{
  "id": 10472954,
  "title": "Shein returns to profitability despite sharp drop in Europe sales after price hikes",
  "url": "https://urgent.news/2026/09/28/shein-returns-to-profitability-despite-sharp-drop-in-europe-sales",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-28T15:25:00.000Z",
  "source": {
    "name": "Straits Times Business",
    "slug": "straits-times-business",
    "url": "https://www.straitstimes.com/business/shein-returns-to-profitability-despite-sharp-drop-in-europe-sales-after-price-hikes"
  },
  "original_language": "en",
  "account": "Fast-fashion giant Shein reported a return to profitability in the second quarter despite a significant decline in European sales following price increases and reduced online advertising efforts. The company anticipated the European Union would impose fees on low-value e-commerce parcels from July 1, which were expected to negatively impact its business in a market representing roughly a third of its revenue. With Hong Kong being the birthplace of Shein's debut on September 1, its shares have suffered a 27.3% drop from the HK$48.56 offer price as investors anxiously await the potential impact of these fees.\n\nIn the second quarter, Shein's sales totaled US$11.08 billion ($14.17 billion), with European sales falling 13.9% to US$3.77 billion and US sales decreasing by 6% to US$2.5 billion. Overall sales, however, grew by 0.9% compared to the previous year, as growth in Latin America compensated for the declines in Shein's primary markets. The net income for the quarter ended June 30 was US$2.4 billion, a stark contrast to the US$99 million loss in the previous quarter.\n\nCEO and chair Sky Xu revealed that Shein is strategizing to introduce higher-priced clothing, which will lead to an increase in the overall average selling price. Additionally, Shein plans to expand its brand family, potentially through acquisitions, with the goal of diversifying its product line across multiple price points and occasions. Unfortunately, the net profit margin declined to 2.1% in the second quarter, primarily due to the Middle East conflict driving up oil prices and freight costs, causing Shein's fulfillment expenses to increase by 18.1%. Shein had previously raised prices in the US in 2025 after the Trump administration ended de minimis duty-free access for low-value ecommerce parcels and faces a similar challenge in Europe in 2026. The EU's imposition of fees on low-value parcels starting July 1 will have a more pronounced effect on Shein's third-quarter results, which are anticipated to reflect a decline surpassing the impact of the US removing de minimis last year.",
  "summary": "CEO expects newly listed group's push into higher-priced clothes to boost profitability.",
  "key_points": [
    "Shein returned to profitability in Q2 with US$2.4 billion net income",
    "European sales dropped 13.9% to US$3.77 billion after price hikes",
    "EU fees on low-value parcels expected to affect Q3 results negatively"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}