Fast-fashion retailer Shein reported a $99 million net loss in the first quarter of 2026, reversing a $395 million profit recorded a year earlier, as higher U.S. import tariffs and slowing sales weighed on its financial performance ahead of its planned Hong Kong stock market listing.
The company disclosed the results in a regulatory filing released as part of its preparations for an initial public offering (IPO) in Hong Kong. The filing did not specify the size, pricing, or timing of the share sale.
Shein said the removal of the U.S. de minimis tariff exemption had negatively affected its American business, forcing the company to consider price increases to offset rising import costs.
"In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the U.S. market to offset a portion of the increased costs," the company said in the filing.
The retailer also cited geopolitical tensions in the Middle East, including the conflict involving Iran, as factors that disrupted consumer demand, increased operating costs, and delayed deliveries in several markets.
Part of the quarterly loss reflected a $328 million non-cash accounting adjustment related to special investor shares that can later be converted into ordinary shares before the company's public listing.
Despite the weaker earnings, Shein continued to expand its customer base. The filing showed the company had 281 million active customers during the 12 months ended March 2026, an increase of more than 16% from the previous year. Customers placed more than one billion orders over the period.
Earlier this month, China's Securities Regulatory Commission (CSRC) approved Shein's proposed Hong Kong listing after the company was unable to proceed with planned IPOs in New York and London.
The Hong Kong listing is expected to take place in the coming months, subject to regulatory approvals and market conditions.
Shein's results also highlighted the impact of U.S. trade policy changes introduced under President Donald Trump. In August 2025, the administration eliminated the global de minimis exemption, which had previously allowed imported goods valued at $800 or less to enter the United States without import duties.
The exemption had been widely used by online retailers such as Shein and Temu to ship low-cost products directly to U.S. consumers.
"The removal of the U.S. de minimis exemption has had an adverse impact on our sales in the U.S. and the overall growth of our net revenues," the company said.
Separately, the European Union introduced a €3 levy on low-value e-commerce imports earlier this month as part of efforts to address what it described as unfair competition from Chinese online retailers.
Investors will closely watch Shein's upcoming Hong Kong IPO as the company navigates higher trade barriers, regulatory scrutiny, and slowing growth in one of its largest markets.
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