Shein, a fast fashion e-commerce platform, revealed its financial performance for the second quarter of 2026 on September 28, marking its first public financial report since being listed on the Hong Kong Stock Exchange on September 1. The report indicated a 13.9% year-on-year decrease in revenue in the European market and a 6% decline in the US market. Over the past month, Shein’s stock price has plummeted by approximately 27.3%.
According to the report, global net revenue for the second quarter totaled $11.08 billion (about $14.17 billion SGD), showing a marginal increase of only 0.9% year-on-year. Revenue in the European market dropped by 13.9% to $3.77 billion, while revenue in the US market fell by 6% to $2.5 billion. Growth in other regions such as Latin America offset the decline in the primary markets.
Europe accounts for about one-third of Shein’s revenue. The company attributed the decline in European sales to preemptively raising prices and reducing online advertising spending in response to policy changes within the European Union. Since July 1, 2026, the EU has eliminated the customs exemption for parcels valued below 150 euros and introduced a temporary tariff of 3 euros per category (customs code). Shein heavily relies on low-cost cross-border parcel models, prompting an adjustment in strategy. The US had already terminated similar tax-free treatment for low-value parcels in 2025.
Despite a slight increase in overall revenue, profitability has been noticeably under pressure. The second-quarter net profit as of June 30 amounted to $240 million, a significant drop from the previous quarter’s net loss of $99 million. The net profit margin for the second quarter decreased to 2.1%, lower than the 6.2% in the same period last year. The report highlighted that the Middle East conflict has driven up oil prices and freight costs, resulting in an 18.1% increase in fulfillment costs.
Since its listing on the Hong Kong Stock Exchange on September 1, Shein’s stock price has plummeted by around 27.3% from the initial public offering (IPO) price of 48.56 Hong Kong dollars. The stock price fell to 43.80 Hong Kong dollars on the first day of trading but closed at around 48.50 Hong Kong dollars. The company was valued close to $100 billion during its peak in 2022, with a market capitalization of approximately $26-27 billion upon listing, shrinking by nearly 70%.
Founded in China, Shein’s current headquarters are located in Singapore, while its production and supply chain continue to heavily depend on China. CEO and Chairman Sky Xu stated that the company plans to expand into higher-priced clothing segments to enhance profitability and may consider expanding its brand portfolio through acquisitions. He remains cautiously optimistic about the outlook for the second half of 2026, emphasizing cost optimization and productivity enhancement to counter tariff and logistical pressures, with hopes that the shopping peak season in the fourth quarter will drive order growth.
Xu mentioned in a statement, “As the product mix gradually shifts towards higher-priced brands, the overall average selling price on the platform will also increase accordingly. Our vision is to create a highly diversified brand collection that caters to consumers’ diverse needs across different price ranges and various consumption scenarios.”
Analysts are closely monitoring the comprehensive impact of the new EU tariffs, expecting it to become more apparent in the third-quarter performance. The market focus remains on whether Shein can successfully transition and sustain growth amidst these challenges.