Shein Group Ltd.’s net income rose to over $400 million and revenue was almost $10 billion in the first quarter as consumers snapped up the fast-fashion retailer’s products ahead of US tariffs, according to people familiar with the matter.
The performance helped lift the company’s profit margin to about 5%, the people said, asking not to be identified because the figures were disclosed confidentially.
Shein said in an emailed statement that “the data is inaccurate” without elaborating.
The company’s path toward an initial public offering has developed into a saga, with an initial plan to list in the US derailed as its supply chain and labor practices were scrutinized. Shein also considered the UK before opting for Hong Kong, where it has confidentially filed a draft prospectus, Bloomberg News reported earlier in July.
The clothing retailer, which was founded in mainland China and is headquartered in Singapore, doesn’t disclose its financial figures publicly and it’s unclear how Shein fared in the April-June quarter, which kicked off with US President Donald Trump’s “Liberation Day” tariff announcements.
The US government’s decision to remove a so-called de minimis rule has been a blow to Shein, as the policy had exempted low-value goods — such as the ones the company ships — from tax. But since the rule change on imports from China and Hong Kong only took effect in May, Shein likely benefited for a while as consumers stocked up on products beforehand.
Trump has now signed an executive order removing the de minimis rule for all countries from Aug. 29 — not just goods coming from China. That means Shein’s efforts to diversify its supply base to places like Vietnam won’t help to sustain its model of sending small parcels directly to US consumers with no duties.
Shein still needs approval from Chinese regulators to proceed with a share sale in Hong Kong. The company was valued at $66 billion in a funding round in 2023, but it is under pressure to cut its valuation to about half of that.
Citing people with knowledge of the matter, the Financial Times reported in February that Shein’s 2024 net profit fell by almost 40% to $1 billion, while sales totaled $38 billion.
By Dong Cao and Pei Li
Learn more:
Shein Is Struggling to Clean Up Its Dirty Image
The company’s latest sustainability report shows it’s still fashion’s most polluting player, with planet-warming emissions that far outstrip those of rivals and help make the brand a target for politicians and regulators.
