Gildan cuts FY26 revenue outlook after weak Q3 demand

Gildan cut FY2026 revenue from continuing operations to $5.4bn-$5.5bn, down from $6.0bn-$6.2bn, after third-quarter sales of $1.47bn missed about $1.65bn in company guidance.

The apparel manufacturer also reset its full-year earnings, margin and cash targets:

• Adjusted diluted earnings per share: $3.70-$3.80, down from $4.65-$4.75.
• Adjusted operating margin: approximately 20%, down from 21.8%.
• Free cash flow: $700m-$750m, down from approximately $1bn.

Gildan president and CEO Glenn Chamandy said:

“Our results this quarter did not meet our expectations, reflecting a more subdued demand environment and near-term challenges in parts of our business across both Wholesale and Retail. The demand recovery we had anticipated has not materialised as expected, but our confidence in the underlying strength of the business and the long-term growth opportunity has not changed.”

What did the third quarter show?

Gildan reported revenue from continuing operations of $1.47bn for the quarter ended 27 September 2026, up 61.1% year on year, largely reflecting the HanesBrands acquisition.

That total missed about $1.65bn of company guidance. On a pro forma basis, which included HanesBrands in the prior-year comparison, revenue declined from $1.61bn.

Gildan attributed the shortfall to weaker-than-expected demand, an unfavourable product mix, lower selling prices, and product availability and service constraints.

How did wholesale and retail compare?

Reported acquisition growth masked lower sales in both channels on the like-for-like comparison:

• Wholesale: revenue fell 6.8% year on year to $735m, 10.8% below the pro forma prior-year figure.
• Retail: sales reached $732m compared with $122m a year earlier, reflecting the HanesBrands acquisition, but sat 7% below the pro forma prior-year figure.

The profit line moved differently. Adjusted operating income rose to $396m from $211m, while adjusted operating margin increased 380 basis points to 27%.

Gildan linked that improvement to higher gross margins and HanesBrands integration synergies, partly offset by the acquired business’s historically higher selling, general and administrative costs.

Adjusted diluted earnings per share increased 54% to $1.54. Net financial expenses rose $17m to $61m, mainly because of higher borrowing related to the acquisition.

On an adjusted basis, gross margin increased to 43.3% from 33.7% a year earlier.

What do nine months of 2026 show?

For the first nine months of 2026, revenue from continuing operations rose 65.9% to $4.22bn.

Adjusted operating income increased to $915m from $555m, although adjusted operating margin fell 20 basis points to 21.7%.

How is HanesBrands reshaping the group’s finances?

Gildan completed the sale of its HanesBrands Australia business to BBFIT Investments on 26 October, at an enterprise value of approximately A$700m, or about $490m.

The company said it used the net proceeds to repay debt. Integration remains on track to deliver approximately $100m in synergies during 2026, with annual run-rate cost synergies expected to reach about $250m by the end of 2028.

Chamandy set out the group’s operating priorities:

“We continued to make meaningful progress on the integration of HanesBrands and advance our synergy initiatives.

“In the current environment, our priorities remain clear: stay focused on what we can control, including leveraging the scale of our brands, our manufacturing network and our commercial capabilities, strengthen the foundations of our combined platform and continue to invest strategically in innovation and growth.”

What should buyers and suppliers track now?

For wholesale buyers, the immediate decision is how to place orders against lower annual revenue and margin expectations while demand, product mix, pricing and service remain under pressure.

Gildan has tied its next phase to integration and debt reduction. Its $100m synergy target for 2026 and roughly $250m annual run-rate cost target by end-2028 make delivery the practical checkpoint for any volume expansion.

Until Gildan reports delivery against those integration targets, wholesale buyers should plan against the revised $5.4bn-$5.5bn revenue range, not the demand recovery management once expected.