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Zoe SL Chan

E-commerce giant Shein swung back to losses in the first quarter of 2026 as rising Western tariffs squeezed margins, according to its Hong Kong listing prospectus on Sunday.
The Singapore-headquartered fast-fashion retailer, founded in China, recorded a US$99 million loss in the three months to March, reversing a US$395 million profit a year earlier. Net revenue edged up 1.1 per cent to US$9.05 billion in the same period.
For full-year 2025, Shein’s net revenue rose nearly 8 per cent to US$41.85 billion, while net profit slumped 38.7 per cent to US$2 billion.
The filing showed Shein was facing multiple risks in 2026, warning that net revenue, operating profit and net profit were being pressured by tariffs, potential pricing pressures, weaker regional demand and higher logistics and material costs.
The Iran war has hit consumer demand in the Middle East, with regional activity down year on year and expected to dent 2026 net revenue.
The European Union, accounting for about a third of Shein’s net revenue in 2025 and the first quarter of 2026, imposed a €3 (US$3.42) fee on low-value e-commerce imports this month, raising selling costs and likely hurting short-term volumes, Shein said.
In the US, the termination of the de minimis exemption and other tariff hikes since May 2025 sharply raised tax costs, with negative impacts on US net revenue observed for the rest of 2025, it added.
Mainland Chinese goods bought from Shein and shipped to the US now face tariffs ranging from 10 per cent to 87.5 per cent.
The company passed its Hong Kong stock exchange listing hearing, clearing the way for an initial public offering (IPO) after earlier attempts in New York and London failed. The China Securities Regulatory Commission approved the deal on July 10. Goldman Sachs, JPMorgan and Morgan Stanley are joint sponsors.
Shein did not disclose the offering size, pricing, timetable, or expected proceeds in the pre-IPO prospectus.
It adopts a dual-class share structure where class A shares carry 10 votes each and class B shares carry one vote.
Its four co-founders hold a combined 65 per cent of voting rights, with chairman Sky Xu as the largest shareholder.
Shein said it planned to adopt a dividend policy targeting an annual payout of at least 50 per cent of net profit after deducting major capital expenditures.


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Tariffs, war and rising costs squeeze company’s margins as IPO looms, testing investor appetite for fast-fashion


Tariffs, war and rising costs squeeze company’s margins as IPO looms, testing investor appetite for fast-fashion.


Fast-fashion giant Shein swings to US$99m first-quarter loss ahead of Hong Kong listing

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Tariffs, war and rising costs squeeze company’s margins as IPO looms, testing investor appetite for fast-fashion

Tariffs, war and rising costs squeeze company’s margins as IPO looms, testing investor appetite for fast-fashion