Gildan Activewear Faces Securities Class Action Lawsuit Over Alleged Channel Stuffing
A class action lawsuit has been filed against Gildan Activewear following allegations of channel stuffing that reportedly led to an 18.7% decline in share price.
Kahn Swick & Foti, LLC has initiated a securities class action lawsuit against Gildan Activewear Inc., citing allegations of misleading investors. The legal action centers on claims that the company engaged in 'channel stuffing'—a practice involving the inflating of sales figures by inducing distributors to buy more products than they can sell.
The lawsuit asserts that these practices artificially boosted financial performance, which ultimately collapsed once the market realized the true inventory levels. The disclosure of these activities reportedly contributed to an 18.7% drop in the company's stock price, resulting in significant losses for shareholders.
Investors who incurred substantial losses have until December 14, 2026, to file lead plaintiff applications with the court. The litigation highlights potential governance issues regarding the company's revenue recognition practices and market transparency.