MONTREAL – Shares of Gildan Activewear Inc. closed 18 per cent lower on Thursday after the clothing company reported a muted third-quarter result and cut its full-year guidance.
Shares in the company closed C$11.40 lower at C$49.04 on the Toronto Stock Exchange.
“Our results this quarter did not meet our expectations, reflecting a more subdued demand environment and near-term challenges,” said Glenn Chamandy, Gildan’s chief executive officer, on a third-quarter earnings call.
The macroeconomic environment has changed rapidly since the company last reported quarterly results, he added.
The company, which keeps its books in U.S. dollars, lowered its full financial year outlook and now expects revenue in the range of $5.4 billion to $5.5 billion, down from previous guidance for the low end of $6 billion to $6.2 billion.
Adjusted diluted earnings per share are now expected in a range of $3.70 to $3.80, compared with earlier guidance for $4.65 to $4.75.
Chamandy said affordability concerns are hurting consumer sentiment.
“The consumer is basically under pressure,” he said. “Obviously, higher interest rates, higher oil costs, higher food costs, et cetera, those are things that are not in our control.”
It’s leading to less discretionary spending. For instance, he said: “You go to a rock concert, you can’t even afford a ticket. You don’t buy the T-shirt because it’s a last resort.”
Meanwhile, the cost of materials and production — cotton, polyester, dyes, chemicals, energy, transportation and labour — have gone up, Chamandy said.
“When you look at the price of diesel, even though oil was trading at $100 a barrel, diesel is trading in the equivalent of $200 a barrel,” he said.
“There are underlying inflationary factors that I think will continue to pull up price, unless there’s a reversal of oil and interest rates as we go forward.”
Chamandy said there’s room for price increases to deal with higher costs.
Gildan also withdrew its three-year targets for 2026 to 2028, which had laid out expectations for annual net sales to grow three-to-five per cent, among others.
“Prior to the results, the market had expected macro pressures to weigh on demand,” Chris Li, a Desjardins analyst, said in a note Thursday.
“It appears that the rapid changes in macroeconomic conditions (rising interest rates and persistent inflation) have been much more severe than anticipated and are weighing on consumer demand for apparel.”
The Montreal-based clothing company earned US$259.4 million or US$1.40 per diluted share for its third quarter compared with a profit of US$120.2 million or 80 cents US per diluted share a year ago.
Net sales for the quarter totalled US$1.47 billion, up from US$910.6 million in the third quarter of 2025.
On an adjusted basis, it earned US$1.54 per diluted share from continuing operations in its latest quarter, up from an adjusted profit of $1.00 per diluted share a year ago.
This report by The Canadian Press was first published Nov. 5, 2026.
Companies in this story: (TSX: GIL)
