Shein Reports Quarterly Loss Ahead of Hong Kong Listing

Fashion retailer Shein announced a net loss of $99 million for the quarter ended 31 March 2026, compared with a $395 million profit for the same period a year earlier, according to financial filings released prior to its planned Hong Kong listing.

The loss was largely driven by a $328 million fair‑value write‑down of convertible redeemable preferred shares.

The filing is part of Shein’s Hong Kong listing documents. Several offer details, including share quantity, pricing and portions of the timetable, remain redacted.

The China Securities Regulatory Commission approved the listing on 10 July, after earlier attempts to go public in New York and London were shelved.

The filing cites the removal of the U.S. “de minimis” exemption in May 2025 as a significant factor affecting the business. The exemption had allowed shipments valued under $800 to enter the United States from China without tariff advantages, subject to applicable rules.

The exemption’s elimination has, the company noted, “adversely impacted U.S. sales and overall revenue growth,” and has increased fulfillment costs as a proportion of revenue.

Goods of Chinese origin purchased from Shein or via its marketplace and shipped to the U.S. now face duty rates ranging from 10 % to 87.5 %.

“In response to the increased duties and taxes, we are exploring a range of options, including adjusting U.S. pricing to partially offset the higher costs,” the company said in the filing.

In the first quarter, Shein’s U.S. revenue declined 14.3 % year‑on‑year to $2.04 bn from $2.38 bn Grammarly

U.S. sales represented 22.5 % of total revenue for the March 2026 quarter.

Europe contributed roughly one third of Shein’s revenue last year.

The filing noted that goods shipped to Europe, which previously benefited from the EU’s €150 ($171.21) low‑value import duty exemption, now face higher costs following the EU’s €3 fee imposed on low‑value e‑commerce imports this month.

Regarding the potential impact in Europe, the company said, “Although it is too early to fully assess, we anticipate that trends could be comparable to or exceed the effect observed in the U.S. after the removal of the de‑minimis exemption.”

For the full 2025 financial year, Shein’s net income fell 38.7 % to $2.06 bn, while revenue rose 8 % to $41.84 bn. The company compared this to 20.7 % growth in 2024. Operating margin was 2.9 % in the first quarter of 2026, down from 3.9 % a year earlier.

Shein stated that proceeds from the listing will be used to enhance technological capabilities, build brand awareness, expand its global footprint, support corporate responsibility initiatives, and fund general corporate purposes.

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