Shares of Gildan Activewear fell sharply on the day, sliding 18.8% to close at $70.39 after trading as low as $65.15, following the publication of a short-seller report that accused the company of inflating revenue through channel stuffing.
The report was released by Jehoshaphat Research, which also disclosed it held a short position in the Montreal-based apparel company. Jehoshaphat said its investigation suggested Gildan had been placing roughly half a billion dollars of excess inventory with distributors - inventory it contends exceeded genuine end-user demand - in order to create the appearance of revenue growth.
Jehoshaphat said it arrived at its conclusions after interviewing former employees and customers and conducting an accounting analysis. The short seller explicitly tied its short position to the alleged channel-stuffing practices.
Gildan issued a brief response on the same day, confirming it was aware of the short-seller report and saying it was confident that its existing disclosure gave investors accurate and comprehensive information about its financial reporting and governance practices. The company reiterated the fiscal 2026 guidance it had issued in its April 30, 2026 press release and declined to provide any further comment.
The terse corporate reply did little to steady sentiment. Market observers noted that the report, combined with the company's limited rebuttal, coincided with one of Gildan's steepest single-day declines in more than six years. The share drop pushed the stock toward the lower end of its 52-week trading range of $63.41 to $100.44.
Analysts reacted differently to the development. TD Securities maintained a Buy rating on Gildan and left its target price at $80 as of June 16, 2026. Separately, UBS analyst Jay Sole described the situation as a buying opportunity and stated he did not expect Gildan to miss its revenue forecasts for fiscal 2026.
Market context for the day was mildly risk-off. The S&P 500 slipped 0.6% and the NASDAQ fell 1.2%, while the consumer discretionary index on the S&P/TSX Composite declined sharply in part due to Gildan's fall. Commentators emphasized, however, that the sell-off was predominantly idiosyncratic - driven by the company-specific allegations - as peers in the apparel sector did not suffer comparable declines.
The convergence of an explosive short-seller accusation, a constrained corporate response and a weak broader market created the conditions for Gildan's dramatic intraday move. Jehoshaphat's allegation that roughly $500 million of inventory was pushed into distribution channels was the central claim that moved the stock, according to the short seller's published analysis.
Gildan's stock performance on the day represents a marked volatility event for the company, with the share price retreating significantly toward the bottom of its annual trading band and marking the most pronounced single-session decline in over six years.
Clear summary
Gildan Activewear plunged 18.8% to $70.39 after Jehoshaphat Research disclosed a short position and published a report accusing the company of channel stuffing involving roughly $500 million of excess inventory; Gildan said it stood by its disclosures and fiscal 2026 guidance, while TD Securities and UBS expressed contrasting views on the stock.
Key points
- Jehoshaphat Research disclosed a short position and released a report alleging Gildan pushed about $500 million of excess inventory to distributors to inflate revenue.
- Gildan acknowledged the report, reiterated its fiscal 2026 guidance from April 30, 2026, and declined further comment.
- TD Securities reaffirmed a Buy rating with an $80 target on June 16, 2026, while UBS analyst Jay Sole called the slump a buying opportunity and did not expect revenue shortfalls for fiscal 2026.
Risks and uncertainties
- Allegations from a short seller regarding channel stuffing could continue to weigh on Gildan's share price as investors assess the credibility of the claims and the firm's disclosures - impacting equity market sentiment toward the company.
- The limited nature of Gildan's public response - reiteration of prior guidance and refusal to elaborate - leaves open uncertainty about how the company will address the allegations going forward, which may affect investor confidence in the short term.
- Broader market weakness provided a mildly negative backdrop on the day, though the sell-off was largely idiosyncratic; fluctuations in equity markets could amplify company-specific moves even when peers are not similarly affected.
Note: All figures, dates and quotes in this report reflect the information provided in the published short-seller report, the company's public statement and cited analyst commentary.