Shares of fast-fashion platform Shein fall 4% after quarterly profit slides 67%

On September 29, Shein, the fast-fashion platform, saw its shares fall by more than 6% after reporting a 67% decrease in quarterly profit, raising concerns among investors about margin pressure and slowing growth. Jefferies analysts estimated that the earnings were more than 10% below the low end of the range suggested by Shein's prospectus.

The adjusted net profit for the second quarter was $228 million, and the margin dropped to just 2.1% from 6.2% the previous year due to increased jet fuel and freight costs resulting from the conflict in the Middle East. Since its initial public offering on September 1 in Hong Kong, Shein's shares have declined by 27.3% from the offer price of HK$48.56 ($6.19), trading around HK$33.40 on Tuesday.

On Monday, Shein CEO and Chair Yangtian Xu stated that increasing inventory in Europe was a key priority, and the company plans to expand into higher-priced clothes to improve profitability.