Shein Reports $99 Million Q1 Loss in Hong Kong IPO Filing, Cites U.S. Tariff Impact

Fast-fashion giant Shein swung to a net loss of $99 million in the first quarter, a sharp reversal from a profit a year earlier, according to its draft prospectus for a Hong Kong initial public offering. The filing reveals the financial toll from the removal of a key U.S. duty-free import provision that has slowed sales growth and increased costs.

Financial Performance Under Pressure

The first-quarter loss contrasts sharply with a $395 million net income reported in the same period last year. Revenue saw minimal growth, rising just 1.1% to $9.05 billion from $8.95 billion, signaling a significant slowdown for the typically fast-growing retailer.

The company's prospectus stated the loss was also impacted by a $328 million non-cash, fair-value loss on convertible redeemable preferred shares. This is an accounting adjustment related to investor shares that can convert to ordinary stock, with their value changing ahead of a public listing.

U.S. Tariff Changes Bite into Sales

Shein's filing directly addressed the "adverse impact" from the U.S. government's removal of the "de minimis" trade exemption in May 2025. This policy had previously allowed the company to ship packages valued under $800 to U.S. consumers without incurring import duties.

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According to the prospectus, China-origin products sold by Shein to the U.S. are now subject to tariffs ranging from 10% to 87.5%. This change directly pressures the company's low-cost business model by increasing expenses and impacting its final prices for consumers.

Hong Kong IPO Moves Forward

The financial disclosures provide the first detailed look for potential investors as the Singapore-headquartered company proceeds with its long-awaited IPO in Hong Kong. The move follows stalled attempts to list in New York and London.

Shein received approval from the China Securities Regulatory Commission (CSRC) for the listing on July 10, a key regulatory hurdle. While the filing kicks off the process for investor roadshows, it did not disclose the potential size of the share sale, its offer price, or a specific timetable. Goldman Sachs, Morgan Stanley, and JPMorgan are listed as joint sponsors for the offering.