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The latest update is out from Gildan Activewear ( (TSE:GIL) ).
Gildan Activewear Inc., a Montreal-based manufacturer of activewear, underwear and socks, reported strong second-quarter 2026 results following its acquisition of HanesBrands. The company continues to focus on integrating the HanesBrands business, capturing synergies and expanding brand momentum in key categories across wholesale and retail channels.
For the quarter ended June 28, 2026, net sales from continuing operations rose 72.3% year over year to $1.58 billion, driven by the HanesBrands acquisition despite integration-related manufacturing optimization. Adjusted operating income climbed to $352 million, with an adjusted operating margin of 22.3%, significantly above guidance even as inventory reductions and softer retail volumes tempered proforma sales.
Gildan generated $347 million in cash flow from operating activities and $326 million in free cash flow, while gross margins benefited from lower raw material costs and contributions from HanesBrands. Management highlighted ongoing synergy realization, with most 2026 initiatives already implemented and the company on track to secure about $100 million in synergies this year and an expected $250 million annual run-rate over the next three years.
The company expects to receive about $220 million in IEEPA tariff refunds in 2026, largely to be recorded in the third quarter, and plans to reinvest the non-recurring portion into brand building, retail marketing and accelerated product innovation and packaging. A recurring structural benefit from the removal of tariffs on qualifying CAFTA-DR apparel is embedded in updated guidance, improving the long-term cost profile of the combined business.
Reflecting these dynamics, Gildan updated its full-year 2026 outlook, guiding revenue to the low end of $6.0 billion to $6.2 billion, an adjusted operating margin of roughly 21.8%, adjusted diluted EPS between $4.65 and $4.75, and about $1.0 billion in free cash flow, while maintaining its 2026–2028 three-year objectives. Management said the revised outlook underlines the earnings power of the enlarged group exiting 2026 and sets a foundation for further growth in 2027.
In a portfolio move, Gildan announced the sale of HanesBrands Australia for an enterprise value of about A$700 million (roughly $490 million), with closing expected in the second half of 2026. Proceeds will be used to pay down debt, supporting a faster return to the midpoint of its targeted leverage range and reinforcing balance sheet strength for shareholders and creditors.
The second-quarter disclosure, signed on July 30, 2026, underscores Gildan’s confidence in its integration progress and synergy capture, despite a cautious macro environment and temporarily lower sell-in as customers manage inventories. Stakeholders are likely to view the combination of robust cash generation, tariff relief and debt reduction as bolstering the company’s financial flexibility and competitive stance in the global apparel sector.
The most recent analyst rating on (TSE:GIL) stock is a Buy
with a C$78.00 price target.
To see the full list of analyst forecasts on Gildan Activewear stock,
see the TSE:GIL Stock Forecast page.
Spark’s Take on GIL Stock
According to Spark, TipRanks’ AI Analyst, GIL is a Neutral.
The score is held back primarily by elevated leverage and weakening/volatile cash flow, alongside a bearish technical setup with the stock trading below major moving averages. Offsetting these risks are steady revenue growth and maintained 2026 guidance with stated synergy execution, but valuation remains demanding at a ~37 P/E.
To see Spark’s full report on GIL stock,
click here.
More about Gildan Activewear
Gildan Activewear Inc. is a Montreal-based apparel manufacturer and marketer, listed on the TSX and NYSE, with a focus on basic activewear, underwear and socks. The company serves wholesale imprintables channels and major retail customers, leveraging large-scale, vertically integrated manufacturing and a growing portfolio of brands, including recently acquired HanesBrands assets and labels such as Champion, Comfort Colors and American Apparel.
Gildan’s business model emphasizes cost-efficient production, global sourcing and brand development across North America and international markets. Its strategy centers on integrating acquisitions like HanesBrands to capture cost and revenue synergies, optimizing its manufacturing footprint, and balancing wholesale and retail distribution to drive earnings growth and shareholder returns.
The company also actively manages its capital structure, targeting a net debt to proforma adjusted EBITDA leverage range of 1.5x to 2.5x. It uses cash flow generation and portfolio pruning, such as planned divestitures, to reduce debt and support ongoing investment in innovation, marketing and capacity, aiming to strengthen its competitive position in the global apparel industry.
Average Trading Volume: 675,353
Technical Sentiment Signal: Hold
Current Market Cap: C$13.52B
Find detailed analytics on GIL stock on TipRanks’ Stock Analysis page.