Gildan Activewear (GIL) AI Stock Analysis

• Market Cap: C$14.24B
• Dividend Yield: 1.47%
• Average Volume (3M): 610.74K
• Price to Earnings (P/E): 23.6
• Beta (1Y): 1.07
• Revenue Growth: 6.64%
• EPS Growth: 27.37%
• Country: CA
• Employees: 50,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 1.32
• Shares Outstanding: 185,175,220
• 10 Day Avg. Volume: 685,917
• 30 Day Avg. Volume: 610,737
• PEG Ratio: 3.05
• Price to Book (P/B): 2.69
• Price to Sales (P/S): 2.60
• P/FCF Ratio: 20.03
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$107.00
• Price Target Upside: 39.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 4.34
• Revenue Forecast (FY): C$6.21B

• Rating: 64 Neutral
• Price Target: C$82.00 ▲(6.63% Upside)
• Action: Downgraded Date: 03/01/26
• Date: Action: Downgraded 03/01/26

The score is driven primarily by solid operating profitability and free cash flow, partially offset by increased leverage and weaker debt coverage. Technical indicators are mixed with near-term softness despite a longer-term uptrend. Valuation is somewhat demanding (P/E ~25.5) with a modest dividend, while earnings-call guidance and margin/FCF outlook are a positive support despite category and expense headwinds.

Positive Factors

Vertical integration

Gildan's end-to-end manufacturing footprint gives durable cost, quality and supply-chain control. Ownership of key production steps supports margin resilience versus pure outsourcing, creates scale advantages, and reduces disruption risk—benefits that persist over multiple quarters and support consistent unit economics.

Strong free cash flow

Material FCF growth provides lasting financial flexibility: it funds capex (~4% of sales guidance), dividends, and strategic moves like acquisitions while supporting deleveraging over time. Reliable cash conversion strengthens investment capacity and cushions earnings volatility across cycles.

Operating profitability & margin improvement

Sustained gross- and operating-margin expansion reflects durable pricing, favorable mix toward activewear, and operational efficiency. Record adjusted EPS and management's guidance for further margin gains indicate structural improvements in margin drivers rather than a one-off, supporting longer-term return on capital.

Negative Factors

Elevated leverage

Material increase in leverage has reduced financial flexibility and elevated interest-rate sensitivity. Higher gearing constrains capital allocation, raises refinancing risk if market conditions tighten, and limits the company's cushion to absorb operational setbacks during the multi-quarter integration of strategic initiatives.

Category and international weakness

Significant declines in core hosiery/underwear demand and a drop in international sales indicate structural headwinds in important channels. Persistent weakness in these segments can depress mix and topline growth, requiring sustained marketing or pricing efforts to restore volumes over the coming quarters.

Rising SG&A and financing costs

Higher SG&A and acquisition-related fees increase the fixed-cost base and reduce operational leverage. Combined with increased borrowing and related finance costs tied to strategic transactions, this can compress net margins and slow net-debt reduction, challenging profitability persistence over multiple quarters.

Gildan Activewear Business Overview & Revenue Model

Company Description

Gildan Activewear Inc. manufactures and sells various apparel products in the United States, North America, Europe, Asia-Pacific, and Latin America. It provides various activewear products, including T-shirts, fleece tops and bottoms, and sports shirts under the Gildan, Gildan Performance, Gildan Hammer, Comfort Colors, American Apparel, Alstyle, and GoldToe brands. The company also offers hosiery products comprising athletic; dress; and casual, liner, therapeutic, and workwear socks, as well as sheer pantyhose, tights, and leggings under the Gildan, Under Armour, GoldToe, PowerSox, Signature Gold by Goldtoe, Peds, MediPeds, Therapy Plus, All Pro, Secret, Silks, Secret Silky, and American Apparel brands. In addition, it provides men's and boys' underwear products, and ladies panties under the Gildan and Gildan Platinum brands; and ladies' shapewear, intimates, and accessories under the Secret and Secret Silky brands. The company sells its products to wholesale distributors, screen printers, and embellishers, as well as to retailers and lifestyle brand companies. The company was formerly known as Textiles Gildan Inc. and changed its name to Gildan Activewear Inc. in March 1995. Gildan Activewear Inc. was founded in 1946 and is headquartered in Montreal, Canada.

How the Company Makes Money

Gildan primarily makes money by manufacturing and selling high-volume basic apparel products at scale, leveraging vertical integration (yarn-spinning, fabric production, cutting/sewing, and finishing in its own facilities) to manage costs, quality, and supply reliability. Revenue is generated mainly from wholesale sales of: (1) activewear products (e.g., T-shirts, fleece, sport shirts) that are frequently purchased as “blanks” by printwear distributors and decorators for custom printing; and (2) underwear and socks sold through mass retail, department, and other retail channels. The company’s earnings are driven by unit volumes, product mix (e.g., higher-margin categories and styles), and manufacturing efficiency, with profitability influenced by input costs (notably cotton and other raw materials), energy and labor costs, and freight/logistics. Gildan also benefits from brand and licensing-related programs where applicable; specific named partnerships or financial terms not provided in this prompt are null.

Gildan Activewear Financial Statement Overview

Summary

Profitability and cash generation are solid (healthy gross/net margins and strong free cash flow growth), but the balance sheet is a major constraint: leverage increased materially (debt-to-equity ~1.37 in 2025) and cash flow covers a relatively small share of total debt (~0.26), reducing financial flexibility.

Income Statement

Revenue has grown steadily since 2023, accelerating to about 9.9% in 2025, while profitability remains solid with ~30% gross margin and ~11% net margin in 2025. Operating profitability also looks healthy (EBIT margin ~19.8% and EBITDA margin ~24.1% in 2025). Offsetting this, margins have compressed versus the 2021 peak and net income was essentially flat from 2024 to 2025 despite higher sales, indicating some cost pressure or mix headwinds. The 2020 loss remains a historical blemish, though results have since normalized.

Balance Sheet

Leverage is the key constraint: debt-to-equity rose to ~1.37 in 2025 from ~0.55 in 2023, and total debt increased sharply versus prior years. Equity has grown, but the balance sheet is meaningfully more levered than it was in 2021–2023. Return on equity is positive (~11.4% in 2025), but it is well below the ~27–32% range seen in 2021–2024, suggesting weaker efficiency/earnings power relative to the capital base and/or the impact of higher leverage and asset growth.

Cash Flow

Cash generation is a clear positive: operating cash flow and free cash flow are both solid in 2025, with free cash flow up strongly (about 31.6% growth). Free cash flow covered a large portion of earnings in 2025 (about 0.82x), supporting earnings quality. The main concern is that cash flow covered a relatively small share of total debt in 2025 (coverage ratio ~0.26), which reduces flexibility if refinancing conditions tighten or if profitability softens.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.68B	3.27B	3.20B	3.24B	2.92B
Gross Profit	1.11B	1.00B	880.05M	992.41M	940.21M
EBITDA	887.67M	737.74M	743.03M	720.12M	777.69M
Net Income	405.86M	400.87M	533.58M	541.54M	607.18M
Balance Sheet
Total Assets	10.45B	3.72B	3.51B	3.44B	3.14B
Cash, Cash Equivalents and Short-Term Investments	283.94M	98.80M	134.78M	198.69M	249.24M
Total Debt	4.87B	1.65B	1.08B	1.02B	723.18M
Total Liabilities	6.89B	2.26B	1.56B	1.56B	1.22B
Stockholders Equity	3.56B	1.46B	1.96B	1.88B	1.92B
Cash Flow
Free Cash Flow	477.24M	351.04M	338.60M	168.93M	487.29M
Operating Cash Flow	585.54M	501.39M	546.61M	413.49M	617.51M
Investing Cash Flow	-240.13M	-112.12M	-154.86M	-182.40M	-187.83M
Financing Cash Flow	-148.78M	-379.35M	-452.78M	-258.27M	-754.75M

Gildan Activewear Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 76.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GIL, the sentiment is Negative. The current price of 76.9 is below the 20-day moving average (MA) of 86.61, below the 50-day MA of 89.96, and below the 200-day MA of 79.71, indicating a bearish trend. The MACD of -4.01 indicates Positive momentum. The RSI at 20.23 is Positive, neither overbought nor oversold. The STOCH value of 6.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:GIL.

Gildan Activewear Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCL.A	77 Outperform	C$14.49B	18.88	14.55%	1.44%	7.12%	17.15%
CCL.B	73 Outperform	C$14.49B	18.88	14.55%	1.46%	7.12%	17.15%
ATZ	71 Outperform	C$12.39B	23.21	29.12%	―	26.51%	172.52%
GIL	64 Neutral	C$14.24B	23.55	20.31%	1.47%	6.64%	27.37%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
GOOS	57 Neutral	C$1.44B	3.20	4.23%	―	3.78%	-54.87%
ROOT	54 Neutral	C$136.46M	14.11	-21.42%	―	4.87%	-1195.39%