Shein posts $99m loss ahead of Hong Kong IPO

Online fashion retailer Shein has reported a $99 million loss for the first quarter of 2026, highlighting the growing

Online fashion retailer Shein has reported a $99 million loss for the first quarter of 2026, highlighting the growing impact of higher import costs, weaker US sales and increased regulatory pressure.

The company had recorded a $395 million profit during the same period a year earlier. Its latest financial disclosure comes as Shein prepares for a planned listing in Hong Kong.

The company has not yet revealed the size of the initial public offering, expected share price, listing date or the amount it hopes to raise. However, the filing provides investors with a clearer picture of the challenges facing the fast-fashion giant ahead of its potential market debut.

A major factor behind the weaker performance is the removal of a US duty exemption for low-value packages. The previous system allowed goods worth less than $800 to enter the country without import duties.

Shein said the change has negatively affected its US sales and overall growth while increasing operating expenses. Products of Chinese origin sold through the company and shipped to the US are now subject to taxes ranging from 10% to 87.5%, according to the filing.

The company said it is considering several measures to manage the higher costs, including raising prices for American customers.

Shein’s US revenue fell 14.3% to $2.04 billion in the first quarter, compared with $2.38 billion a year earlier. The US remains one of its most important markets, although its contribution to total revenue has declined.

The company is also facing additional pressure in Europe. The European Union has introduced a €3 charge on low-value e-commerce imports, a move aimed at addressing concerns over competition from low-cost overseas sellers.

Shein warned that the European market could experience an impact similar to, or greater than, the one seen in the US following the removal of the duty exemption.

The retailer’s financial performance had already weakened in 2025. Its annual revenue increased by 8% to $41.85 billion, but net income dropped nearly 39% to $2.06 billion. Growth also slowed significantly compared with the previous year.

Part of the latest quarterly loss was linked to a $328 million accounting charge related to the changing value of convertible preferred shares held by investors.

Shein has also faced growing scrutiny over labour practices, environmental concerns and the impact of its business model. The company has defended its policies and said it maintains strict standards against labour abuses within its supply chain.

Shein received approval from Chinese regulators for its Hong Kong listing in July, clearing an important hurdle after earlier efforts to pursue listings in New York and London did not materialise.