Gildan Activewear (GIL) has used channel stuffing to portray stronger revenue growth, with the pulling forward of sales allegedly cannibalizing future demand and inflating the company's overall growth trajectory, Jehoshaphat Research said Tuesday.
The research firm estimates that, as a result of these practices, distributors and customers are currently "stuffed" with excessive inventory valued at about $510 million as of Q1.
Jehoshaphat Research said Gildan's revenues would have declined over the past three years absent what it described as heavy channel stuffing, adding that Street expectations underestimate the level of acceleration required for the business to sustain 5% annual growth.
The report also said that four interviewed sources described instances of Gildan "asking for help" or even "compelling" customers to pull forward sales at quarter-end, including through extended payment terms and other incentives.
Gildan Activewear said Tuesday it is aware of a short seller report and reiterated that its current disclosures provide investors with accurate and comprehensive information regarding its financial results and governance practices. The company also reiterated its fiscal 2026 guidance.
Shares of Gildan Activewear were down nearly 19% in Tuesday trading.
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