Shein Faces First Public Earnings Test as Growth Woes Mount

Guangzhou – Shein Global Holdings is set to release its first earnings as a publicly traded company this week, with investors closely monitoring the company's ability to rebound after a 28% drop since its listing. The board will meet on September 28 to discuss the first-half results, but investors are more interested in clues about the third quarter, which analysts believe will show further weakness. This makes management's outlook crucial.

Shein's debut on Hong Kong's stock market occurred less than a month ago, after years of delays and a valuation of roughly US$26 billion (S$33 billion), down from its 2022 peak of approximately US$100 billion. Third-party data, as well as interviews with suppliers and analyst estimates, suggest conditions have worsened during the third quarter, including lower US sales and declining web traffic worldwide.

This could put pressure on Shein to accelerate the growth of its new businesses in order to offset declining conditions in its core ultra-fast fashion operation.

Shen Meng, a director at Beijing-based investment bank Chanson & Co., stated that without a clear strategy to address growth concerns in the short term, the company's long-term decline may be difficult to reverse. Shein's US sales fell more than 10% in the three months through August and early September, according to Bloomberg Second Measure, which analyzes credit and debit card transactions.

This rate of contraction was steeper than the single-digit decline in the broader specialty online retail category. Moreover, Shein's sales have lagged behind the apparel industry in the country since late 2025. Rivals such as PDD Holdings's Temu and Amazon.com have reported single- to double-digit growth since April.

Two core suppliers in China informed Bloomberg that their orders from Shein have declined by roughly 20% during the third quarter, with the decline worsening in August and September. Shein did not immediately respond to a request for comment on the matter. Other indicators point to growing difficulty in attracting and retaining shoppers.

Shein's global web traffic declined from the previous year in August, marking its first contraction since late 2024, according to Similarweb. Additionally, time spent on Shein decreased by more than 10% in July and August, while app downloads plunged more than 40% in August, as reported by Apptopia. Some of the weakness may be attributed to a broader pullback in e-commerce.

The two suppliers mentioned that their business with Temu has also weakened, and Temu's global web traffic has declined since March. Temu did not immediately respond to a request for comment.

Regulatory and cost pressures are further exacerbating Shein's challenges. In France, new fees on ultra-fast-fashion items have been in effect since September 1, and the European Union, a key market, eliminated its de minimis customs duty exemption in July. Analysts Catherine Lim and Jason Zhu from Bloomberg Intelligence foresee Shein's revenue growth slowing to around 2.5% in 2026 and adjusted operating profit falling by more than 19%, as higher oil and freight costs due to the Iran war put additional strain on margins.

The main concern, however, is whether the deterioration will continue. For them, third-quarter sales will be the decisive test.