Gildan Activewear Inc. (GIL.TO): 2Q Preview – Focus Will Be on Addressing Market Concerns; Expect Reiteration of Guidance

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Gildan Activewear Inc. (GIL.TO): 2Q Preview – Focus Will Be on Addressing Market Concerns; Expect Reiteration of Guidance

Gildan Activewear Inc. (GIL.TO)

21 July 2026 Citi Research

From a short crowding perspective, GIL is more crowded than it was prior to 1Q26

earnings. GIL’s short crowding score of 86% (on a scale of 0-100% with 100% being

the most crowded short) is higher than the sector median of 64% and higher than

its score of 74% three months ago. (see Figure 5). GIL’s short interest is ~4% of float,

higher than it was prior to the 1Q call (~3%).

Three things that matter most (beyond guidance):

(1) More details on S&S relationship and increase in accounts receivable: There

will be a high level of attention on GIL’s accounts receivable and terms that

they have with S&S (as called out in the Jehoshaphat Research short report

published on 6/16). Mgmt’s explanation of the increase in DSOs with S&S will

likely be the key topic during their 2Q report. Mgmt has previously said that

their working capital will be below 30% of sales by year-end (and they

reiterated that view when we spoke to them after the short report), but details

on how they achieve this reduction in working capital will also be a focus.

From conversations with industry contacts, we believe S&S views F26 as a

destocking year; we want to understand if mgmt can still achieve their

guidance if one of their largest clients is focused on destocking in F26.

(2) Update on integration and synergies. We will listen for an update as to where

GIL is in their integration and if they are on track with their integration plans. A key

to the ultimate earnings power of GIL stems from the company realizing at least

$250MM in synergies from the HBI transaction. Mgmt has indicated that bringing