Gildan Activewear Facing Class Action Lawsuit Over Alleged Channel Stuffing

The lawsuit, Cortez v. Gildan Activewear Inc., alleges that the company and its executives violated the Securities Exchange Act of 1934 by failing to maintain adequate internal controls. Plaintiffs claim the firm engaged in channel stuffing—pressuring distributors to accept excess inventory—to artificially boost reported revenue figures. These practices allegedly rendered the company’s public statements regarding its business operations and financial health materially false.

Market scrutiny intensified on June 16, 2026, following a report from Jehoshaphat Research, which disclosed a short position in the company. The report claimed Gildan had created a product overhang of approximately $500 million, exceeding end-user demand. Following the disclosure, Gildan Activewear’s NYSE-listed shares dropped nearly 19%. Robbins Geller Rudman & Dowd LLP, the firm representing the class, is currently coordinating the search for lead plaintiffs interested in directing the litigation.