Shein Shares Drop 14% to Record Low Following Post-IPO Profit Decline
Shein said higher fulfilment costs and tariff pressure cut second-quarter adjusted profit to $228 million, while Europe sales fell 13.9% and U.S. revenue dropped 6%.
- 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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75 Articles
Shares of Shein, a company that sells cheap clothes online, plunged as much as 14 percent to a new low in Hong Kong trading on Tuesday after reporting a sharp drop in quarterly profit. The company's shares only went public earlier this month.
Shein shares dive more than 11% after earnings disappoint
Shares in Chinese fast-fashion giant Shein plunged more than 11 percent in Hong Kong on Tuesday after releasing disappointing financial results. The company has faced scrutiny over its environmental footprint and allegations of human rights violations, and faces growing competition from low-cost e-commerce companies such as Temu and AliExpress. The firm said on Monday that […]
Shein's action has fallen by more than 11%, following results undermined by regulatory tightening, particularly in Europe.
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For the first time since the market launch on September 1, the online retailer Shein announces interim results. Investors are disappointed.
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).
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