Shein posts Q1 loss ahead of Hong Kong IPO

Shein reported a $99 million net loss for the first quarter of 2026, marking a reversal from profitability a year earlier. The draft Hong Kong listing prospectus shows that the fast-fashion retailer generated $9.05 billion in revenue in the quarter, a 1.1% increase from $8.95 billion in the same period of the previous year. The figures highlight that while top-line growth continued, profit margins came under pressure.

A key factor behind the loss was $328 million in fair-value losses on convertible redeemable preferred shares. These accounting losses weighed on the company’s bottom line and contributed significantly to the overall net deficit for the quarter.

Shein attributed part of its earnings pressure to changes in U.S. import rules. The removal of the de minimis duty-free exemption in May 2025 has had what the company described as an adverse impact on U.S. sales and overall growth. The exemption had previously allowed low-value packages to enter the United States without import duties.

Following the policy change, Shein stated that China-origin products sold by it or through its marketplace and shipped to U.S. customers are now subject to tax rates ranging from 10% to 87.5%. The company said this has contributed to higher expenses, adding another drag on profitability in its latest reported quarter.

The draft prospectus lays the groundwork for investor roadshows and official bookbuilding for a planned Hong Kong share sale. It does not specify the size of the offering, the offer price, the exact listing timetable, or the expected proceeds. These details are expected to be set at a later stage in the process.

Shein received approval from the China Securities Regulatory Commission for its Hong Kong listing application on July 10, 2026. This regulatory clearance paves the way for the company to pursue a listing in Hong Kong after earlier attempts to list in New York and London did not proceed.

The prospectus lists founder Sky Yangtian Xu as chairman and chief executive, formalizing his leadership roles as the company prepares for the offering. Donald Tang, who had previously served as executive chairman, is not included among Shein’s directors or senior management in the filing, indicating a streamlined top management structure in the document.

Goldman Sachs (GS), Morgan Stanley (MS) and JPMorgan Chase (JPM) are named as joint sponsors of the proposed Hong Kong listing. Their involvement signals the company’s engagement with major global investment banks as it moves toward a potential public offering in one of Asia’s key financial markets.