[REVISION HISTORY]

Shein profits and shares plunge amid declining US and EU

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2026-09-29 06:25 UTC → 2026-09-29 17:40 UTC · added ~~removed~~

Shein profits and shares plunge amid declining US and EU ~~sales~~

Following its ~~initial public offering~~ September 1 debut on the Hong Kong Stock Exchange, Shein has faced significant ~~stock volatility and~~ financial ~~pressure.~~ and market volatility. While the company raised approximately $1.7 billion through ~~the sale of 280 million shares at HK$48.56,~~ its IPO, its shares have ~~since~~ experienced a sharp decline, falling ~~nearly 28 per cent~~ as much as 27.3% since ~~the~~ listing. Following the release of its first post-IPO quarterly results, shares plummeted further by between 10% and 14%. In its first financial results as a public company, Shein reported a 67% drop in adjusted net profit for the second quarter, falling to approximately $228 million. Although total net revenues saw a marginal increase of 0.9% to $11.08 billion, net profit margins compressed to 2.1% from 6.2% the previous year. Regional performance showed a sharp divergence: sales in Europe fell by 13.9% to $3.77 billion, and US revenue declined by 6% to $2.5 billion. These declines are attributed to price increases and reduced advertising spending ahead of new European Union regulations, which imposed a 3-euro fee on low-value e-commerce parcels ~~starting July 1, 2026.~~ and removed tax exemptions for small packages. Profitability was further squeezed by an 18.1% jump in fulfillment costs, driven by rising fuel and freight expenses linked to geopolitical tensions in the Middle East. To combat these challenges, CEO Sky Xu announced a strategic shift toward higher-priced clothing brands and a more diversified portfolio. This aligns with Shein’s ongoing pivot toward an acquisition-driven ~~strategy, utilizing its cash reserves to integrate brands into its ‘Xcelerator’ programme~~ strategy and investing in European logistics, such as warehouse expansions in Poland, to mitigate tariff impacts. Despite these setbacks, the company reported growth in marketplace service revenue and order volumes, particularly in Latin America.

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