San Francisco Frontiers - Shein sees 1% revenue growth in first half of 2026

The Chinese-founded company's net income attributable to shareholders reached $2.3 billion in the first six months of 2026, up from $1.1 billion in the same period last year.

Its adjusted earnings before interest and taxes, dropped 50.4 percent to $538 million.

Monday's results were Shein's first earnings report since its initial public offering this month, which put the company's valuation at around $26.3 billion -- well short of the nearly $100 billion during private fundraising rounds in 2022.

"We expect the external environment to remain uncertain in the second half of 2026, with tariff headwinds and logistics cost volatility likely to persist," Shein's Chairman Sky Xu said in a filing to the Hong Kong Stock Exchange.

In the second quarter, adjusted net margin fell sharply from 6.2 percent to 2.1 percent on-year.

"The compression was primarily driven by a sharp spike in oil prices and freight rates amid Middle East geopolitical tensions," Xu said in its earnings reports.

The company has faced scrutiny over its environmental footprint and allegations of human rights violations and faces growing competition from low-cost e-commerce companies such as Temu and AliExpress.

France imposed a fee this month on ultra-fast fashion that could eventually reach almost 20 euros (around $23) per item, with the European Union abolishing a duty exemption for low-value parcels from July.

Net revenue from Europe fell by 13.9 percent to nearly $3.8 billion for the second quarter, Shein reported.

The decrease "reflects a decline in sales volume as we raised prices and lowered online advertising spending" in anticipation of the removal of the customs duty exemption, the company said.

Another key market, the United States, saw revenue drop by 6 percent in the April-June quarter, reflecting the impact of tariffs.

But Shein also saw 21.6-percent revenue increase in the rest of the world, which was "primarily driven by the growth in order volume and expansion of our customer base, particularly in Latin America".

By June, Shein had an average of 128 million monthly users in the European Union, a decrease of about 28 million from the end of last year.

Shein made a tepid Hong Kong debut after raising $1.7 billion in its high-profile IPO this month, but since then its stock price has dropped more than 27 percent.

Retail analysts said the duty fees have not only driven up the prices of goods but also caused people to shop less frequently.

However, Xu said Shein remained "cautiously optimistic" for the rest of this year.

The fourth quarter -- which includes the November 11 shopping festival, Black Friday, Cyber Monday, and the Christmas season –- remained the "most significant promotional window and should drive a meaningful uplift in orders" to the company, the chairman added.

E.Walker--SFF