Investors hit the sell button, pushing Shein down as much as 12.1% following its initial report as a public company, a decline that marked the steepest single-day fall since it began trading in Hong Kong on Sept. 1. By Tuesday morning, the slide had Shein valued at around $16.8 billion, compared with about $26 billion when it listed.
Shein said first-half operating income tumbled 53%. The company pointed to climbing expenses and fading demand pinching margins, and said the pressure intensified in the second quarter. The update arrived Monday alongside the retailer's first-ever earnings release since becoming publicly traded.
Heading into the listing, Shein had cautioned that the Iran war would drag on its first-half performance. The debut also occurred at a far lower valuation than before - only a small slice of the roughly $100 billion mark achieved in 2022. Jefferies analysts, including John Chou, wrote Tuesday that second-quarter adjusted profit likely fell well short of expectations, and they flagged that projections for 2026 and 2027 may be rosy. They also warned margins could come under more strain when the European Union ends a customs break on low value parcels in July.
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Early reads point to a tough third quarter too. US sales declined by more than 10% over the three months that spanned August and extended into early September, Bloomberg Second Measure reports, and the brand has lagged the broader US apparel category since late last year. Global web traffic has cooled as well. Combined with the fact that revenue growth and profitability have worsened since last year, the onus is firmly on leadership to rebuild confidence.
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