Gildan Activewear (GIL) Channel Stuffing and Inflated Sales Case
$GIL investors filed a claim against Gildan Activewear Inc., its CEO, and its current and former CFOs for touting net sales growth and effective internal controls, while failing to disclose that Gildan used channel stuffing to create the appearance of revenue.
After Jehoshaphat Research published a short report alleging that Gildan stuffed its distributors with excess product, Gildan’s stock fell 18.7% on June 16, 2026.
$GIL investors can join this case to be notified about potential recovery.
Case Details:
Gildan is a vertically integrated manufacturer of basic apparel, including activewear, underwear, and hosiery, sold through distributors, screenprinters, and retailers. Its common shares are listed on the NYSE and it is incorporated in Canada. Throughout the Class Period, Gildan reported growing net sales, including from its acquisition of Hanes, and its annual reports described effective internal controls over financial reporting, with SOX certifications signed by its CEO and CFO.
On June 16, 2026, Jehoshaphat Research disclosed a short position and published a report alleging that Gildan’s organic growth had been negative for years and was obscured by financial engineering. The report alleged that Gildan had stuffed its distributors and customers with product beyond end-user demand, creating a product overhang of approximately $500 million. It cited former employees and distributor sources describing end-of-quarter requests to take excess inventory, extended payment terms, and a sharp rise in days sales outstanding. Gildan issued a brief press release the same day responding to the report.
Based on these events, $GIL investors filed a claim against Gildan Activewear Inc., alleging the Company:
Lacked adequate internal controls over financial reporting
Used channel stuffing to create the appearance of revenue
Reported net sales that were materially inflated by the channel stuffing
Investors argue that had the truth about Gildan’s sales practices been disclosed, Gildan’s stock would not have traded at artificially inflated prices during the Class Period.