Shein reported a $99 million net loss for the first quarter of 2026 after higher US import duties slowed sales in its largest market. The Singapore-headquartered online retailer recorded net income of $395 million during the same period a year earlier.
The figures were disclosed in Shein’s draft prospectus for a planned Hong Kong initial public offering. The filing did not provide the expected size, pricing or timetable for the listing.
US Revenue Falls After Tariff Change
Shein said the removal of the US de minimis exemption had negatively affected American sales and overall revenue growth. US revenue fell 14.3% from a year earlier, while its operating margin declined from 3.9% to 2.9%.
The exemption previously allowed packages worth $800 or less to enter the United States without import duties. President Donald Trump first ended the treatment for shipments from China and Hong Kong before signing an executive order suspending it globally from August 29, 2025.
The White House said the exemption had been used to avoid tariffs and ship synthetic opioids and other unsafe products into the country. Shein said it is considering several responses to the higher costs, including increasing prices for US customers.
Accounting Change Adds to Loss
The quarterly result included a $328 million paper loss caused by an accounting change involving preferred shares held by investors. These shares can later be converted into ordinary stock, causing their reported value to change before a listing.
For the full 2025 financial year, Shein’s revenue rose 8% to $41.85 billion. Net income fell 38.7% to $2.06 billion as growth slowed and regulatory costs increased.
The company had 281 million active customers during the year ending March 2026, an increase of more than 16%. Those customers placed over one billion orders.
Hong Kong IPO Moves Forward
China’s securities regulator approved Shein’s proposed Hong Kong listing on July 10 after its earlier attempts to list in New York and London stalled. The company could seek to raise between $2 billion and $3 billion, although its filing did not confirm a fundraising target.
Shein also faces additional costs in Europe. The European Union introduced a temporary €3 customs duty on each item in low-value e-commerce consignments from July 1, 2026. The measure applies to imports worth up to €150 and is scheduled to remain in place until July 2028.
Shein said geopolitical conflict had also weakened demand, increased costs and delayed deliveries in some markets. Its Hong Kong listing remains subject to further regulatory and market approvals.
Featured image credits: Flickr
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