GIL Stock Draws Investor Attention After TD Securities Makes Steep Target Cut On Softening Activewear Demand

TD Securities’ steep target cut on Gildan reflects a macro squeeze, not a company problem — softening activewear demand as rising yields and gas prices pinch consumer spending.

• TD Securities maintained its 'Buy' rating but slashed its target to $54 from $80, according to TheFly.
• Gildan said it expects to receive approximately $220 million in IEEPA tariff refunds in 2026, with most of the refunds expected in the third quarter.
• During the second-quarter earnings release, Gildan trimmed its full-year outlook to the low end of its previously stated $6.0 billion to $6.2 billion range.

Gildan Activewear (GIL) was in focus Thursday after TD Securities sharply lowered its price target on the apparel maker, citing signs of softer demand across the activewear and retail channels. 

TD Securities maintained its 'Buy' rating but slashed its target to $54 from $80, according to TheFly.

GIL shares were down around 12% at the time of writing Thursday.

The analyst said industry demand across the activewear and retail channels appears to have softened since Gildan's second-quarter (Q2) release as bond yields surge and gas prices rise, according to TheFly.

Q2 Results Showed Strong Growth, But Guidance Was Mixed

On July 30, Gildan reported second-quarter net sales from continuing operations of $1.58 billion, up 72.3% year-over-year. Adjusted diluted earnings per share (EPS) came in at $1.28, while adjusted operating margin was 22.3%. The company generated $347 million in operating cash flow and $326 million in free cash flow.

For full-year 2026, Gildan expects revenue at the low end of its previously provided $6.0 billion-$6.2 billion range, with adjusted diluted EPS of $4.65-$4.75 and free cash flow of approximately $1 billion, the company said.

Tariff Refund Adds Another Layer To The Outlook

Gildan said it expects to receive approximately $220 million in IEEPA tariff refunds in 2026, with most of the refunds expected in the third quarter. The company said a significant portion of the benefit is non-recurring, while another sizeable portion is recurring following changes to U.S. tariff policy that removed tariffs on apparel qualifying under CAFTA-DR.

Gildan said the recurring benefit is reflected in its updated 2026 guidance, while the non-recurring portion will be reinvested in initiatives including brand building, retail marketing, product innovation and packaging enhancements.

Wall Street's Q2 Reaction Was Initially Positive

Following the July 30 results, several analysts raised their price targets while maintaining positive ratings. UBS, Stifel, Scotiabank and RBC Capital Markets all lifted their targets, while noting different aspects of the quarter, including earnings, margins, deleveraging and the company's longer-term profitability outlook.

Retail View On GIL

Retail sentiment on Stocktwits turned 'Bullish,' with message volume rated 'High' over the past 24 hours.

GIL shares have fallen more than 35% year-to-date.

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