Gildan Faces Revenue Probe
Siskinds LLP Investigates Gildan Activewear Over Allegations of Inflated Revenues
Anonymous
Canadian law firm Siskinds LLP has launched a formal investigation into Gildan Activewear Inc. (TSX: GIL) following a short-seller report that sent the stock plunging nearly 19% in a single day, according to National Post. The report, published June 16, 2026 by Jehoshaphat Research, alleges Gildan inflated its revenues through "channel stuffing" — a practice where a company ships more product to distributors than customers actually want, booking the sales early to make numbers look better.
The one-day sell-off erased roughly $3 billion in market value, according to Ottawa Citizen. Siskinds is now seeking investors and former employees who may have witnessed the alleged misconduct. Joining the probe are several U.S. firms, including Levi & Korsinsky and Block & Leviton, all investigating potential securities fraud.
Short-Seller Report Triggers an 18% Stock Collapse
Jehoshaphat Research dropped its report on June 16, 2026, accusing Gildan of being "addicted to a growth narrative." The firm claims Gildan pushed excess inventory onto distributors using extended payment terms of 90 to 120 days. It also alleges a "Locker Program" — essentially a consignment deal — that let distributors hold stock without paying upfront, masking weak real demand.
The numbers in the report are stark. Alleged excess inventory at the distributor level sits at $510 million. Days Sales Outstanding — how long it takes to collect payment — reportedly hit 129 days company-wide and a staggering 195 days at Gildan's largest distributor, S&S Activewear. Gildan fired back on June 16, reaffirming its full-year revenue guidance of $6.0 billion to $6.2 billion and saying it was "confident" its disclosures were "accurate and comprehensive."
Gildan's Rocky Road Back to Record Sales
Gildan's recent history has been turbulent. In December 2023, the board abruptly fired co-founder and CEO Glenn Chamandy. Activist investor Browning West then led a "historic" proxy battle, and by May 2024 the entire board had resigned and Chamandy was back in charge. Just over a year later, Gildan closed a $2.2 billion deal to buy HanesBrands in December 2025, nearly doubling its size.
Gildan reported what it called "record" Q1 2026 net sales of $1.17 billion — up 64% year-over-year — in April 2026. But the surge came largely from the HanesBrands acquisition. Critics say that integration also spiked Gildan's debt to 3.3 times net debt to EBITDA, well above its target range of 1.5 to 2.5 times. The governance picture got cloudier too: three senior executives resigned from the Ethics and Fraud Compliance Committee shortly after the 2024 board overhaul.
Analysts Split: Fraud Red Flag or Buying Opportunity?
Not everyone is panicking. TD Securities kept its "Buy" rating after the sell-off. UBS analyst Jay Sole called the stock drop a "favorable buying opportunity," arguing Gildan is unlikely to miss its 2026 revenue targets. Morningstar analyst David Swartz said the company's goal of $100 million in cost benefits for 2026 is achievable and that shares look "undervalued" at current levels.
Bears paint a darker picture. Jehoshaphat Research frames Gildan as a heavily leveraged company using accounting moves — including off-balance sheet factoring — to hide weak organic growth. If a class action is certified, the legal tab could run into the hundreds of millions. This is not the first time Gildan has faced this kind of scrutiny: in 2011, Siskinds helped secure a $22.5 million settlement against the company over similar allegations of misleading financial statements, according to Seaforth Huron Expositor.
What Investors and Witnesses Can Do Right Now
Siskinds LLP is a top-ranked Canadian firm with a team of 25 lawyers focused on securities class actions, according to Mitchell Advocate. The firm is specifically calling on former Gildan employees and current investors to come forward. There is no cost and no obligation to contact the firm during the investigation stage.
Investors who held Gildan shares before the June 16 drop may have a claim if the courts find the company misled the public. The investigation is still in early stages. No class action has been filed yet. Anyone with inside knowledge of Gildan's sales practices — especially related to inventory arrangements or distributor payment terms — is being urged to reach out to Siskinds directly, according to Fairview Post.
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