In brief
Shein announced a $99m loss in Q1 2026, the first such loss in its history, as U.S. President Donald Trump revoked the de‑minimis tariff exemption for small imports. The removal of the $800 exemption sharply reduced sales in the United States, the company’s key market. Shein’s filing also noted wars affecting demand, rising costs and delivery delays, and a paper loss from accounting changes. Although sales declined, the company’s active customer base grew 16% to 281 million, totaling over one billion orders. The firm is preparing for a Hong Kong initial public offering amid ongoing uncertainty in U.S.–China tariff negotiations.
Shein says it swung to a quarterly loss as its sales slowed after US President Donald Trump removed an import duty exemption on small packages.
It also comes as uncertainty remains over the tit‑for‑tat US‑China tariffs wars, which is currently paused.
The fast‑fashion giant, headquartered in Singapore but founded in China, said it lost $99m (£74.1m) in the first three months of the year, compared with a net income of $395m a year earlier.
The filing is part of the firm’s preparations ahead of its stock market debut in Hong Kong, although the filing did not give details on the size, timetable or pricing of the planned initial public offering (IPO).
"In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the US market to offset a portion of the increased costs," Shein said in the filing.
The company also said that the Iran war had hit demand, increased costs and caused delays of deliveries in some markets.
The first‑quarter figures also partly reflected a paper loss of $328m due to an accounting change for special investor shares. The shares can be turned into ordinary stock later, and their value can change before a listing.
Shein had 281 million active customers – a rise of more than 16% on a year earlier – who placed a total of more than one billion orders in the year to the end of March 2026.
On 10 July, the China Securities Regulatory Commission (CSRC) gave Shein approval for a Hong Kong share sale after failed attempts to list in New York and London.
The Hong Kong share listing is expected to take place in the coming months.
The figures show the impact of a Trump‑signed executive order to end a global tariff exemption that had been used by US shoppers of low‑cost goods.
That order, which came into effect on 29 August 2025, broadened an earlier presidential action which specifically targeted cheap products from China and Hong Kong to cover the rest of the world.
The so‑called de‑minimis exemption allowed goods valued at $800 or less to enter the US without paying any tariffs. US consumers relied on the exemption to buy cheap goods from online commerce sites like Shein and Temu.
The White House said the global exemption was being used to "evade tariffs and funnel deadly synthetic opioids" to the US.
"The removal of the US de‑minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues," Shein said in the filing.
Earlier in July, the European Union imposed a €3 (£2.56; $3.42) levy on low‑value e‑commerce imports. The measure is aimed to curb what the trading bloc has said is unfair competition from China.
