Gildan under investigation for alleged securities fraud

Canadian apparel manufacturer Gildan Activewear (Gildan) is under investigation for potential securities fraud following allegations of channel stuffing that led to a sharp decline in its share price.

Securities litigation firm Bleichmar Fonti & Auld (BFA) initiated the inquiry to determine whether Gildan misled market participants regarding its revenue drivers and overall financial performance. The investigation centres on claims that Gildan artificially inflated top-line performance by accelerating product sales into distribution channels. Gildan previously attributed its sales performance to market share gains and product innovation.

Short seller report triggers stock decline

Concerns regarding Gildan came to light following a report published by short-seller research firm Jehoshaphat Research. The report, titled ‘Stuffing All of the Channel Some of the Time?’, alleged that Gildan engaged in channel stuffing to project revenue growth. Jehoshaphat Research stated that pulling forward sales cannibalised future demand and obscured underlying financial performance. The claims were based on interviews with former employees, customers, and distributors.

Following the publication on June 16, 2026, Gildan stock fell 18.75 percent, or 11.62 dollars per share, closing at 50.35 dollars compared to 61.97 dollars on June 15, 2026.

Implication for investors and the market

BFA is evaluating whether Gildan made false or misleading statements to the public. Investors who experienced financial losses following the stock drop have been invited to submit details to assess potential recovery options through class-action litigation.

Gildan produces basic activewear items, including T-shirts, fleece, underwear, and socks, supplying products primarily to wholesalers, screen printers, and retailers.