Investors who bought Gildan Activewear Inc. (NYSE: GIL) securities between February 19, 2025 and June 15, 2026 may be covered by a proposed class action alleging Gildan and three of its executives concealed a channel-stuffing practice that inflated reported sales. No class has been certified and there is nothing to file yet.
Allegations Only · No Settlement Yet
This article describes a class action complaint. The statements below are unproven allegations. Gildan Activewear Inc. and the individual defendants have not been found liable, there is no certified class, and there is nothing to claim at this time. This page is informational and is not legal advice.
What Is This About?
A shareholder of Gildan Activewear Inc., the Montréal-based maker of basic apparel such as T-shirts, underwear and socks, filed a proposed securities class action on October 15, 2026 in the U.S. District Court for the Northern District of New York. The case is Cortez v. Gildan Activewear Inc., No. 1:26-cv-02126, and it is assigned to U.S. District Judge Anthony J. Brindisi, with Magistrate Judge Daniel J. Stewart.The complaint claims that Gildan, CEO Glenn J. Chamandy, former chief financial and administrative officer Rhodri J. Harries and his successor, Luca Barile, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Its core allegation is that Gildan pushed extra product onto distributors and large customers to pull sales forward, and that this made its reported net sales and its statements about internal controls misleading. None of these claims has been tested in court.
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What the Complaint Alleges
The complaint focuses on two annual reports Gildan filed with the SEC on Form 40-F, the filing used by certain Canadian issuers. The first, filed February 19, 2025 for fiscal 2024, is where the proposed class period begins. The second was filed February 26, 2026 for fiscal 2025, the year Gildan completed its acquisition of HanesBrands on December 1, 2025.According to the complaint, both reports misled investors in two ways. First, it says the net sales figures in each report were inflated by channel stuffing. Second, it says management’s conclusions that Gildan’s internal control over financial reporting (in the 2024 report) and its disclosure controls (in the 2025 report) were effective were false, because the company allegedly lacked adequate controls. The complaint adds that the 2025 report also failed to disclose problems connected to Hanes. Sarbanes-Oxley certifications signed by Chamandy with Harries, and later with Barile, accompanied the filings.
To support its claim that the executives acted knowingly or recklessly, the complaint points to the leadership fight of 2023 and 2024: Gildan’s former board removed Chamandy as CEO in December 2023, and after a shareholder proxy campaign a new board reinstated him in May 2024. The complaint argues that history, and what it describes as weaker board oversight afterward, supports an inference of intent.
The Short-Seller Report and the June 16 Drop
The complaint says the alleged problems came to light on June 16, 2026, when Jehoshaphat Research published a report disclosing a short position in Gildan. As the complaint describes it, the report claimed Gildan had been stuffing its distribution channel for several years, estimated that about $500 million of revenue had recently been pulled forward from 2026, and argued that the company’s underlying sales would have declined without that practice.The report, as quoted in the complaint, relied on interviews with people it identified as former Gildan employees, a distributor, a customer and a former Hanes employee. Those sources described end-of-quarter requests to take extra inventory, extended payment terms of 90 to 120 days instead of the usual 30, and offers to cover freight. The report also said it was unable to determine with certainty how Gildan accounted for some of these transactions. These are the short seller’s claims, repeated in the complaint, and Gildan has stood by its disclosures.
The complaint says Gildan’s NYSE-listed shares fell $11.63, or 18.7%, to close at $50.34 on June 16, 2026. The proposed class period ends the day before, on June 15, 2026.
Gildan’s Response
Gildan issued a statement the same day saying it was aware of the short seller’s report, that it was confident its current disclosure gives investors accurate and comprehensive information about its finances and governance, and that it was reiterating the fiscal 2026 guidance it gave on April 30, 2026. The company said it did not plan to comment further. The complaint contends that this short response did not offer a competing explanation for the report’s claims. Gildan has not yet filed a response to the complaint in court.Who Is in the Proposed Class
The complaint proposes a class of all persons and entities, other than the defendants, who acquired Gildan securities publicly traded on the New York Stock Exchange from February 19, 2025 through June 15, 2026, inclusive, and were damaged as a result. It excludes the defendants, Gildan’s officers and directors, members of the individual defendants’ immediate families and their legal representatives, heirs, successors or assigns, and entities the defendants control.It seeks damages with interest, costs and attorneys’ fees, and demands a jury trial. The Rosen Law Firm, P.A. filed the complaint.
What Happens Next
Securities class actions follow the procedure set by the Private Securities Litigation Reform Act. After a case is filed, notice is published and investors have 60 days to ask the court to appoint them lead plaintiff. Plaintiff’s counsel published that notice on October 15, 2026 and gives the deadline as December 14, 2026. The court then picks a lead plaintiff and approves lead counsel, who typically file an amended complaint. Defendants commonly move to dismiss at that point, and discovery is generally paused while that motion is pending.There is no settlement and no claim process. If the case is later resolved through a settlement or judgment, class members would receive a court-approved notice explaining how to submit a claim.
Questions
Is there a Gildan settlement or claim form?
No. The case was filed on October 15, 2026 and is at the complaint stage. No class has been certified, no settlement has been reached, and there is no claim form. Gildan has not been found liable for anything alleged in the complaint.
Does the proposed class include Gildan shares bought on the Toronto Stock Exchange?
The complaint defines the proposed class as people and entities, other than the defendants and related insiders, who acquired Gildan securities publicly traded on the New York Stock Exchange between February 19, 2025 and June 15, 2026 and were damaged. It does not describe purchases on other exchanges. The court has not yet ruled on any class definition.
What is the lead plaintiff deadline in the Gildan case?
According to the notice published by plaintiff’s counsel on October 15, 2026, motions to serve as lead plaintiff are due by December 14, 2026. Under the Private Securities Litigation Reform Act, the court then selects a lead plaintiff and approves lead counsel. Serving as lead plaintiff is optional, and the notice states that sharing in any future recovery does not depend on it.
What did Gildan say about the short-seller report?
On June 16, 2026, Gildan issued a statement saying it was confident its existing disclosure gave investors accurate and comprehensive information about its finances and governance, reiterating its fiscal 2026 guidance, and saying it did not intend to comment further. The complaint argues that response was too brief to rebut the report.
What is channel stuffing?
Channel stuffing generally refers to a seller pushing more product onto distributors or customers than end demand supports, often near the end of a reporting period, so that sales are booked earlier than they otherwise would be. Whether Gildan did this is an allegation in the complaint that has not been proven.
Sources
- Docket, Cortez v. Gildan Activewear Inc., No. 1:26-cv-02126 (N.D.N.Y.)
- Class Action Complaint (ECF 1, filed October 15, 2026), the source for the class period, class definition, alleged misstatements, the short-seller report as quoted and the June 16, 2026 stock decline.
- Gildan Activewear statement regarding the short-seller report (June 16, 2026).
- Plaintiff’s counsel’s notice of the lawsuit (October 15, 2026), the source for the December 14, 2026 lead plaintiff deadline.
