The signage of cross-border fast fashion e-commerce company SHEIN at a garment factory in Guangzhou, in China’s southern Guangdong Province, on July 18, 2022. Jade Gao/AFP via Getty Images
Shein shares have lost more than a third of their value since the fast-fashion retailer’s Hong Kong debut less than a month ago, after its latest financial report showed a steep drop in profits and falling sales in the United States and Europe.
The stock fell as much as 14 percent during Tuesday trading to a record low after Shein reported that adjusted net income plunged 66.6 percent from a year earlier to $228 million in the second quarter.
Net revenue rose just 0.9 percent to $11.08 billion during the three months ended June 30. The adjusted net income margin fell to 2.1 percent from 6.2 percent a year earlier.
For the first half of 2026, Shein reported $20.1 billion in net revenue, an increase of 1 percent. Adjusted net income fell 55.6 percent to $499 million, while operating income declined 52.9 percent to $493 million.
The company processed 298 million orders during the second quarter, up 7.6 percent from a year earlier, while its number of active customers rose to 291 million from 254 million.
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Shein said revenue growth was partly held back by the growing share of sales through its marketplace, where the company records service fees rather than the full value of products sold.
US and European Sales Fall
Revenue from the United States fell 6 percent during the second quarter, while European revenue declined 13.9 percent.
Shein said the U.S. decline improved from a 14.3 percent drop in the first quarter, reflecting what it called a continued recovery from the impact of U.S. tariffs.
The United States ended duty-free treatment for low-value packages from China and Hong Kong in May 2025, removing a trade provision that had helped companies such as Shein ship inexpensive individual orders directly to American customers without paying regular import duties.
The Trump administration said goods from China and Hong Kong valued at $800 or less would no longer qualify for duty-free de minimis treatment beginning May 2, 2025.
In Europe, Shein said sales volume declined after it raised prices and reduced online advertising ahead of the July 1 removal of the European Union’s 150-euro ($176) customs-duty exemption for low-value packages.
Shein’s fulfillment expenses rose 18.1 percent in the second quarter to about $5.59 billion, equal to 50.4 percent of revenue, compared with 43.1 percent a year earlier.
Chairman and CEO Xu Yangtian said the profitability decline was primarily driven by sharply higher oil prices and freight rates amid geopolitical tensions in the Middle East. Shein said it chose to absorb those higher transportation costs rather than pass them on to customers.
Xu said Shein expects “tariff headwinds and logistics cost volatility [are] likely to persist” during the second half of the year.
