Shein reports $99 million Q1 loss after de minimis rule ends

Shein has reported a challenging start to the year as the fast-fashion giant posted a $99 million first-quarter loss while preparing for its planned Hong Kong stock market debut. The company attributed the setback to weaker sales following changes in U.S. trade rules that ended duty-free treatment for many low-value imports, significantly increasing costs for products shipped from China.
The financial results were further impacted by a one-time accounting adjustment linked to investor share valuations ahead of the IPO. The policy changes have forced Shein to reassess its pricing strategy in the United States, with the retailer acknowledging that some of the additional costs may be passed on to customers. At the same time, Europe has introduced new fees on low-value imports, creating additional pressure on the company's international business. Despite the difficult quarter, Shein continues to report strong long-term revenue growth, reflecting sustained global demand for its affordable fashion products. However, slowing profit growth highlights the increasing challenges facing cross-border e-commerce as governments tighten trade regulations and impose stricter import policies. The company has shifted its listing plans to Hong Kong after unsuccessful attempts to go public in New York and London, receiving regulatory approval to move ahead with the offering. As Shein prepares for one of the most closely watched IPOs in the retail sector, investors will be watching whether the company can adapt to rising costs, evolving regulations, and intensifying global competition while maintaining its rapid growth trajectory.