New York, June 16, 2026, 13:07 (EDT)
- Gildan’s U.S. shares dropped over 20% at one point. The stock lagged the TSX Composite, which was up.
- Shares dropped after a short-seller said the company inflated revenue and has too much inventory in the channel.
- The focus now shifts to Gildan’s second-quarter results. Investors will look for updates on channel inventory, margins, and savings from the HanesBrands integration.
Gildan Activewear Inc. shares sank Tuesday after Jehoshaphat Research revealed a short position and accused the clothing maker of inflating revenue with channel stuffing. Short sellers bet on a stock’s decline, and channel stuffing means sending more goods to distributors or customers than end demand supports. Gildan’s shares on the NYSE were last down 21.7% at $48.50, dropping as low as $46.56 in heavy trading. MarketScreener data showed the stock on the TSX off about 20% to CA$68.96. MarketScreener
S&P/TSX Composite edged up, closing in on a record, as risk appetite picked up, according to a Reuters piece on MarketScreener. Gildan shares dropped after Jehoshaphat said it was short the name. The report raises questions around the quality of Gildan’s sales, not just short-term sentiment. When revenue numbers face doubt, investors tend to mark down the earnings multiple and look for stronger proof of cash flow. MarketScreener
Short sellers alleged Gildan’s organic growth is softer than reported and that distributors could be holding about $510 million in extra inventory, according to summaries from The Fly via TipRanks and by Investing.com. The claims aren’t proven in the reports cited. But they hit on a key issue: Gildan’s own Q1 results said wholesale sales dropped 11.9% from a year ago and blamed temporary sell-in weakness on inventory reduction efforts at customers. Sell-in counts what’s shipped to distributors or retailers, not to final buyers. TipRanks Investing.com South Africa GlobeNewswire
Bulls can still point to Gildan’s 2026 outlook. The company kept its revenue view at $6.0 billion to $6.2 billion, with adjusted diluted EPS seen at $4.20 to $4.40 and free cash flow above $850 million. Adjusted EPS strips out some items; free cash flow is after capex. CEO Glenn J. Chamandy in April said Gildan is focusing on “driving operational excellence, advancing our integration of HanesBrands, maintaining cost discipline and consistent execution.” TipRanks said in the past day that TD Cowen’s Brian Morrison left a Buy rating and $80 target in place, looking to HanesBrands integration and possible long-term growth in EPS. GlobeNewswire TipRanks
The short report raises the risk that investors could doubt Gildan’s full-year 2026 targets. Gildan burned about $310 million in free cash flow during the first quarter. Net debt finished the period at $4.87 billion, pushing leverage to 3.3 times net debt to pro forma adjusted EBITDA—a level lenders and equity holders track. The higher debt load squeezes flexibility, so investors will focus even more on management’s cash-flow guidance. GlobeNewswire
Gildan’s next big test comes with its Q2 report. Most earnings calendars list July 30. The company is pointing to about $1.6 billion in Q2 net sales and still says lower channel inventory will drag on sell-in. Shares are at $48.50, near 11 times Gildan’s own 2026 adjusted EPS target—cheap if management’s outlook holds up. But after the latest allegations and the steep selloff on Tuesday, the stock looks risky. Investors will want better data on channel inventory, cash flow and any HanesBrands synergies before betting. Public GlobeNewswire
