Gildan Activewear

Gildan Activewear makes basic clothing such as T-shirts, fleece, underwear, socks and intimates. It owns most of its factories, from yarn spinning to sewing, mainly in Central America, the Caribbean and Bangladesh, and this gives it low costs. Its brands include Gildan, Comfort Colors, American Apparel, Hanes, Bali, Maidenform, Playtex and GOLDTOE. Gildan bought HanesBrands on December 1, 2025, with cash, new shares and new debt.

It reports two kinds of sales. Wholesale sales go to distributors, screenprinters and global lifestyle brands, and these customers print logos and designs on blank clothing. Retail sales go to mass merchants, department stores, online retailers and consumers, mostly the Hanes brands. In Q2 2026, Wholesale was $769 million and Retail was $813 million of net sales.

The market doubts that Gildan's sales are as strong as they look. On June 16, 2026, the short seller Jehoshaphat Research alleged that Gildan sold too much stock into its distributors to make revenue grow, and that it moved almost half of its receivables off the balance sheet. The stock fell 18.8% that day. Gildan said its disclosure is accurate and kept its guidance.

Two more facts add to the doubt. Net sales in the first half of 2026 were lower than the pro forma sales of Gildan and HanesBrands a year earlier, because Gildan cut inventory at its customers during the integration. Debt is also high after the HanesBrands purchase, at 3.2 times pro forma adjusted EBITDA on June 28, 2026, so buybacks are paused. For the gap to close, three things must be true.

Q3 2026 net sales must be near the guidance of about $1.65 billion, with Wholesale and Retail both growing against pro forma sales, as management said; this is a direct test of the channel stuffing claim. Full-year 2026 revenue must be at least at the low end of $6.0 billion to $6.2 billion, with about $1.0 billion of free cash flow. The HanesBrands Australia sale must close in the second half of 2026, and the cash must reduce debt so that the leverage ratio moves toward the 1.5 to 2.5 times target. The Q3 2026 report, expected at the end of October 2026, gives the first evidence, and the full-year 2026 report in about February 2027 gives the second.

If sales hold, the gap can close over the next two to four quarters. If sales fall in the second half, as the short seller predicted, the doubt about the sales quality can stay for longer.

1. Oct 30, 2026 · est.Pending

   Q3 2026 results: sales against pro forma and the short seller's claimNet sales near $1.65 billion with Wholesale and Retail both growing against pro forma sales pass; sales well below guidance or another fall against pro forma fails.
2. Dec 2026 · est.Pending

   HanesBrands Australia sale closes and debt fallsClosing in the second half of 2026 with the cash used to repay term loans passes; a delay into 2027 or a lower price fails.
3. Feb 2027 · est.Pending

   Full-year 2026 results and 2027 outlookRevenue of at least $6.0 billion, free cash flow near $1.0 billion and leverage that moves toward 2.5 times pass; missed guidance or higher leverage fails.

Every passed and failed checkpoint across all picks

Gildan funds itself with unsecured notes, bank term loans, a revolving credit facility and, since May 15, 2026, a US commercial paper program of up to $1.6 billion. The debt went up when Gildan bought HanesBrands on December 1, 2025. Read more

• A short seller alleged in June 2026 that Gildan pushed too much stock into its distribution channel and that it sells almost half of its receivables to move them off the balance sheet. Gildan rejects the claims. If second-half 2026 sales fall short, the market can believe the claims, and law firms look for shareholders for possible securities claims.
• Retail customers buy carefully. In Q2 2026, Retail sales were lower than pro forma sales a year earlier, because of weak markets at the end of the quarter and smaller seasonal orders from some large retailers. HanesBrands' Retail business now gives about half of net sales, so a weak US consumer has a larger effect than before.
• Debt is high after the HanesBrands purchase. Net debt was $4.69 billion on June 28, 2026, 3.2 times pro forma adjusted EBITDA, against a target of 1.5 to 2.5 times. Buybacks stay paused until leverage is near the middle of the target. The plan to reduce debt depends on the HanesBrands Australia sale and on about $1.0 billion of free cash flow in 2026.
• The HanesBrands integration must give about $250 million of yearly cost savings over three years. Gildan closes and moves factories and distribution centers, and this can cause supply problems or one-time costs.
• Most of Gildan's factories are outside the US, in Central America, the Caribbean and Bangladesh. US tariff policy changed many times in 2025 and 2026. A new tariff on these countries, or a change to the CAFTA-DR treatment, can raise costs again.

• October 8, 2026The US Federal Trade Commission closed its investigation into Gildan and the distributor S&S under the Robinson-Patman Act. The investigation was about a contract clause that stopped Gildan from giving S&S's competitors the same prices and discounts. Gildan and S&S changed the clause. Gildan paid no penalty, made no settlement and admitted no wrongdoing.
• July 30, 2026Gildan agreed to sell HanesBrands Australia to BBFIT Investments, an entity of BB Retail Capital, for an enterprise value of about A$700 million (about $490 million). It expects the sale to close in the second half of 2026, after regulatory approvals, and it will use the cash to reduce debt.
• July 30, 2026Gildan reported Q2 2026 results. Net sales were $1.58 billion, up 72.3% because of HanesBrands, but lower than the pro forma $1.72 billion of a year earlier. Adjusted diluted EPS was $1.28, up 32.0%. Free cash flow was $326 million. Gildan raised its 2026 adjusted EPS guidance to $4.65 to $4.75 from $4.20 to $4.40, but it now expects revenue at the low end of $6.0 billion to $6.2 billion.