Fast-fashion giant Shein has reported a quarterly net loss of $99 million (£74.1 million) for the first three months of the year, marking a sharp decline from the $395 million profit recorded during the same period last year. The financial reversal follows the removal of a crucial US import duty exemption that previously allowed low-cost goods to enter the American market tax-free.
The shift in profitability stems largely from an executive order signed by US President Donald Trump, which ended the "de minimis" rule on August 29, 2025. This rule had previously exempted imported packages valued at $800 or less from tariffs and administrative fees. Online shoppers in the United States relied heavily on the rule to purchase cheap apparel and goods from platforms like Shein and Temu. US officials stated that the exemption was removed to prevent tariff evasion and curb the influx of illicit synthetic opioids.
In response to the increased costs, Singapore-headquartered Shein stated in a financial filing that it is pursuing several strategies, including raising prices for US consumers to offset duty expenses. The company noted that the loss of the US duty exemption adversely affected both its sales volume and overall revenue growth in North America.
Beyond US tariff policy, Shein faced additional headwinds during the quarter. The company cited conflict in Iran for suppressing consumer demand, raising logistics costs, and delaying product deliveries across certain markets. Furthermore, the first-quarter results included a paper loss of $328 million resulting from an accounting change related to convertible investor shares ahead of the company's planned initial public offering (IPO).
Despite the quarterly loss, Shein's core user base continued to expand. In the twelve months ending March 2026, the retailer reached 281 million active customers—a 16% increase year-over-year—who placed more than one billion orders. Shein is currently preparing for a public stock listing in Hong Kong, having recently secured approval from the China Securities Regulatory Commission after earlier listing efforts in New York and London stalled. Meanwhile, global regulatory pressure on fast fashion continues to grow, with the European Union recently introducing a €3 levy on low-value e-commerce imports to counter what it describes as unfair market competition.