Shein flags tariff hits after posting quarterly loss ahead of Hong Kong IPO

Fast-fashion retailer Shein has reported a net loss for the first quarter of 2025, reversing a year-earlier profit, as it warned that new U.S. tariffs on Chinese imports would hit its business. The disclosure came in a filing for its planned Hong Kong initial public offering.

The company, which sells ultra-cheap clothing mainly to young shoppers in the U.S. and Europe, posted a net loss of $38 million for the three months through March, compared with a net profit of $62 million a year earlier. Revenue rose 11% to $8.1 billion, but the company said the tariffs imposed by the Trump administration on goods from China, including the de minimis rule change, had increased costs and disrupted its supply chain.

The financial results matter because they underscore the challenges Shein faces as it seeks to list in Hong Kong, a process that has been delayed by regulatory hurdles and geopolitical tensions. The IPO could value the company at around $50 billion, down from a peak of $100 billion in 2022, and is seen as a test of investor appetite for Chinese tech listings.

Shein’s filing also revealed that its full-year 2024 net profit fell 38% to $1.1 billion, as growth slowed and competition from rivals like Temu intensified. The company attributed the decline to higher logistics costs and currency fluctuations.

Founded in China but now headquartered in Singapore, Shein has faced mounting scrutiny over its labor practices and environmental impact. The company has pledged to invest in AI and automation to improve efficiency, and said it would use part of the IPO proceeds for such technologies.

Looking ahead, Shein warned that the tariff situation could worsen if the U.S. expands the measures, and that it may need to raise prices, potentially dampening demand. The IPO is expected to proceed later this year, subject to market conditions and regulatory approval.