Shein warned in IPO filings that the same tariff-driven sales decline battering its U.S. business could spread to Europe, its largest market, as the company prepares for a Hong Kong stock listing, according to CNBC.
In documents submitted ahead of the offering, Shein disclosed that starting in May 2025 it shifted most of the additional tariff burden onto consumers via price increases, a move the company said weighed on its U.S. net revenues through the rest of that year
U.S. revenue slid more than 3% from 2024 to 2025, and the decline steepened to 14% when the most recent first quarter is measured against the same three months of the prior year. The company cautioned that European trends could match or worsen what it experienced in the U.S. “Although it remains too early to fully assess, it is possible that trends in the E.U. could be generally in line with or exceed the impact observed in the U.S. after the removal of the de minimis exemption there,” Shein said in the filing. In July, the European Union scrapped the exemption that had let low-value parcels enter the bloc without customs charges, introducing in its place a fixed levy of 3 euros for each product category in a shipment.
Europe represented 35% of Shein’s 2025 revenue, and growth there had already been slowing — sales rose about 9% in 2025, down from 33% growth the year before, and climbed just 2% in the first quarter. The company’s overall profitability has deteriorated as the U.S. tariff burden mounted. Goods of Chinese origin that Shein ships to American customers now carry duties ranging from 10% to 87.5%, compared with the prior band of 0% to 62.5%.