Gildan Activewear Inc. (NYSE:GIL) is the largest manufacturer of basic blank activewear. The company produces undecorated T-shirts, fleece, and socks distributed to screen printers, wholesalers, and retail brands. In late 2025, it bought HanesBrands to add scale and household names. The market has hated the deal. On September 24, 2026, the stock fell 12% to $40.63, roughly halved from its high of $73.70. There was no single new shock that day. It means the accumulated worry over the takeover and softening demand has finally caught up with the stock.
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What’s Really Wrong
Two operational challenges are pressuring Gildan. First, merging a giant like HanesBrands is expensive. In addition to the difficulty, the integration costs have curbed the profits. Gildan says operations are tracking toward targeted annual cost savings, but the market wants proof. Second, when Gildan updated investors in July, it pointed to the low end of its revenue range for 2026, a sign that orders are not as strong as hoped. A cyclical apparel business in a cautious spending environment increases the intensity of both these worries.
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The Bull Case
Bulls see Gildan as a low-cost manufacturer that runs its own factories in Central America and the Caribbean. It allows the company to benefit from unit production costs that few competitors can match. Buying HanesBrands adds big brands as well as a chance to sell more through the same low-cost system. Management targets about $250 million in annual savings from the deal over a few years. With the stock cut in half and most analysts still pointing to targets well above today’s price, bulls see a strong operator with a temporary setback based on concerns over a big acquisition.
The Bear Case
The bear thesis believes that the halved stock is rightly priced. Big mergers often do not deliver what they promise. If the company cannot absorb Hanes as planned, it will not be able to achieve its savings target and will be left with a huge debt burden. Apparel is also cyclical and sensitive to tariffs and changes in cotton costs. Meanwhile, soft guidance suggests the demand problem would prevail for some time. Insider Monkey data shows 32 hedge funds held GIL in the second quarter of 2026, down sharply from 42 in the first and implying a loss of institutional interest.
The Bottom Line
The question to ask is whether the market has priced in the Hanes deal too soon or really identified a misstep from Gildan Activewear Inc.. The bulls see a low-cost company with new brands, trading far below where analysts think it belongs. The bears see a difficult merger and soft demand in a cyclical business. The next few earnings reports will show whether the promised savings arrive and demand steadies, to support the stock’s recovery.
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This article is originally published at Insider Monkey.
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