Gildan Activewear (NYSE:GIL) Stock Plunges Amid Short-Seller 'Channel-Stuffing' Allegations

• Gildan Activewear (NYSE:GIL) stock experienced a significant drop following a short-seller report alleging "channel-stuffing."
• The report claims the apparel manufacturer concealed $510 million in excess inventory, contradicting previous management statements.
• Despite a legal investigation into potential securities law violations, some analysts maintain positive ratings and price targets for the company.

Gildan Activewear (NYSE:GIL) is a company that manufactures and sells basic apparel, such as t-shirts and underwear. Shares of Gildan Activewear recently dropped by 18.77% after a report from a short-seller firm. Short-sellers are investors who profit when a stock's price falls. The company has a market capitalization of approximately $7.94 billion.

The report from Jehoshaphat Research alleges that Gildan Activewear engaged in "channel-stuffing." This is a practice where a company sends more products to its distributors than they can realistically sell, which can artificially inflate sales figures. The report claims Gildan Activewear concealed about $510 million in excess inventory in its distributor channels.

This allegation contradicts previous statements from Gildan Activewear's management. On a Q1 2025 earnings call, CEO Glenn Chamandy told investors that inventory in the channel was "in good balance." He later added on the Q3 2025 call that sales in the distributor channel "remain healthy."

As highlighted by PR Newswire, the law firm Levi & Korsinsky has started an investigation into Gildan Activewear for potential securities law violations. The firm is examining whether executive statements were misleading, especially after a recent filing where the CEO and CFO certified that company reports contained no untrue statements.

Despite the allegations, some analysts remain positive. RBC Capital maintained its Outperform rating for Gildan Activewear on June 17, 2026. Separately, Scotiabank analyst John Zamparo set a new price target of $65.00, a potential 29.12% upside from the price of $50.34 when the target was issued.