Gildan Activewear Shares Fall After Short Seller Charges “Channel Stuffing”

Gildan Activewear, Inc. found itself playing defense once again on Tuesday, June 16 after acknowledging it was aware of a report published by a short seller earlier on the same day that charged the company with “channel stuffing” to falsify growth metrics. 

Jehoshaphat Research published a report alleging, among other things, that Gildan Activewear “has been stuffing the channel to make revenues look like they’re growing” which has been “cannibalizing future demand and inflating the overall growth trajectory of [the] business.”  The report notes that the problem is “obscured by financial engineering” and that the Company “transfers almost half its receivables off-balance sheet.” 

The firm said it came to this conclusion after interviewing former employees and customers and conducting an accounting analysis. 

“This pulling-forward of sales has been cannibalizing future demand and inflating the overall growth trajectory of this business,” Jehoshaphat said in the report, forecasting a potential 20 per cent miss on analysts’ sales estimates for the second half of the year. “This will expose the weaker revenue and earnings profile of the business.” 

Gildan Activewear said it is 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 also reiterated its fiscal 2026 guidance as communicated at the bottom of this article. 

Gildan does not intend to provide any further comments currently. 

On June 16, 2026, Jehoshaphat Research published a report alleging, among other things, that Gildan Activewear “has been stuffing the channel to make revenues look like they’re growing” which has been “cannibalizing future demand and inflating the overall growth trajectory of [the] business.” The report notes that the problem is “obscured by financial engineering” and that the Company “transfers almost half its receivables off-balance sheet.” 

On this news, Gildan’s stock price fell $11.62, or 18.8 percent, to close at $50.35 per share on June 16, 2026. Bloomberg reported that the GIL shares “tumbled the most in more than six years.” 

In a statement, Gildan reiterated its fiscal 2026 guidance and said it “is confident that its current disclosure provides its investors with accurate and comprehensive information.” 

The company said it does not intend to provide any further comments at this time. 

Bloomberg said UBS analysts led by Jay Sole saw the stock decline as a buying opportunity, saying they don’t believe Gildan will miss its 2026 revenue guidance. “We believe the company’s December analyst day will be a positive catalyst, not one where Gildan has to explain a big guidedown,” they reportedly wrote in a note. 

Image courtesy Gildan Activewear, Inc. 

***

See below for additional SGB Media coverage of Gildan Activewear’s 2026 first quarter report.