Gildan Activewear's revenue dip seen as temporary; operating income and margins beat expectations.

Gildan Activewear reported a 9.9% drop in first-quarter 2026 revenue due to strategic production shifts and a strong prior-year base, but operating income rose 23.1% year-over-year with better-than-expected EBIT margins. The company’s focus on high-priced products and effective hedging contributed to profitability gains. Additionally, the planned sale of its Hanesbrands Australian unit is progressing, potentially enabling debt reduction and share buybacks. Investors are advised to look beyond the temporary revenue weakness and consider the company’s improving profitability and strategic moves as positive signs.