SINGAPORE — Shein reported a net loss of $99 million for the first quarter of 2026, ending a period of profitability despite a slight increase in overall revenue. The Singapore-headquartered retailer attributed the financial reversal to the removal of a key US tariff exemption and an accounting adjustment related to its planned initial public offering.

The company generated $9.05 billion in revenue during the three months ended March 31, 2026, a 1.1% rise from the $8.95 billion recorded in the same period a year earlier. This top-line growth coincided with an expansion of its user base, as Shein reported 281 million active customers for the year ending in March 2026. That figure represented an increase compared to the previous year, with customers placing over one billion orders during that timeframe.

In the first quarter of 2025, Shein had reported net income of $395 million. The shift to a $99 million net loss in the current quarter was driven in part by a $328 million paper loss recorded due to an accounting change for convertible redeemable preferred shares. Operating income for the first quarter of 2026 stood at $258 million, marking a 26% decrease compared to the same period in 2025. The company's operating margin also contracted to 2.9% in the first quarter of 2026 from 3.9% in the prior year, according to its filing with the Hong Kong Stock Exchange.

Shein identified regulatory changes in its largest market as a primary challenge to its financial performance. "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," the company said in its filing. The de minimis exemption had previously allowed goods valued at $800 or less to enter the U.S. without paying tariffs.

U.S. President Donald Trump signed an executive order ending the global de minimis tariff exemption, which came into effect on August 29, 2025. The White House stated the global exemption was being used to "evade tariffs and funnel deadly synthetic opioids" to the U.S.

Following the policy change, Shein said China-origin products sold by it or through its marketplace and shipped to the U.S. are now subject to tax rates ranging from 10% to 87.5%. To mitigate these increased expenses, the company indicated it would adjust its pricing strategy. "In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the US market to offset a portion of the increased costs," Shein said in its filing.

Beyond US trade policy, Shein cited geopolitical instability as a factor affecting its operations. The company said the Iran war hit demand, increased costs, and caused delivery delays in some markets. Additionally, the European Union imposed a €3 levy on low-value e-commerce imports in July.

In its filing, he warned that the European Union's fee on low-value e-commerce imports could have an impact on its revenue similar to or worse than the impact of the U.S. de minimis exemption removal. The filing also outlined risks including pricing pressures, weaker regional demand, and higher logistics and material costs on its 2026 financial results.

The financial results come as Shein advances its plans to go public in Asia. The company filed for an IPO in Hong Kong on July 10, 2026, after receiving approval from the China Securities Regulatory Commission (CSRC), according to a report from Inside Retail Asia. Goldman Sachs, Morgan Stanley, and JPMorgan are joint sponsors of Shein's listing.

The draft prospectus did not disclose the size, timetable, pricing, or expected proceeds of the planned initial public offering. Shein previously attempted to list in New York and London without success.

Shein is headquartered in Singapore and was founded in China. Sky Yangtian Xu is Shein's founder, chairman, and chief executive. The company has faced regulatory scrutiny regarding its products in recent years.

SHEIN Distribution Corporation recalled approximately 17,300 children's pajama sets sold exclusively on SHEIN.com from August 2023 through November 2024 due to violation of federal flammability regulations. LuckupShein window roll-up shades sold exclusively on SHEIN.com from May 2023 through December 2024 were recalled due to strangulation and entanglement hazards violating federal regulations for window coverings.

Shein's first quarterly net loss since at least early 2025 reflects the financial position of ultra-fast-fashion retailers during shifts in international trade policy. The removal of the de minimis exemption and the introduction of the EU levy remove the structural cost advantages that allowed the company to offer deeply discounted prices. With operating income down 26% and net income falling in 2025 compared to 2024, the company is navigating a tighter margin environment as it seeks a public listing.