Gildan Activewear is facing a proposed securities class action alleging that it inflated revenue by pushing excess merchandise into its distribution network while misleading investors about its internal controls.
Filed Oct. 15 in the U.S. District Court for the Northern District of New York, the lawsuit was brought by investor Beda Cortez. It names Gildan, president and chief executive officer Glenn Chamandy, former finance chief Rhodri Harries and his successor, Luca Barile, as defendants.
Cortez brought the case on behalf of investors who acquired Gildan securities from Feb. 19, 2025 through June 15, 2026.
Gildan pushed distributors to buy more merchandise than their customers needed, Cortez alleges. Those orders boosted current sales but left less business for later quarters, the suit claims. Cortez also challenges the revenue figures and assurances about financial controls in Gildan’s 2024 and 2025 annual filings.
The allegations draw on a June 16 report from Jehoshaphat Research, which accused Gildan of loading distributors and customers with excess inventory. The short seller estimated the resulting product overhang at approximately $500 million, according to the complaint and an Oct. 16 notice from shareholder law firm Robbins LLP.
Jehoshaphat said it was shorting Gildan, betting its shares would fall.
According to the complaint, the firm alleged that Gildan offered incentives and more time to pay to get distributors to order sooner. Those purchases boosted current sales by drawing on orders that would otherwise come in later quarters, the short seller claimed.
Gildan’s New York-listed shares fell $11.63, or 18.7 percent, to close at $50.34 on June 16, according to the complaint.
Gildan defended its disclosures in a statement issued that day.
“The company is confident that its current disclosure provides its investors with accurate and comprehensive information regarding Gildan,” it said.
The company said that confidence extended to its financial information and governance practices. It also reiterated its fiscal 2026 guidance at the time and said it did not intend to comment further.
Gildan subsequently updated its outlook in July, forecasting full-year revenue at the low end of its previously announced $6 billion to $6.2 billion range. The company, which completed its HanesBrands acquisition in December 2025, reported second-quarter net sales from continuing operations of $1.58 billion, up 72.3 percent year over year.
The lawsuit seeks damages, interest and legal expenses for alleged violations of federal securities laws, along with a jury trial. A jury would determine the amount of damages at trial.
Investors seeking appointment as lead plaintiff have until Dec. 14 to file a motion, according to Robbins LLP’s notice.