Gildan Activewear Inc. GIL Earnings Miss Estimates by 2.5%

Gildan’s adjusted EPS rose from a year ago, but sales missed expectations and a sharp cut to 2026 guidance has put demand and execution in focus.

Gildan Activewear Inc. (TSX: GIL) reported adjusted earnings of US$1.54 per share for the quarter ended September 30, 2026. That was 2.5% below the US$1.58 consensus estimate, but 54% higher than a year earlier. The HanesBrands acquisition boosted reported revenue. Still, sales fell short of the company’s earlier outlook, and Gildan lowered its full-year revenue and adjusted EPS forecasts. For Canadian investors, the question is whether margin gains and integration savings can make up for softer demand, product availability issues, and higher debt.

Recent earnings trend

Analyst coverage: 8 analyst(s) cover this name; upcoming EPS consensus is available.

Beat estimates in 3 of the last 4 comparable quarter(s).

Investor takeaway: The quarter had some bright spots. Adjusted operating margin reached 27%, above the company’s roughly 26% expectation, and free cash flow for the first nine months was about US$622 million. But third-quarter sales of US$1.47 billion missed the roughly US$1.65 billion outlook. Gildan also cut its 2026 adjusted EPS guidance to US$3.70–US$3.80 from US$4.65–US$4.75. The earnings miss was modest; the bigger concern is the weaker outlook. See the Gildan stock page for company and share information.

US$3.70–US$3.80

That’s Gildan’s revised 2026 adjusted EPS outlook, down from US$4.65–US$4.75. The cut puts the quarter’s 2.5% miss against consensus in perspective. Investors now need to assess the company’s lower earnings outlook as it deals with softer demand and integration challenges.

Analysis

For the quarter ended September 30, Gildan reported adjusted diluted EPS of US$1.54, 2.5% below the US$1.58 calendar estimate. Adjusted EPS rose 54% from US$1.00 a year earlier. Reported net sales from continuing operations increased 61.1% year over year to US$1.47 billion, reflecting the HanesBrands acquisition. However, sales missed the company’s earlier outlook of about US$1.65 billion. On a pro forma basis, sales were US$1.61 billion. Wholesale sales were US$735 million, down 10.8% from the prior-year pro forma figure, while retail sales were US$732 million, down 7% on the same basis.

Adjusted operating income was US$396 million, and the adjusted operating margin reached 27%, up 380 basis points year over year and above the company’s roughly 26% guidance. Adjusted gross margin was 43.3%. Excluding tariff refunds and other factors, management put adjusted gross margin at about 37%. The margin improvement points to cost control and integration benefits, but it wasn’t enough to make up for the sales shortfall.

Gildan lowered its 2026 revenue guidance to US$5.4 billion–US$5.5 billion from US$6.0 billion–US$6.2 billion. Adjusted operating margin guidance fell to about 20% from about 21.8%, while adjusted EPS guidance dropped to US$3.70–US$3.80 from US$4.65–US$4.75. The company also cut its full-year free cash flow outlook to US$700 million–US$750 million from about US$1 billion. The recent earnings trend table and chart provide quarter-by-quarter comparisons.

Analysis

Management said the sales shortfall reflected subdued demand, an unfavorable mix, lower selling prices, and product availability issues, particularly in retail. It estimated that availability constraints cost about US$60 million in third-quarter sales. Gildan also cited weaker fleece demand: September point-of-sale trends were down in the mid-to-high teens. Retailers are replenishing less as they manage working capital, a pattern the company expects to reduce fourth-quarter sales by about US$145 million.

The acquisition gives Gildan more scale, but it also adds debt and integration work. The company reported net debt of US$4.14 billion and leverage of 2.7 times net debt to trailing 12-month pro forma adjusted EBITDA, above its target range of 1.5 to 2.5 times. The sale of HanesBrands Australia brought in about US$490 million, which Gildan used to repay debt. Management is targeting about US$100 million in Hanes integration synergies for 2026 and a US$250 million annual run rate by the end of 2028. Investors will be watching to see whether Gildan can deliver those savings while demand and product availability improve.

GIL.TO’s last close in the supplied market data was C$51.51, below its 50-day moving average of C$61.82 and its 200-day moving average of C$76.55. The shares were down 13.89% over one month, despite gaining 5.12% in one day. These figures reflect the supplied market snapshot and don’t explain the cause of any particular day’s move.

Analysis

The supplied analyst-target data shows an average target of C$104.57, compared with the last close of C$51.51. That implies 103% upside. The consensus label is bullish based on the average target relative to the last close; a formal rating isn’t available for this Canadian listing. Analyst targets can change and aren’t guarantees. One analyst action points the other way: UBS downgraded Gildan to Neutral from Buy after the results and cut its target to US$38 from US$71. The firm cited weaker demand, lower guidance, and possible pressure on 2027 estimates. See the analyst ratings section for target information.

Wealth Awesome’s statistical 90-day price model gives a mean forecast of C$43.09. Its 68% range is C$28.28–C$65.65, and its 95% range is C$18.56–C$100.03. The model reports annualized drift of -50.0% and 30-day volatility of 70.5%. These are statistical estimates, not financial advice or guaranteed outcomes. See the price prediction section for details.