Stock has fallen nearly 30% since its September Hong Kong listing
Shein Global’s Hong Kong-listed shares fell about 14% to a record low on Tuesday after the fast-fashion retailer posted its first earnings report as a public company, with quarterly profit falling by two-thirds year-over-year. Adjusted net income fell to $228.0 million for the second quarter while revenue rose just 0.9% to $11.08 billion, the China-founded, Singapore-based company said Monday in its earnings release.
The results illustrate the pressures facing Shein as it absorbs the loss of low-value import tariff exemptions in its two largest markets and confronts rising logistics costs. They also extend a rocky start for the company since its September Hong Kong listing, which valued it at roughly a quarter of the nearly $100 billion it once commanded in private markets.
Shein’s U.S. business took a major hit after the government scrapped a tariff exemption for low-value goods imports in 2025, hurting demand for the low-cost fashion that made the company a household name. Revenue in the U.S. dropped 6.0% during the quarter. Sales in Europe have also come under pressure after the European Union eliminated a similar customs duty exemption in July. The EU also launched an inquiry earlier this year over concerns regarding illegal online products and potential user risks from platform design. European revenue slid 14% during the quarter.
The continuing conflict in the Middle East has added another pain point for Shein, disrupting shipping and driving up freight costs. The retailer has said it is pursuing several measures in response, including raising product prices, though it did not specify the magnitude or timing.
Jefferies analysts said the earnings “landed more than 10% below the low end of the range implied by the prospectus.” The downturn in the U.S. was a surprise to Jefferies, whose analysts noted that consensus and management had pinned their hopes on a recovery in the American market.
“The fourth quarter…remains our most significant promotional window and should drive a meaningful uplift in orders,” Shein said in its earnings release. The company said it expects the external environment to remain uncertain in the second half of 2026, but added that conditions could improve in the seasonally stronger final quarter.
The second-quarter figures come after the company’s trading debut showed that investors have yet to be convinced that Shein can overcome its issues. While its initial public offering remains one of Hong Kong’s largest this year, just behind well-established tech names such as Nvidia supplier Zhongji Innolight and Apple supplier Luxshare Precision Industry, the stock has fallen nearly 30% from its IPO price.
Shein has become “one of the most actively debated stocks,” Jefferies analysts said in recent commentary. “Bulls argued its data-driven merchandising, supply-chain capabilities, and speed to market remain structurally differentiated,” they wrote. “Bears questioned whether those advantages are narrowing amid slower growth and rising regulatory pressures.”