Thoughts on Gildan Short Report

Research evidence excerpt

Thoughts on Gildan Short Report

June 16, 2026 | 23:42 ET~

Gildan Activewear

GIL-NYSE Rating Price: Jun-16 Target Total Rtn Retailing/Consumer

GIL-TSX Outperform $50.34 $82.00 65%

Stephen MacLeod, CFA Analyst

stephen.macleod@bmo.com (416) 359-8069

Nevan Yochim, CFA VP Associate

Thoughts on Gildan Short Report nevan.yochim@bmo.com (416) 359-4193

Lauren Montanari, CFA Associate

lauren.montanari@bmo.com (437) 898-7486

Bottom Line: Legal Entity: BMO Nesbitt Burns Inc.

Earlier today, a short report on Gildan Activewear was published, causing the stock to

2YR Price Volume Chart

drop ~19%. While the report raises some questions that warrant further clarification, 80

many of its conclusions reflect interpretation and can be explained by industry changes 70

that have evolved over many years, as well as Gildan-specific competitive dynamics; 60

rather than nefarious or misleading practices as suggested in the report. Gildan issued 50 2015

a short press release acknowledging the report and reiterating 2026E guidance; we 10

expect further rebuttals to the 60-page short report. 5

30 0

Dec Jun Dec Jun

Key Points LHS: Price ($) / RHS: Volume (mm) Source: FactSet

Company Data in $

In our view, the central allegation is that Gildan has engaged in "channel

Dividend $1.00 Book Value $21.12stuffing" with distributors to meet near-term sales objectives, pointing to higher

DSO when adjusted for receivables factoring. Yield 2.0% Shares O/S (mm) 185.2

Net Debt (mm) $4,891 Market Cap (mm) $9,322

• While DSO has increased in recent years (from 64 in 2023 to 102 in Q3/25, pre-

Hanes), this coincides with structural changes in the distributor channel – most BMO Estimates in $

notably the 2024 merger of S&S and alphabroder – which resulted in a shift (FY-Dec.) 2024A 2025A 2026E 2027E