<\/p>\n
Fast-fashion retailer Shein Group disclosed slowing profitability and revenue growth in the first detailed look at its finances ahead of a planned Hong Kong listing, adding pressure on the valuation it can command in one of the year\u2019s biggest initial public offerings.<\/p>\n
The closely held company posted a loss of $99 million in the first three months of 2026, versus a $395 million profit a year earlier, while revenue rose just 1.1% to $9.05 billion.<\/p>\n
Operating income fell 26%, although Shein said the quarterly loss was largely driven by a $328 million fair-value hit on convertible redeemable preferred shares, according to a Hong Kong Stock Exchange filing. Last year\u2019s profit was $2.06 billion, down from $3.37 billion in 2024.<\/p>\n
The weaker results are likely to reinforce investor concerns over the sustainability of Shein\u2019s rapid growth, potentially lowering the valuation it can command in its long-awaited IPO. The company is looking to list as soon as August and raise about $2 billion to $3 billion, Bloomberg has reported, with the final amount dependent on investor valuation and feedback.<\/p>\n
\u201cThe lack of strong fundamental growth outlook ahead will inevitably weigh on valuations,\u201d Bloomberg Intelligence senior consumer analyst Catherine Lim said.<\/p>\n
Bloomberg reported in February that investors were pushing for a valuation of about $30 billion, down from $66 billion in a 2023 funding round \u2014 and as much as $100 billion in 2022.<\/p>\n
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A Shein distribution center in Indiana in 2025. A recent slowdown in the retailer\u0092s growth could weigh on its IPO.<\/p>\n
Shein\u2019s disclosure is part of its Hong Kong listing process, for which it won approval after years of delays and failing to push ahead with an IPO in both New York and London. In recent years, Shein has only provided investors with headline guidance on profit and sales, leaving them with limited visibility into its underlying performance.<\/p>\n
Shein\u2019s backers include IDG Capital, Mubadala Investment Co, Tiger Global Management and HSG. For 2025, it had told investors that it was expecting a mid-teen percentage growth in sales, Bloomberg has reported. The filing showed net revenue growth instead increased 8%, below that target and down from 21% in 2024.<\/p>\n
Tariffs and Competition<\/p>\n
Originally founded in mainland China and now headquartered in Singapore, Shein built a global fast-fashion empire by offering low-priced, trend-driven apparel shipped directly from suppliers. But US tariffs followed by the Middle East war have translated into higher material costs and eventually increased prices for consumers.<\/p>\n
Shein\u2019s global web traffic growth slowed from more than 60% year-on-year in the second half of 2025 to about 30% earlier this year \u2014 before easing to single digits in June and July \u2014 according to Similarweb.<\/p>\n
Worldwide app downloads declined in most of the 12 months through mid July, falling by as much as 30% year-on-year at their steepest, according to market researcher Apptopia.<\/p>\n<\/p>\n
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US sales fell for most of the 12 months through the week of July 19, according to data compiled by Bloomberg Second Measure, which analyzes credit and debit card transactions in the country. They saw a 13% drop in June from the previous year, and the fall further deepened in July.<\/p>\n
Shein has said President Donald Trump\u2019s removal of the so-called de minimis exemption on tariffs for parcels carrying goods worth no more than $800 had an adverse impact on its US sales and overall growth in net revenues, although it had since observed a normalisation in sales trends there.<\/p>\n
The European Union\u2019s removal of the \u20ac150 ($170) customs duty exemption may also have a material impact on Shein\u2019s business, the retailer disclosed, as it generated about one-third of its revenues from Europe in 2025 and in the first quarter of 2026. Shein said the impact from the EU move may be the same or even greater than that of the de minimis removal in the US.<\/p>\n
Shein has also been contending with intensifying competition from PDD Holdings Temu in key markets including the US and Europe, while regulators have stepped up scrutiny of the retailer\u2019s operations.<\/p>\n
Going forward, \u201cscrutiny on platform compliance in the EU is rising and this may result in rule changes which could curtail Shein\u2019s growth,\u201d BI\u2019s Lim said. \u201cTariff workarounds might only partially blunt an industry-wide squeeze on low-cost, China-origin platforms as regulators close long-used loopholes.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Sheins #slowing #growth #disclosure #pressures #IPO #valuation<\/p>\n","protected":false},"excerpt":{"rendered":"
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