Shein Reports $99 Million Quarterly Loss as Tariff Changes Weigh on Sales
Fast-fashion retailer Shein reported a net loss of $99 million for the first quarter of the year, marking a sharp reversal from the $395 million profit it recorded during the same period last year. The company attributed the weaker performance to slower sales, higher operating costs, and changes to U.S. import policies.
The Singapore-headquartered company, which was founded in China, disclosed the financial results as part of preparations for its planned Hong Kong initial public offering (IPO). However, the filing did not reveal details regarding the size, pricing, or expected timeline of the share sale.
Tariff Changes Hit Sales
Shein said its business was affected after U.S. President Donald Trump removed an import duty exemption that had previously applied to many low-value packages entering the United States.
The company noted that the policy change increased import costs and prompted it to consider raising product prices in the U.S. market to offset part of the additional expenses.
Shein also continues to navigate uncertainty surrounding U.S.-China trade relations, with tariff disputes remaining a key challenge for global retailers despite the current pause in further escalation.
Geopolitical Tensions Added Pressure
In addition to tariff-related challenges, Shein said conflict involving Iran disrupted parts of its business by reducing consumer demand, increasing logistics costs, and delaying deliveries in certain international markets.
These factors added further pressure on the retailer's operations during the quarter.
Accounting Adjustment Also Affected Results
The company said its quarterly results included a paper loss of $328 million related to an accounting adjustment involving special investor shares.
According to the filing, these shares can later be converted into ordinary stock, and their value may fluctuate before the company completes its planned public listing.
Shein emphasized that the accounting adjustment does not reflect its day-to-day operating performance.
IPO Plans Continue
Despite the weaker quarterly results, Shein continues preparations for its planned listing in Hong Kong, one of the most anticipated IPOs in the global retail sector.
Investors will be closely watching future earnings as the company works to manage higher costs, changing trade policies, and evolving consumer demand ahead of its market debut.