Montreal-based Gildan Activewear saw its stock price tumble 25% on the Toronto Stock Exchange this Thursday.. The sudden sell-off followed a third-quarter earnings report that, while showing sales growth, included a drastic reduction in the company's annual revenue and profit forecasts.
The paradox of $1.47 billion in quarterly net sales
On paper, Gildan Activewear’s third-quarter performance appeared robust. The manufacturer reported net sales of US$1.47 billion , which represents a substantial jump from the US$910.6 million reported during the third quarter of 2025. As the report notes, the company’s net income reached US$259.4 million, or US$1.40 per diluted share, showing a notable improvement over the US$120.2 million profit recorded during the same period a year ago.
Furthermore, the company's adjusted earnings per share from continuing operations reached US$1.54 for the latest quarter. This figure compares favorably to the adjusted profit of US$1.00 per diluted share seen in the previous year, suggesting that the company has been able to improve its operational efficiency in the short term.
A massive $600 million downward revision in revenue
The market's decision to punish the stock was not a reaction to the third quarter itself, but to the company's revised outlook for the remainder of the year.. Gildan Activewear significantly slashed its full-year revenue guidance, moving from an expected range of US$6 billion to US$6.2 billion down to a much more modest US$5.4 billion to US$5.5 billion. This discrepancy suggests that the momentum seen in the third quarter may not be sustainable through the end of the fiscal year.
This downward revision indicates that the company is bracing for a much tighter financial environment than analysts had previously anticipated. The significant gap between the previous projections and the new guidance has introduced a level of uncertainty regarding the company's ability to maintain its growth trajectory.
The C$15.32 slide on the Toronto Stock Exchange
The immediate financial fallout was visible on the TSX, where Gildan Activewear (TSX:GIL) shares plummeted 25 percent. The stock price fell by C$15.32, settling at C$45.12 during mid-morning trading on Thursday. This sharp decline highlights how sensitive investors are to guidance cuts, even when current quarterly earnings per share show operational gains.
According to the source, the stock's reaction underscors the market's sensitivity to downward revisions in long-term outlooks. while the quarterly results showed resilience, the market is clearly prioritizing the company's future profitability and operational stability over its recent sales success.
The $1.00 gap in projected earnings per share
While the quarterly numbers showed resilience, the company’s full-year adjusted diluted earnings per share (EPS) guidance was cut from a high of US$4.75 to a range of just US$3.70 to US$3.80. This leaves several critical questions unanswered for investors. specifically, the source does not clarify whether the company is facing unexpected cost pressures, a sudden cooling in apparel demand, or deeper structural issues within the manufacturing sector.
Because the report only provides the revised figures without detailing the underlying causes, it remains unclear if these headwinds are temporary or indicative of a long-term trend. Analysts will likely be looking for more transparency regarding the specific factors driving this significant divergence between quarterly performance and annual projections.
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