Gildan Activewear faces class action lawsuit over alleged accounting irregularities
Investors have launched a class action lawsuit against Gildan Activewear, alleging the company misled shareholders regarding its financial health and sales practices.
A federal class action lawsuit has been filed against Gildan Activewear Inc., centered on allegations that the company issued misleading statements concerning its financial condition and internal controls between February 2025 and June 2026. The litigation, led by Hagens Berman, targets the company's purported use of channel stuffing—sending excess inventory to wholesalers to artificially inflate reported sales figures.
The complaint further alleges that Gildan’s revenue growth was driven by unsustainable inventory pull-forwards rather than genuine market demand. Additionally, it claims the company overstated potential synergies from its acquisition of HanesBrands while failing to disclose rising Days Sales Outstanding (DSO) and distributor saturation levels.
Market scrutiny intensified in June 2026, following an investigative report by Jehoshaphat Research that questioned the company's sales recognition practices. The report triggered an 18.75% decline in Gildan’s stock price. Investors seeking to serve as lead plaintiffs must submit their claims by the December 14, 2026, deadline.