- Shein reported a $99 million net loss in Q1, down from $395 million profit last year
- The loss was partly due to US trade policy changes increasing import costs and tariffs
- Revenue grew 1.1% year-on-year to $9.05 billion in the January-March quarter
Online fast-fashion retailer Shein has reported a $99 million net loss for the first quarter of this year, marking a sharp reversal from the $395 million profit it posted a year earlier, according to its draft prospectus for a planned Hong Kong listing.
Reuters reported that the filing offers investors their first detailed look at the company's financial health as it prepares one of the year's most closely watched IPOs.
The Singapore-headquartered retailer, founded in China, has not disclosed the size, pricing or timeline of the proposed share sale. The filing is the first formal step towards investor roadshows and book-building for the offering, according to the prospectus.
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The company attributed the pressure largely to changes in US trade policy. Shein said the Trump administration's removal of the de minimis duty-free exemption has hurt its US business by increasing import costs and slowing sales growth.
The rule had previously allowed shipments valued below $800 to enter the US without import duties. According to the filing, China-made products shipped to US customers are now subject to tariffs ranging between 10% and 87.5%.
The company said the policy change has had an adverse impact on US sales, overall growth and operating expenses.
Despite slipping into the red, Shein's top line remained largely resilient. Revenue rose 1.1% year-on-year to $9.05 billion in the January-March quarter from $8.95 billion a year earlier.
The company said the quarterly loss also reflected a $328 million fair-value loss linked to convertible redeemable preferred shares. Such accounting adjustments are common before public listings and do not necessarily reflect day-to-day business operations.
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Shein received approval from the China Securities Regulatory Commission (CSRC) on July 10 to pursue a Hong Kong listing, paving the way for its latest IPO attempt after earlier plans in New York and London failed to materialise.
The draft prospectus identifies founder Sky Yangtian Xu as Chairman and Chief Executive Officer. Executive Chairman Donald Tang, however, does not appear among the company's directors or senior management in the filing.
Investment banks Goldman Sachs, Morgan Stanley and JPMorgan are acting as joint sponsors for the proposed listing, the prospectus showed. The company has not yet revealed how much it plans to raise from the offering.
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