Shein, the Singapore-headquartered fast-fashion e-commerce company founded in China, reported a loss in the first quarter of 2026 amid mounting pressures from tariffs, geopolitical tensions, and rising costs. According to its Hong Kong stock exchange listing prospectus filed this month, the company recorded a net loss of US$99 million in the three months ending in March, a significant reversal from the US$395 million profit logged in the same period a year earlier. Despite the loss, net revenue saw a marginal increase of 1.1 percent, reaching US$9.05 billion.

For the full year of 2025, Shein reported net revenue of US$41.85 billion, marking an almost 8 percent increase from 2024. However, the company’s net profit declined by nearly 39 percent to US$2 billion during the same period. The prospectus highlighted several risks affecting performance in 2026, including tariff-related costs, pricing pressures, weaker demand in certain regions, and elevated logistics and material expenses.

One notable factor cited was the ongoing conflict involving Iran, which has dampened consumer demand in the Middle East. Regional activity was down year-on-year, and the company anticipates this will negatively impact revenue for 2026.

In the European Union, which accounted for about one-third of Shein’s net revenue in both 2025 and early 2026, a newly implemented €3 fee on low-value e-commerce imports came into effect in July, potentially increasing selling expenses and suppressing short-term sales volumes. Meanwhile, in the United States, the removal of the de minimis exemption and subsequent tariff hikes since May 2025 have raised tax costs considerably. Shein noted that goods sourced from mainland China and shipped to the U.S. now incur tariffs ranging from 10 percent to as high as 87.5 percent, resulting in a noticeable negative effect on U.S. net revenue through the remainder of 2025.

Amid these challenges, Shein has cleared a key hurdle in its planned initial public offering (IPO) by obtaining approval from the China Securities Regulatory Commission on July 10. The company’s listing hearing with the Hong Kong Stock Exchange was also successfully passed, paving the way for the IPO after previous efforts to list in New York and London stalled. Goldman Sachs, JPMorgan, and Morgan Stanley are acting as joint sponsors for the offering.

Details regarding the size, pricing, timetable, or expected proceeds of the IPO have not been disclosed in the pre-IPO prospectus. Shein will adopt a dual-class share structure, with Class A shares carrying 10 votes each and Class B shares one vote each. The company’s four co-founders collectively hold 65 percent of the voting rights, with chairman Sky Xu identified as the largest shareholder.