Shein Shares Drop 14% to Record Low Following Post-IPO Profit Decline
The fast-fashion retailer said tariff headwinds and logistics costs will persist as it shifts toward higher-priced clothes and expands its brands.
- Fast-Fashion retailer Shein saw its Hong Kong-listed shares tumble up to 14% to an all-time low of HK$31.44 following the release of its inaugural earnings report since going public.
- The company reported a 67% year-on-year drop in second-quarter adjusted net profit to $228 million, while overall revenue grew by just 0.9% amid stagnating sales in key Western markets.
- Profitability was significantly squeezed by escalating jet fuel and air-freight costs driven by Middle East conflicts, reducing quarterly net margins from 6.2% down to 2.1%.
- European sales experienced sharp declines following price hikes and reduced marketing spend implemented ahead of new €3 product category fees levied by the European Union on low-value e-commerce imports.
- The stock drop erased over $9 billion from Shein's market valuation since its September 1 debut, prompting management to announce plans to expand local European inventory and move into higher-margin apparel lines.
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In the report sent on Monday to the Hong Kong stock exchange, the company indicated that, between April and June, net profit increased 247%, to about 2,398 million dollars (about 2,110 million euros), but the adjusted profit fell 66.6%, to about 228 million dollars (200 million euros).
European parcel tax hits Shein hard: prices rise, profits halve - RetailDetail EU
The new European tax on low-cost packages is hitting Shein’s pricing model hard: operating profit fell by half in the first half of the year. The Chinese fashion giant is raising its prices, cutting back on advertising, and expanding its European logistics network.
For Europe alone, turnover fell by 13.9% in the second quarter.
Observador
Correio da ManhãHigher oil prices in the face of geopolitical tensions and the rates applied by the United States and Europe have been impacting the company's performance.
Shein's shares collapsed by 11.7% on the Hong Kong Stock Exchange after China's online fashion group reported a sharp drop in quarterly earnings.
Shares of fast-fashion platform Shein fall 6% after quarterly profit slides 67% - Regional Media News
HONG KONG, Sept 29 (Reuters) - Shares of fast-fashion retailer Shein dropped more than 6% on Tuesday after it reported a 67% fall in quarterly profit, fuelling investor concerns over margin pressure and slowing growth. Jefferies analysts estimated that earnings landed more than 10% below [...]
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