In brief
Shein disclosed its first‑quarter loss of $99 m, a sharp decline from a $395 m net profit a year earlier, as Donald Trump’s removal of the de‑minimis duty exemption hit U.S. sales. The company blamed higher duties, increased taxes, and delivery delays for the downturn, while noting a paper loss from an accounting change. Despite the slump, Shein’s active customers rose 16% to 281 million, and it remains on track for a Hong Kong IPO. The filing also highlighted the impact of U.S. and EU tariff actions on low‑value e‑commerce imports.
Shein, the fast‑fashion retailer that traces its roots to China but is now headquartered in Singapore, announced a net loss of $99 million in the first quarter of 2026, a dramatic fall from the $395 million net income it recorded in the same period last year.
The downturn is largely blamed on the removal of the U.S. “de‑minimis” duty exemption by President Donald Trump – a tax relief that had allowed items worth up to $800 to enter the United States without tariffs. With the exemption gone, the cost of importing Shein’s inexpensive clothing from China and Hong Kong has risen, leading to lower U.S. sales.
Shein said it is exploring options such as raising prices in the U.S. market to offset the higher duties and it also cited the war in Iran, increased costs, and delivery delays in some markets as contributing factors to the weak performance.
The quarterly figures also factored in a paper loss of $328 million stemming from a change in accounting for special investor shares – assets that may be converted into ordinary shares at a later date and whose value can fluctuate ahead of a public listing.
Shein reported that it now counts 281 million active customers worldwide, a rise of more than 16% year‑on‑year, who placed over a billion orders across the year ending in March 2026.
The company’s filings also confirm the imminent Hong Kong share sale, following approval from the China Securities Regulatory Commission on 10 July. The listing is expected in the coming months after earlier failed attempts to list in New York and London.
Shein’s loss occurred amid renewed uncertainty over the paused US‑China tariff spiral, while the U.S. order, effective 29 August 2025, aimed to curb the use of the de‑minimis exemption for low‑cost goods and was said to target the “evade tariffs” funneling into the U.S.
In July, the European Union imposed a €3 (about $3.42) levy on low‑value e‑commerce imports in a move that the EU says is designed to curb what it calls unfair competition from China.
