Shein drops 14% to record low after profit misses in first results since Hong Kong IPO

Shein's shares plummeted nearly 14% to a record low in Hong Kong after the fashion e-commerce giant reported a 67% fall in second-quarter profit, disclosing its first earnings after listing. The company warned that tariff headwinds and volatile logistics costs would continue throughout the year. Profit for the June quarter fell to $228 million, while revenue grew by just 1% to $11 billion.

Revenue from Shein's biggest markets, Europe and the United States, dropped by 14% and 6%, respectively, due in part to the removal of customs duty exemptions for low-value goods. In response, Shein raised prices and cut online advertising spending in Europe, according to the filing. Chairman and CEO Xu Yangtian acknowledged the challenging global consumer environment in the first half of 2026, attributing it to macroeconomic uncertainty, geopolitical complexity, and shifting trade policies.

He also said the second half of 2026 would likely see "tariff headwinds and logistics cost volatility persist". The quarterly results fell more than 10% below the low end of the range projected in the company's IPO prospectus in August, according to Jefferies analysts. The margin narrowed to 2.1% from 6.2% a year earlier, mainly due to a surge in oil prices and freight rates resulting from Middle East geopolitical tensions.

Shein chose to absorb the cost increases rather than pass them onto consumers. The stock has tumbled more than 30% below its IPO price of HK$48.56 since listing on September 1, hitting as low as HK$30.36 before recovering to HK$30.88. The company's market capitalization was about HK$130 billion (US$16.6 billion) on Tuesday, a fraction of its 2022 peak valuation of nearly US$100 billion and well below the US$64 billion valuation reached in its Series D+ funding round in 2023.