Shein has announced a significant swing to quarterly losses, with the company reporting a $99 million loss in the first quarter compared to a $395 million profit in the same period the prior year. The shift reflects challenges stemming from policy changes and global tensions affecting the e-commerce platform’s business operations.
A major factor in the company’s financial deterioration relates to the removal of a tariff exemption for small-value packages entering the United States. An executive order eliminated the de minimis exemption, which had previously allowed goods valued at $800 or less to enter the country duty-free. The policy change, implemented in late August 2025, expanded beyond an earlier measure targeting Chinese and Hong Kong products to encompass goods from all countries. The company stated that this tariff removal has adversely affected its American market sales and overall revenue growth. In response, Shein indicated it is considering various measures, including raising prices in the US market to help absorb the increased costs.
Beyond tariff-related pressures, Shein cited the impact of Middle Eastern geopolitical tensions on demand and supply chains across certain markets, which increased operational costs and caused delivery delays. Additionally, the company’s quarterly figures included a $328 million paper loss resulting from an accounting adjustment related to special investor shares that may be converted into ordinary stock.
Despite these challenges, Shein’s customer base grew substantially, with the company reporting 281 million active customers as of late March 2026, representing a 16 percent increase year-over-year. These customers placed over one billion orders during the period. The company is advancing toward a Hong Kong initial public offering, having received regulatory approval in July after unsuccessful listing attempts in New York and London. The Hong Kong share sale is expected to proceed in the coming months, though specific details regarding timing, size, and pricing remain undisclosed.
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