Global Market: Shein slips to quarterly loss as US tariff changes weigh on sales ahead of Hong Kong IPO
According to Reuters, the filing marks the first public disclosure of Shein’s detailed financial performance ahead of its long-awaited Hong Kong initial public offering (IPO). The prospectus did not reveal the size of the offering or the expected price range.
Shein’s annual revenue continued to grow over the past three years, rising from $32.1 billion in 2023 to $38.8 billion in 2024 and $41.9 billion in 2025, representing a compound annual growth rate of 14.2%. The company attributed the growth to an expanding product portfolio and a larger global customer base.
However, momentum slowed significantly in the first quarter of 2026. Total revenue increased just 1.1% year-on-year to $9 billion, while revenue from the U.S. market declined 14% to $2 billion. The US accounted for 22.5% of total revenue, down from 26.6% a year earlier, following Washington’s decision to remove the import duty exemption for small packages.
The geographical mix of Shein’s business continued to shift away from the United States. The U.S. contribution to annual revenue fell from 29.4% in 2023 to 24.1% in 2025, equivalent to $10.1 billion.
Europe emerged as Shein’s largest market in 2024 and strengthened its lead in 2025. Revenue from the region climbed from $10.2 billion in 2023 to $14.8 billion in 2025, accounting for 35.4% of total net revenue.
Markets outside the U.S. and Europe also expanded steadily. Revenue from the “Rest of the World” segment increased from $12.4 billion in 2023 to $16.9 billion in 2025, lifting its share of total revenue from 38.8% to 40.5%, the prospectus showed.Profitability weakened during the latest quarter as rising operating costs outpaced sales growth. Operating profit fell 26% year-on-year to $258 million, while the operating margin narrowed to 2.9% from 3.9% in the corresponding period last year. Over recent years, Shein’s operating margin has ranged from 4.3% in 2023 to 2.5% in 2024, Reuters reported.
Product sales remained the retailer’s primary revenue driver, contributing nearly 90% of total revenue, or $37.1 billion, in 2025. Meanwhile, service revenue expanded sharply from $868 million in 2023 to $4.7 billion in 2025.
Although apparel continued to dominate Shein’s business, its share of revenue declined from 68.8% in 2023 to 63.8% in 2025, reflecting faster growth in other merchandise categories. Revenue from non-apparel products rose from $10 billion to $15.1 billion over the same period.
The company’s first-quarter loss was largely driven by a $328 million non-cash fair-value adjustment related to convertible redeemable preferred shares, which are designed to convert into ordinary shares upon the company’s stock market listing.
Shein’s valuation has fallen sharply in recent years. The company was valued at $98.2 billion during a 2022 fundraising round, before dropping to $64 billion two years later. Reuters reported earlier this month, citing a source, that Shein is targeting a valuation of $40 billion to $50 billion in its planned Hong Kong IPO.
