Shein said it swung to a quarterly loss as sales slowed after US President Donald Trump removed an import duty exemption on small packages. The fast-fashion giant, which is headquartered in Singapore but was founded in China, reported a loss of $99m (£74.1m) in the first three months of the year, compared with net income of $395m a year earlier.
The results also come as uncertainty remains over the tit-for-tat US-China tariff war, which is currently paused. The announcement is part of the company’s preparations for a stock market debut in Hong Kong, although the filing did not give any details on the size, timetable or pricing of the planned initial public offering (IPO).
How is Shein responding to higher duties and taxes?
Shein said it is considering a range of options, including raising prices in the US market to offset part of the higher costs.
“In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the US market to offset a portion of the increased costs,”the company said in the filing.
The company also said the Iran war had hit demand, increased costs and caused delays to deliveries in some markets.
What else affected the first-quarter figures?
The first-quarter figures also partly reflected a paper loss of $328m due to an accounting change for special investor shares. The shares can be turned into ordinary stock later, and their value can change before a listing.
The filing showed that in the year to the end of March 2026, Shein had 281 million active customers, up by more than 16% on a year earlier, and those customers placed more than one billion orders in total.
What is happening with Shein’s Hong Kong listing?
On 10 July, the China Securities Regulatory Commission (CSRC) gave Shein approval for a Hong Kong share sale after failed attempts to list in New York and London. The Hong Kong share listing is expected to take place in the coming months.
Why did the US remove the de minimis exemption?
The figures show the impact of a Trump-signed executive order to end a global tariff exemption that had been used by US shoppers of low-cost goods. That order, which came into effect on 29 August 2025, broadened an earlier presidential action which specifically targeted cheap products from China and Hong Kong to cover the rest of the world.
The so-called de minimis exemption had allowed goods valued at $800 or less to enter the US without paying any tariffs. US consumers relied on the exemption to buy cheap goods from online commerce sites like Shein and Temu.
The White House said the global exemption was being used to
“evade tariffs and funnel deadly synthetic opioids”to the US.
“The removal of the US de minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues,”Shein said in the filing.
What other trade measures are affecting low-value imports?
Earlier in July, the European Union imposed a €3 (£2.56; $3.42) levy on low-value e-commerce imports. The measure is aimed to curb what the trading bloc has said is unfair competition from China.
Key Facts
- Shein reported a quarterly loss of $99m (£74.1m) versus net income of $395m a year earlier.
- The company said the removal of the US de minimis exemption hurt its US sales and net revenue growth.
- Shein had 281 million active customers in the year to the end of March 2026, up more than 16% year on year.
- On 10 July, China’s CSRC approved Shein’s Hong Kong share sale after failed attempts to list in New York and London.
- The company said the Iran war had hit demand, increased costs and delayed deliveries in some markets.
