerash Holdings (US), Inc.'s total annual capacity as of March 31, 2023, was approximately 14 million pieces. The company completed a facility expansion in June 2025, which is expected to increase production capacity by approximately 15% starting in the second fiscal quarter of 2026. This ongoing investment in scale makes it harder for a competitor to immediately replicate Jerash Holdings (US), Inc.'s specialized output.

Here's a quick look at the comparative tariff environment impacting substitution risk for Jerash Holdings (US), Inc. versus key Asian competitors:

The ability of Jerash Holdings (US), Inc. to maintain production momentum is evident in its recent performance. For the fiscal 2025 full year, revenue reached a record high of $145.8 million. Furthermore, the factories were fully booked through the end of December 2025.

The primary levers that reduce the threat of substitution for Jerash Holdings (US), Inc. are:

• Tariff advantage over major Asian competitors.
• Completed expansion adding 15% to capacity.
• Strong visibility with factories fully booked through December 2025.
• Diversification into new strategic partners like Hansoll Textile.
• FY 2025 record annual revenue of $145.8 million.

To be fair, competitors in low-cost countries can absorb tariff impacts by lowering prices or improving efficiency, but Jordan's FTA provides a structural cost buffer that is hard to overcome quickly. Finance: draft 13-week cash view by Friday.

Jerash Holdings (US), Inc. (JRSH) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers to entry in the apparel manufacturing space where Jerash Holdings (US), Inc. operates, and honestly, the hurdles are substantial. New players don't just need capital; they need years of proven trust with the biggest names in sportswear and outerwear. That relationship moat is deep.

Consider the established customer base Jerash Holdings serves. A new entrant would need to immediately prove they can handle the volume and quality demands of clients like:

• VF Corporation (The North Face, Timberland, Vans)
• New Balance
• G-III (DKNY, Nautica licenses)
• American Eagle
• Skechers
• Acushnet Holdings Corp (FootJoy)

Securing even one of these relationships is a multi-year endeavor, making the initial market access for a newcomer extremely difficult.

The physical infrastructure alone represents a massive capital outlay. Jerash Holdings has built out a significant footprint in Jordan to service these contracts. A competitor looking to match this scale would face immediate, significant investment requirements just to get operational.

Beyond the physical assets, the regulatory and trade environment acts as a powerful deterrent. Jerash Holdings operates through subsidiaries in a special free trade zone in Jordan, which is key. This structure allows for sales into the United States without tariff or quota restrictions. A new entrant would need to replicate this exact, favorable trade status, which is not easily granted or guaranteed; it requires specific governmental agreements and compliance certifications.

Then there's the human capital challenge. You can't just hire factory workers; you need a skilled workforce. Jerash Holdings (US), Inc. currently employs approximately 6,000 employees across its operations. Recruiting, training, and retaining this many specialized personnel in the Jordanian manufacturing sector-especially while navigating the complexities of integrating local and migrant labor-is a major hurdle that takes significant time and local expertise to overcome. It's a barrier built on operational excellence and local knowledge.