A short report from Jehosaphat Research on Gildan Activewear Inc. (GIL.TO, GIL) "skews the context for its own agenda," CIBC Capital Markets said in a research note.
The Canadian manufacturer of branded clothing issued a statement and reaffirmed fiscal 2026 guidance after the report was released on Tuesday.
The stock declined more than 18% on the Toronto Stock Exchange.
"The report mainly focuses on Gildan allegedly 'channel stuffing' (i.e., selling more to distributors than necessary to support demand) and utilizing off-balance sheet trade receivables to obscure organic revenue growth," CIBC analyst Mark Petrie said in a note to clients.
"The focal point of this thesis is the rise in days sales outstanding (DSO) and DSO when including the off-balance sheet trade receivables," the analyst said.
Petrie maintained an Outperformer rating and US$77 price target on Gildan shares.
"Overall, while the report highlights relevant points, including on concerns around Gildan's recent organic revenue growth, we believe it skews the context for its own agenda," the analyst said.
"We believe DSO increasing is an intentional decision by Gildan to leverage its scale and balance sheet to build market share," Petrie said. "We continue to view management's F2026 guidance as achievable absent a broader incremental macro slowdown."
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