Fast-fashion retailer Shein reported a $99 million net loss in the first quarter of 2026 after new US tariffs on low-value imports slowed sales in one of its biggest markets.
The Singapore-headquartered company, which was founded in China, posted the loss after recording a $395 million profit during the same period a year earlier. The financial results were released as part of preparations for the company’s planned stock market listing in Hong Kong.
Tariff Changes Hit US Business
Shein said its US business was affected after President Donald Trump ended a duty exemption that allowed low-value packages to enter the country without paying import tariffs.
The company said the policy change reduced sales growth in the United States and affected overall revenue.
“The removal of the US de minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues,” Shein said in its filing.
To reduce the impact of the higher import costs, the company said it plans to increase prices for some products sold in the US market.
Global Challenges Add Pressure
Besides the tariff changes, Shein said the conflict involving Iran also affected its operations.
According to the company, the conflict weakened consumer demand, increased operating costs and caused delivery delays in some markets.
The quarterly results also included a $328 million paper loss linked to an accounting adjustment involving special investor shares. The company said the value of those shares can change before its planned stock market listing.
Customer Base Continues to Grow
Despite the weaker financial performance, Shein continued to expand its global customer base.
The company said it had 281 million active customers in the 12 months to the end of March 2026, representing an increase of more than 16% compared with the previous year.
During the same period, shoppers placed more than one billion orders through the platform.
Hong Kong Listing Moves Forward
Earlier this month, China’s Securities Regulatory Commission approved Shein’s proposed initial public offering (IPO) in Hong Kong after previous attempts to list in New York and London failed.
Although the company did not disclose the size, pricing or timing of the share sale, the listing is expected to take place in the coming months.
Trade Policies Reshape E-Commerce
The financial results highlight the impact of changing global trade policies on online retailers.
The US ended the de minimis exemption, which previously allowed goods valued at $800 or less to enter the country without import duties. The exemption had helped platforms such as Shein and Temu sell low-cost products to American consumers.
Meanwhile, the European Union has also introduced a €3 levy on low-value e-commerce imports, adding further pressure on global online retailers.
As governments tighten trade rules, companies like Shein are expected to face higher operating costs while adjusting their pricing and supply chain strategies.
