Gildan Activewear (NYSE: GIL) Securities Class Action: Channel-Stuffing Allegations and December 14, 2026 Lead Plaintiff Deadline

The lawsuit alleges that Gildan used aggressive sales practices to push excess inventory into distributors and customers, and thereby pulled revenue forward from future periods. Plaintiff alleges this so-called 'channel stuffing' caused Gildan to overstate its sustainable demand, revenue growth, financial performance, and the effectiveness of its internal controls.

Two features set this case apart from a typical accounting and disclosure case. First, the alleged corrective disclosure is a short-seller report — not a government enforcement order, a company admission, or an accounting restatement. Second, Gildan is a Canadian company, which changes the analysis of any shareholder's corporate-law remedies. The allegations have not been proven.

Gildan is a vertically integrated apparel manufacturer — T-shirts, fleece, activewear, underwear, hosiery, and other basic apparel — selling to wholesale distributors, screen printers, embellishers, major and online retailers, and global lifestyle brands. It is headquartered in Montréal and incorporated under the Canada Business Corporations Act.

Two technical points matter throughout this case. Gildan's common shares are directly listed on both the New York Stock Exchange and the Toronto Stock Exchange under the symbol GIL — so NYSE:GIL is a direct common share, not an ADR or ADS. And because Gildan is a Canadian foreign private issuer, it files a Form 40-F (rather than a domestic Form 10-K), furnishes interim information on Form 6-K (rather than Form 10-Q), and prepares its financial statements under IFRS (rather than U.S. GAAP), with control certifications that also interact with Canadian National Instrument 52-109.

'Channel stuffing' generally refers to pushing more inventory into distributors or customers than underlying end-user demand would otherwise support — often near the end of a reporting period, encouraged by discounts, rebates, extended payment terms, or free freight. Importantly, not every inventory promotion or accelerated sale is improper.

The central question is not simply whether a distributor bought extra inventory. It is why the distributor bought it, on what terms, when revenue was recognized, and what investors were told about underlying demand. If genuine final sales are merely accelerated, the issue may concern the sustainability and timing of demand; more serious accounting issues can arise only if revenue was recognized when the customer had not truly assumed the risks of ownership, when return rights or side agreements undermined the sale, or when the transaction otherwise failed applicable revenue-recognition rules.

Sell-in is product Gildan sells to distributors or retailers. Sell-through is product those intermediaries ultimately sell to end customers. A manufacturer can report strong near-term sell-in while end-user demand is weaker, distributors carry rising inventory, and future orders are pulled forward — because the distributor must first work through its existing inventory before ordering again. That dynamic is the economic core of the short-seller thesis, and the lawsuit alleges Gildan's reported growth was affected by it.

The class period ends June 15, 2026. The next day, June 16, 2026, Jehoshaphat Research published a report titled 'Stuffing All of the Channel Some of the Time?' Jehoshaphat disclosed that it held a short position in Gildan — meaning it stood to profit if GIL's price fell, a material economic interest that should be weighed when reading its allegations.

According to the complaint, the report alleged Gildan pushed substantial excess merchandise into customers and distributors, offered extended payment terms, pulled future orders into earlier quarters, and accumulated a large channel-inventory overhang — estimating that roughly $500 million of sales or product had effectively been pulled forward or accumulated in the channel. That figure is the short seller's estimate, not a Gildan admission or an audited finding. Relying on people it identified as former employees, distributors, and customers, the report described quarter-end requests to accept product above forecast, and payment terms allegedly extended from about 30 days to as much as 60, 90, or even 120 days to accept larger orders near quarter end.

Not exactly — and this caveat is essential. Jehoshaphat raised the possibility that certain alleged transactions could implicate improper revenue recognition, but the report's own wording, as quoted in the complaint, acknowledged that it did not have 'the insight necessary to draw a conclusion with certainty' about how Gildan actually accounted for the transactions it described. So the report should not be read as having established an accounting violation; it raised questions.

Gildan disputed the short seller's thesis the same day. The company stated that it was confident its existing disclosure provided investors with accurate and comprehensive information concerning its financial information and governance practices, reiterated its fiscal 2026 guidance, and said it did not intend to comment further at that time. The complaint argues that Gildan's concise same-day response did not adequately rebut the report — but that is plaintiff's argument, not an independent factual finding, and Gildan has not admitted any part of the report.

According to the complaint, GIL fell $11.63 per share, or about 18.7%, to close at $50.34 on the NYSE on June 16, 2026 (down from about $61.97 the prior trading day, with an intraday low near $46.55). The complaint uses the NYSE close-to-close figure for its loss-causation allegations.

Yes. Gildan's trade accounts receivable rose from about $412.5 million at the end of 2023 to about $542.4 million at the end of 2024. Rising receivables can be relevant to evaluating payment terms, distributor inventory, and days sales outstanding — but an increase in receivables does not, by itself, prove channel stuffing.

Receivables rose much more by the end of 2025 — to about $955.7 million — but that comparison cannot be read in isolation, because Gildan acquired HanesBrands on December 1, 2025, which materially increased the combined company's revenue, assets, receivables, inventory, and liabilities. Attributing the full increase to the alleged sales practices would be analytically unsound.

Gildan acquired 100% of HanesBrands on December 1, 2025 for roughly $2.2–$2.3 billion, adding brands such as Hanes, Bali, Maidenform, Playtex, and Wonderbra. For FY2025, Gildan reported $3.619 billion of continuing-operations net sales (up about 11%), but Hanes contributed about $217 million for December 1–28 alone; excluding Hanes, sales were about $3.403 billion, up about 4% — necessary context for any discussion of Gildan's 'revenue growth.'

Gildan's 2025 annual report expressly disclosed that its evaluation of internal controls excluded certain recently acquired Hanes controls because the acquisition had only closed December 1 — so it would be inaccurate to say Gildan 'secretly excluded' Hanes from its control testing. The complaint's allegation is that the broader control statements remained misleading. Separately, in February 2026 Gildan said it was proactively undertaking a temporary reduction of inventory across its combined customer channels as part of the Hanes integration and manufacturing-network optimization — relevant commercial context, but not an admission of the short seller's channel-stuffing thesis.

The complaint leans on an unusual leadership history. Gildan's prior board removed founder Glenn Chamandy as CEO in December 2023; the shareholder Browning West then led a proxy campaign to replace the board and reinstate him; and in May 2024, after substantial shareholder support for Browning West's slate, the incumbent board resigned and Chamandy returned as CEO. The complaint uses this to argue the replacement board may have exercised less oversight — but that corporate-governance history was fiercely contested (with its own litigation) and does not itself establish securities fraud or channel stuffing.

The case names two finance executives for a simple reason. On February 19, 2025 — the first day of the class period — Gildan announced that Rhodri Harries planned to retire effective January 1, 2026 and that Luca Barile would succeed him as CFO effective March 1, 2025, as part of a multi-year succession plan. Barile later signed Gildan's 2025 annual-report certifications. Because the retirement was announced roughly sixteen months before the short report, it should not be characterized as an accounting-related resignation.

As a post-class development: on July 30, 2026, Gildan reported Q2 continuing-operations net sales of about $1.58 billion (up 72.3% year over year, with the Hanes acquisition materially affecting comparability), along with $347 million of operating cash flow, $326 million of free cash flow, and $1.28 of adjusted diluted EPS. Gildan said it now expected full-year 2026 revenue at the low end of its previously announced $6.0–$6.2 billion range, projected adjusted diluted EPS of $4.65–$4.75, and maintained its 2026–2028 objectives.

So Gildan continued reporting substantial growth and did not withdraw its long-term objectives after the report, though it moved its 2026 revenue expectation to the low end of the prior range. That does not prove the short thesis false, and, as of the public materials reviewed for this page, Gildan had not announced a financial restatement tied to Jehoshaphat's allegations — but its continued filings do not, by themselves, resolve the securities lawsuit either.

A separate FTC inquiry concerned one contractual provision in a sales-incentive agreement with a single wholesale distributor — a provision restricting certain pricing or discounts to competitors. Gildan disclosed in October 2026 that the provision was amended and the FTC closed the inquiry with no settlement, no monetary penalty, and no admission of wrongdoing. That matter involved a different legal issue and should not be treated as regulatory confirmation of the channel-stuffing allegations in this securities case.

The complaint does not plead an insider-selling theory. Preliminary Canadian insider data indicate that former finance executive Rhodri Harries made substantial share sales shortly after the class period began (including sales reported in late February 2025) and exercised 282,737 options during fiscal 2025 — but those transactions occurred around the same period in which Gildan had already announced his planned retirement, and they require further review of the original Canadian (SEDI) insider filings, option exercises, holdings before and after, and any preplanned trading arrangements before any conclusion is drawn. No comparable basis was identified for presenting CEO Glenn Chamandy or CFO Luca Barile as having engaged in suspicious class-period selling, so the three defendants should not be lumped together as 'insiders who dumped stock.' An executive stock sale does not, by itself, establish insider trading, and Julie & Holleman does not presently characterize this as an insider-trading case.

Section 10(b) and Rule 10b-5

The complaint asserts federal securities-fraud claims under Section 10(b) and Rule 10b-5 against all defendants, based on the allegedly misleading statements about Gildan's revenue, demand, and internal controls.

Section 20(a)

It also asserts controlling-person claims against Glenn Chamandy, Rhodri Harries, and Luca Barile.

The alleged class period is February 19, 2025 through June 15, 2026 — the first day being when Gildan reported Q4/FY2024 results and filed its 2024 Form 40-F, and the last being the trading day before the short report. Investors should preserve all brokerage statements and transaction records showing NYSE-traded GIL purchases and sales during that period.

The current complaint expressly defines the proposed class by reference to Gildan securities publicly traded on the NYSE. Because Gildan is dual-listed, investors who purchased GIL on the Toronto Stock Exchange should not assume their transactions fall within this U.S. class; separate Canadian securities-law or corporate-law rights may require independent analysis.

And no — GIL is not an ADR or ADS. Gildan's common shares are directly listed on both the NYSE and the TSX under the symbol GIL.

The current published PSLRA lead plaintiff deadline is December 14, 2026.

Do I Have to Become Lead Plaintiff?

Generally, no. A lead plaintiff is the investor or investor group the court appoints to actively supervise the proposed class and proposed lead counsel. Most investors remain passive class members.

Lead Plaintiff Deadline ≠ Settlement Claim Deadline

These are different dates. An eligible investor ordinarily does not need to seek lead-plaintiff appointment merely to remain a potential passive class member.

Generally, no, for the U.S. federal securities class action — eligibility, loss causation, and damages turn on matters including purchase and sale timing, and selling GIL does not automatically eliminate a potential claim. Canadian corporate-law remedies involve a different standing analysis, discussed below.

Potentially — but this is where Gildan's Canadian status matters most. Gildan is governed by the Canada Business Corporations Act (CBCA), not Delaware law, so the familiar Delaware concepts (such as a Section 220 books-and-records demand or Delaware's continuous-ownership rule) do not apply. Canadian corporate law provides its own distinct mechanisms, and standing is defined differently:

• Complainant status (CBCA §238) is broad — it can include current and former, registered and beneficial, security holders — which is materially different from Delaware's current-holder framing.
• A derivative action (CBCA §239) lets a qualifying complainant seek the court's leave to bring a claim in the corporation's name, generally on at least 14 days' notice to the directors, in good faith, and where the action appears to be in the corporation's interests.
• The oppression remedy (CBCA §241) lets a complainant seek relief for conduct that is oppressive, unfairly prejudicial, or that unfairly disregards a stakeholder's interests — though the short-seller allegations do not automatically support such a claim.

Julie & Holleman LLP is evaluating whether the alleged sales, accounting, and governance issues may warrant separate corporate-governance analysis under Canadian law, and whether coordination with Canadian counsel or other investigative steps may be appropriate for a Gildan shareholder. No determination has been made that any Canadian claim exists, and current or former Gildan security holders interested in Canadian remedies should obtain advice concerning the CBCA and applicable Canadian securities laws.

Julie & Holleman LLP is investigating allegations involving Gildan Activewear Inc., GIL, Glenn Chamandy, Rhodri Harries, Luca Barile, Jehoshaphat Research, channel stuffing, distributor inventory, accounts receivable, payment terms, revenue recognition, HanesBrands, internal controls, and board oversight. We are interested in hearing from:

NYSE Investors With Securities Losses

Investors who acquired Gildan securities publicly traded on the NYSE between February 19, 2025 and June 15, 2026 and suffered losses, including investors considering lead-plaintiff appointment before December 14, 2026.

Gildan Shareholders

Current or former Gildan security holders interested in evaluating whether separate Canadian corporate-law remedies may apply, who should obtain advice concerning the CBCA and applicable Canadian securities laws.