Shein posts 1% revenue growth in first results since IPO

Shein Global Holdings reported 1% net revenue growth in the first half of 2026 in its inaugural results as a public company, as the online fashion retailer grapples with slowing demand and rising costs.

Shein, which made its Hong Kong trading debut on September 1, said in an exchange filing Monday that operating income fell 52.9% from the first half of 2025, extending a deterioration in profitability seen in the first three months of the year.

Shein had already warned in its IPO filing that the war in Iran would weigh on its first-half results. At the time, it forecast revenue growth would be broadly in line with the 1.1% recorded in the first quarter, with a slightly lower operating margin.

The results come less than a month after Shein’s debut capped a years-long and repeatedly delayed path to the public markets. Its valuation of about $26 billion was a fraction of the roughly $100 billion it commanded at its 2022 peak.

“We expect the external environment to remain uncertain in the second half of 2026, with tariff headwinds and logistics cost volatility likely to persist,” the company wrote in the interim report. “That said, the fourth quarter – encompassing 11.11, Black Friday, Cyber Monday, and the Christmas season – remains our most significant promotional window and should drive a meaningful uplift in orders.”

Shein’s revenue growth and profitability have deteriorated since last year, adding pressure on executives to reassure investors as the stock trades nearly 27% below its listing price. The company is grappling with slowing demand, rising costs and mounting regulatory pressure.

Growth woes

Early indicators point to further weakness in the third quarter. Third-party data, Bloomberg interviews with core suppliers and analyst estimates suggest conditions have deteriorated further during the period, marked by softer US sales, and declining global web traffic. That will raise pressure on Shein to expand its new businesses faster to offset declining conditions in its core ultra-fast fashion operation.

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“Without a clear strategy to address growth concerns in the short term, reversing its long-term slide will be challenging,” said Shen Meng, director at Beijing-based investment bank Chanson & Co.

Further third-quarter weakness would reinforce investor concerns about Shein’s longer-term growth prospects, Shen said.

Shein’s US sales fell more than 10% in the three months through August and early September, according to Bloomberg Second Measure, which analyzes credit and debit card transactions. That was steeper than the single-digit contraction in the broader speciality online retail category, it said.

Shein’s sales have underperformed the broader apparel industry in the country since late last year. Meanwhile, rivals including PDD Holdings Inc.’s Temu and Amazon.com Inc. have posted single- to double-digit growth since April.

Two core suppliers in China told Bloomberg their orders from Shein have fallen roughly 20% during the third quarter. Declines worsened in August and September, said the suppliers, who asked not to be identified discussing business with the company.

Shein didn’t immediately respond to a request for comment.

Other indicators point to growing difficulty attracting — and retaining — shoppers. Shein’s global web traffic declined from a year earlier in August, its first contraction since late 2024, according to Similarweb.

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Time spent on Shein also declined more than 10% in July and August, while app downloads plunged more than 40% in August, according to Apptopia.

Some of the weakness may reflect a broader pullback in e-commerce. The two suppliers said their business with Temu has also weakened, while the rival platform’s global web traffic has fallen since March. Time spent on Temu and Amazon also declined this summer. Temu did not immediately respond to a request for comment.

Regulatory and cost pressures are adding to Shein’s challenges. France’s new fees on ultra-fast-fashion items took effect Sept. 1, while the European Union, a key market, abolished its de minimis customs duty exemption from July.

Bloomberg Intelligence analysts Catherine Lim and Jason Zhu see Shein’s revenue growth slowing to about 2.5% in 2026 and adjusted operating profit falling more than 19%, as higher oil and freight costs tied to the Iran war squeeze margins.

The bigger question is whether the deterioration continues. Third-quarter sales will be “the key test,” Lim and Zhu wrote in a note.

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