NEW YORK – August 13, 2026 (STL.News) Gildan Activewear Inc. (NYSE: GIL) remains the subject of multiple securities-law investigations following allegations by a short seller that raised questions about the apparel manufacturer’s revenue growth, distributor inventory levels, and certain sales practices.
Rosen Law Firm issued its latest investor notice Thursday, Aug. 13, saying it continues to investigate potential securities claims on behalf of Gildan shareholders. The firm said its investigation stems from allegations that Gildan Activewear may have provided materially misleading business information to investors.
The Rosen announcement is the latest in a series of investor alerts issued since June, when a report from short seller Jehoshaphat Research triggered a sharp decline in Gildan shares and prompted several shareholder-rights firms to begin investigations.
Importantly, the matter should not currently be confused with a filed securities class-action lawsuit. The notices reviewed for this report describe investigations into potential claims. Hagens Berman, for example, currently lists no class period and no lead-plaintiff deadline for its Gildan investigation.
BFA appears to have announced an early investigation of Gildan Activewear
A review of publicly available announcements shows that Bleichmar Fonti & Auld LLP, or BFA Law, announced an investigation into Gildan on the morning of June 17, one day after the short-seller report was released.
BFA’s announcement was published at 6:46 a.m. Eastern on June 17. The firm said it was investigating potential securities fraud, alleging that Gildan engaged in channel stuffing to artificially inflate revenue.
That is earlier than several other June 17 announcements located during a review for this article.
Block & Leviton announced its investigation later that morning. A Newsfile announcement timestamped 9:36 a.m. Eastern said the firm was investigating Gildan for potential securities-law violations following the June 16 stock decline.
Levi & Korsinsky announced an investigation at 2:47 p.m. Eastern on June 17, according to its PR Newswire release.
Based on the publicly available notices located and reviewed for this report, Bleichmar Fonti & Auld is the earliest law firm identified as publicly announcing a Gildan securities investigation following the June 16 short-seller report. That does not necessarily establish that BFA was the first firm to begin internal investigative work; it does establish that its June 17 announcement is the earliest public notice identified in this review.
Short-seller report triggered Gildan stock plunge
The investigations trace back to June 16, when Jehoshaphat Research disclosed a short position in Gildan and published a report challenging the company’s reported organic growth and business practices.
Jehoshaphat alleged that Gildan had been pushing excess merchandise into its distribution channel and estimated that approximately $510 million of unnecessary product was sitting in the channel during the first quarter of 2026.
The short seller also alleged that Gildan’s underlying organic growth had been weaker than its reported results suggested and questioned the company’s use of receivables purchase arrangements and certain payment terms offered to distributors.
These are allegations made by a short seller with a financial interest in a decline in Gildan’s share price. They have not been established as facts by a court.
The market reaction was nevertheless substantial.
Gildan shares fell approximately 18.8% on June 16. One market report placed the NYSE closing price at approximately $50.34, down 18.77% for the session.
Hagens Berman subsequently estimated that the decline erased approximately $2.15 billion from Gildan’s market capitalization.
The sharp one-day decline became the central event cited by law firms investigating whether investors may have securities claims.
Gildan Activewear rejects implications of short-seller report
Gildan responded to the allegations on June 16, the same day the report was published.
The Montreal-based company said it was aware of the short-seller report and expressed confidence in the accuracy and completeness of its existing disclosures.
Gildan said its disclosures provide investors with accurate and comprehensive information concerning the company, including its financial information and governance practices. It also reiterated the fiscal 2026 guidance it had issued April 30.
The company said at the time that it did not intend to comment further.
Gildan’s response is significant because the allegations contained in the Jehoshaphat report remain disputed.
Morningstar, in an analysis published June 16, also described the negative stock-market reaction as excessive while noting the risks raised by the short-seller report.
Multiple firms investigating Gildan
Since the June 16 decline, a growing group of shareholder-rights law firms has announced or continued investigations involving Gildan Activewear.
Among the firms identified in publicly available notices are:
- Bleichmar Fonti & Auld LLP — Announced an investigation June 17 into potential securities fraud involving the channel-stuffing allegations.
- Block & Leviton LLP — Announced June 17 that it was investigating potential securities-law violations following the stock decline.
- Levi & Korsinsky LLP — Announced an investigation June 17 and subsequently issued additional investor notices concerning Gildan.
- Hagens Berman Sobol Shapiro LLP — Announced an investigation focused on whether the short seller’s allegations are accurate and, if so, whether Gildan may have violated federal securities laws.
- Pomerantz LLP — Announced July 7 that it was investigating whether Gildan and certain officers or directors engaged in securities fraud or other unlawful business practices.
- Glancy Prongay Wolke & Rotter LLP — Continued an investigation in July concerning possible violations of federal securities laws.
- Rosen Law Firm — Continues to investigate potential securities claims and issued its latest public investor notice on Aug. 13.
Other shareholder-rights firms may also be reviewing the matter, and additional firms could become involved.
What investigators are examining
The investigations generally center on whether Gildan’s statements to investors accurately reflected the condition of its business and distribution channel before the June 16 report.
Jehoshaphat’s central allegation involves what is commonly referred to as “channel stuffing” — pushing more products into distributors than underlying customer demand would otherwise justify, potentially pulling future sales into an earlier reporting period.
The short seller alleged that certain customers were offered incentives or extended payment terms to encourage purchases near the end of reporting periods. It also questioned whether Gildan’s organic growth was as strong as investors had been led to believe.
Hagens Berman said its investigation focuses on whether Jehoshaphat’s analysis is accurate and, if so, whether Gildan engaged in improper revenue recognition practices.
Gildan, however, has stood behind its disclosures and financial reporting.
That distinction is important. The existence of a law-firm investigation does not establish that securities laws were violated, nor does a short-seller report constitute a regulatory or judicial finding of wrongdoing.
Gildan is a major global apparel manufacturer
Gildan Activewear is headquartered in Montreal and manufactures a broad portfolio of basic apparel, including activewear, underwear, socks and intimates.
Its brands include Gildan, Hanes, Comfort Colors, American Apparel, GOLDTOE, Peds, Bali, Playtex, Maidenform and Bonds. The company also operates under licensing arrangements involving other brands.
Gildan operates large-scale vertically integrated manufacturing facilities, primarily in Central America, the Caribbean, North America and Asia.
The company’s scale increased substantially following its acquisition of HanesBrands, a transaction that expanded Gildan’s exposure to consumer and innerwear markets.
According to Gildan’s 2025 shareholder report, activewear sales totaled approximately $3.09 billion for the year, up 9%, while innerwear sales increased 21%, primarily reflecting the HanesBrands acquisition.
Investigation is not the same as a lawsuit
Investors should distinguish between an investigation announcement and a securities class-action complaint filed in federal court.
The notices reviewed for this article primarily solicit information from investors and announce investigations into whether potential securities claims exist.
For example, Hagens Berman’s Gildan investigation page currently lists both the class period and lead-plaintiff deadline as “N/A.”
By comparison, when a securities class action has actually been filed, investor notices generally identify the court case, alleged class period, and deadline for investors seeking appointment as lead plaintiff.
No such conclusion should be drawn merely because a law firm’s marketing notice uses terms such as “class action investigation.”
What comes next for Gildan investors
The next phase will depend on what the investigating firms uncover and whether any investor ultimately files a complaint alleging violations of federal securities laws.
A lawsuit would still involve allegations that must be proven in court. It would not establish wrongdoing by Gildan or its executives.
For now, the central dispute remains between the claims presented in the June 16 Jehoshaphat Research report and Gildan’s position that its existing financial and governance disclosures are accurate and comprehensive.
Rosen’s Aug. 13 announcement demonstrates that the legal review surrounding the June stock decline remains active nearly two months after the short-seller report first rattled investors.
Editor’s note: Securities-law investigations and short-seller allegations do not constitute findings of wrongdoing. Gildan Activewear has disputed the implications of the June 16 short-seller report and has stated that it is confident in the accuracy and comprehensiveness of its disclosures. Investors should conduct their own research and consult qualified financial or legal professionals when appropriate. This article is for informational purposes and is not investment or legal advice.
