Gildan “Stuffing” Channels?

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Gildan Activewear, shares of which are trading near the lowest levels of the last 365 days, was recently accused by a professional short selling firm of “pulling-forward” its sales so as “to make revenues look like they’re growing,” with the result that its distributors and “other customers are currently “stuffed” with excessive GIL product to the tune of around $510 million“ as of the first quarter of 2026.

Gildan, which acquired Hanes in 2025, recently reported a first quarter loss of $65.8 million on sales of $1,1659 billion, compared with a profits of $84.7 million on sales of $711.7 million in the first quarter of 2025, shortly before it took over Hanes. Adjusted net earnings from continuing operations were $80.1 million in the quarter compared to $89.8 last year.

Jehoshaphat Research, the short selling firm which publishes extensive reports of its investigations of companies, and seeks to profit by shorting the target company’s stock, stated that Gildan “got addicted to a growth narrative, and like many addicts it has done unsavory things to feed its addiction.” After the report published in mid June, Gildan’s stock fell to a low of $50.35 on June 16 after trading as high as $72.58 as recently as February 13. On June 30 the stock closed at 51.60.

Jehoshaphat Research argued that when, in past years, Gildan’s distributor channels get overloaded with product for long periods of time, “GIL’s investors have gotten smushed,” adding that current levels have “exploded to unprecedented levels after a run up of unprecedented length.”

On June 16, 2026 Gildan stated that it was “aware of a report published by a short seller” but added that it was “confident that its current disclosure provides its investors with accurate and comprehensive information regarding Gildan, including with respect to its financial information and governance practices. The company reiterates its fiscal 2026 guidance as communicated in its April 30, 2026 press release. Gildan does not intend to provide any further comment at this time.”

In its April 30 press release Gildan noted that “our guidance for the full year is maintained as follows:

• Revenue of $6.0 billion to $6.2 billion;

• Full year adjusted operating margin of approximately 20%;

• Capex to come in at approximately 3% of net sales;

• Adjusted diluted EPS in the range of $4.20 to $4.40, an increase of approximately 20% to 25% year over year;

• Free cash flow to be above $850 million.”

Meanwhile, on June 16 a New York securities law firm, Bleichmar Fonti & Auld LLP, notified shareholders in a press release that it was “investigating whether Gildan committed securities fraud relating to allegations that the company engaged in a channel stuffing scheme to artificially inflate revenue,” adding that “the decline in Gildan’s stock price caused significant losses to investors.”

The law firm cited the Jehoshaphat Research publication, stating “this news caused the price of Gildan stock to decline $11.62 per share, or 18.75%, from a closing price of $61.97 per share on June 15, 2026, to $50.35 per share on June 16, 2026.”