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Shein swings to Q1 net loss of $99 million, gets China nod for Hong Kong IPO
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Online fast-fashion retailer Shein reported a net loss of $99 million in the first quarter of 2026, swinging from a $395 million profit in the same period last year, according to its draft Hong Kong listing prospectus. The loss was driven by the Trump administration's removal of the 'de minimis' duty-free exemption, which had allowed packages under $800 to enter the U.S. without tariffs. China-origin products shipped to the U.S. are now subject to tax rates of 10% to 87.5%. Revenue edged up 1.1% to $9.05 billion. The company also recorded $328 million in fair-value losses on convertible redeemable preferred shares. Shein received approval from China's securities regulator on July 10 for its Hong Kong IPO, after failed attempts in New York and London. The filing did not disclose the offer size or price. Founder Sky Yangtian Xu is listed as chairman and CEO; former executive chairman Donald Tang is no longer in management. Goldman Sachs, Morgan Stanley, and JPMorgan are joint sponsors.
Source report
By: Liz Lee and Yantoultra Ngui Source: Reuters
BEIJING/SINGAPORE, July 26 (Reuters) — Shein swung to a net loss of $99 million in the first quarter of this year, according to the draft prospectus for its Hong Kong listing, as sales were impacted by the Trump administration's removal of the "de minimis" duty-free policy.
The filing sets the stage for investor roadshows and official bookbuilding for the online fast-fashion retailer's highly anticipated global offering.
The Singapore-headquartered company, founded in China, did not disclose the size of the Hong Kong share sale, the offer price, the listing timetable, or expected proceeds from the offering in the draft prospectus.
Shein received approval from the China Securities Regulatory Commission (CSRC) for its Hong Kong listing on July 10, clearing the path after previous unsuccessful attempts in New York and London.
Removal of Duty Exemption Has Impact
The financial details, disclosed for the first time, offer investors a clearer view of the pressures facing Shein as it seeks new capital amid higher costs, slower growth, and increasing regulatory scrutiny in key markets.
Since May 2025, the removal of the de minimis exemption has had an "adverse impact" on U.S. sales and overall growth, and has contributed to higher expenses, Shein stated in the filing.
The de minimis rule had previously allowed packages valued under $800 to enter the U.S. without import duties. Shein noted that China-origin products sold by the company or through its marketplace and shipped to the U.S. are now subject to tax rates ranging from 10% to 87.5%.
Revenue Reaches $9.05 Billion
The first-quarter loss was also driven by $328 million in fair-value losses on convertible redeemable preferred shares. These are investor shares that can later convert into ordinary shares, and their accounting value can fluctuate before a listing.
In the same quarter a year earlier, Shein posted net income of $395 million. Revenue rose 1.1% to $9.05 billion, up from $8.95 billion.
The filing listed founder Sky Yangtian Xu as chairman and chief executive. Donald Tang, who previously served as executive chairman, was not listed among Shein's directors or senior management.
Goldman Sachs, Morgan Stanley, and JPMorgan are joint sponsors of the listing, according to the filing.
(Reporting by Yantoultra Ngui in Singapore and Liz Lee in Beijing; Editing by Helen Popper and David Holmes)
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Shein reports Q1 loss, targets reduced valuation for Hong Kong IPO