A group of investors is taking Gildan (asi/56842) to court.

Beda Cortez, an investor of the Counselor Top 40 supplier, filed a lawsuit in the U.S. District Court for the Northern District of New York on October 15, alleging Gildan inflated revenue and misled investors about internal controls. Cortez brought the case on behalf of investors who acquired Gildan securities between Feb. 19, 2025 and June 15, 2026. Gildan President and CEO Glenn Chamandy and Financial Chiefs Rhodri Harries and Luca Barile were named as defendants in the case.

According to Cortez’s allegations, Gildan convinced distributors to buy more merchandise than their customers needed, a practice known as channel stuffing, where a company pushes short-term growth by selling more product into a distribution channel than necessary for demand. Those orders, the lawsuit says, increased current sales but then left less business for later quarters. Cortez also claims that revenue numbers and assurances about financial controls in Gildan’s 2024 and 2025 annual filings were inaccurate.

The lawsuit builds on a report published by short seller Jehoshaphat Research in June alleging the apparel manufacturer inflated sales through channel stuffing, though Gildan disputed those claims at the time. Gildan shares fell as a result of the complaint.

“The Company is confident that its current disclosure provides its investors with accurate and comprehensive information regarding Gildan, including with respect to its financial information and governance practices,” Gildan said in a statement in June.

A spokesperson from Gildan declined to comment on the current lawsuit, but pointed Counselor to the previous statement the firm provided in June disputing the claims. That statement is publicly available on Gildan’s website.

In March, the publicly traded firm reported increased sales to more than $3.6 billion in 2025, with Q4 sales climbing more than 30%. In Q1 of 2026, the firm reported a surge in retail sales to $614 million, though wholesale revenue decreased due to what Gildan says was the result of tariffs, higher borrowing costs and global geopolitical uncertainty.

The lawsuit news comes just weeks after the FTC investigated Gildan, along with fellow Counselor Top 40 supplier S&S (asi/84358) after learning that S&S’s contract with Gildan limited pricing discounts to S&S, and prohibited Gildan from offering those discounts to S&S competitors. Gildan and S&S amended their agreement as a result.

Gildan ranks third on Counselor’s most recent list of largest suppliers in the industry based on 2025 estimated North American promotional products revenue of $901.6 million. As of Oct. 20, Gildan shares were selling at $41.28.