Shein posted a $99 million net loss in the first quarter of 2026, swinging from a $395 million profit in the same period a year earlier, as the elimination of a U.S. duty exemption weighed on its largest market and a one-time accounting charge added to the damage.
Documents submitted ahead of the company’s planned Hong Kong initial public offering showed U.S. revenue declined 14.3% to $2.04 billion from $2.38 billion in the same quarter of 2025
The U.S. accounted for 22.5% of quarterly revenue, down from 29.4% of annual revenue in 2023. “The removal of the U.S. de minimis exemption has had an adverse impact on our sales in the U.S. and the overall growth of our net revenues,” Shein said in the filing. Under the former de minimis rule, shipments valued below $800 entered the U.S. duty-free. Goods of Chinese origin that Shein sells and sends to American customers now face tariff rates between 10% and 87.5%, according to the filing.
Also weighing on the first-quarter result was a $328 million fair-value charge tied to convertible redeemable preferred shares, a class of instrument held by early investors that may eventually become ordinary stock and that carries a balance-sheet value subject to revision until the company lists. The company’s operating margin compressed to 2.9% in the first quarter, compared with 3.9% in the same period a year before. Shein said it is raising prices in the U.S. to offset a portion of the increased costs.