Shein swings to $99m loss as Donald Trump's tariffs hit sales
Shein reported a $99 million loss for the first quarter of 2026, marking a sharp decline from the $395 million profit recorded during the same period last year. The company cited several headwinds contributing to this financial shift, with the removal of US import duty exemptions at the forefront of the challenges.
President Donald Trump signed an executive order ending the de minimis exemption, which previously allowed goods valued at $800 or less to enter the United States without tariffs. Shein noted that this change has negatively impacted sales and total revenue growth, forcing the company to consider raising prices for American consumers to cover the added costs.
Beyond US tariff policies, Shein faces operational friction from the conflict in Iran, which has increased shipping costs and caused delivery delays in certain regions. The reported figures also include a $328 million paper loss linked to an accounting adjustment for special investor shares, a detail relevant to their upcoming financial restructuring.
Despite these hurdles, the company continues to scale its customer base, reaching 281 million active shoppers by the end of March 2026, a 16% increase year-over-year. The firm is currently moving forward with plans for an initial public offering in Hong Kong, having recently secured approval from the China Securities Regulatory Commission after previous attempts to list in New York and London did not materialize.
This transition to a public entity comes as global trade regulations tighten. The European Union recently introduced its own levy on low-value e-commerce imports to address concerns regarding competition from Chinese platforms. Investors and analysts are monitoring the situation as Shein prepares for its stock market debut in the coming months.