Shein IPO filings reveal U.S. sales plunge, warn of European repeat

Shein disclosed in filings ahead of its Hong Kong initial public offering that U.S. tariffs have forced price increases that dragged down American sales, and warned that a similar dynamic could soon spread to Europe, its largest market.

The fast-fashion retailer said it began passing the majority of additional tariff costs onto U.S. consumers through higher prices starting in May 2025, a move that contributed to a more than 3% decline in U.S. revenue between 2024 and 2025. The deterioration accelerated in the first quarter, with American sales falling 14% year over year, according to the company's IPO documents reported by CNBC.cnbc

"Although it remains too early to fully assess, it is possible that trends in the EU could be generally in line with or exceed the impact observed in the U.S. after the removal of the de minimis exemption there," Shein stated in the filing.qz+1

Europe's Tariff Threat

The European Union in July scrapped its own duty-free treatment for low-value parcels, replacing it with a flat-rate levy of 3 euros per product category in a shipment. Europe accounted for 35% of Shein's 2025 revenue, but growth there had already decelerated — from 33% in 2024 to about 9% in 2025, slowing further to just 2% in the first quarter.qz+1

Companywide, profit fell 39% between 2024 and 2025. In the most recent first quarter, Shein swung to a $99 million loss from a $395 million profit a year earlier. Full-year 2025 revenue reached $41.85 billion, up 8% but well below the 20.7% growth recorded in 2024.qz

Supply Chain Retreat and Strategic Pivot

Shein has also sharply scaled back a warehouse expansion in Vietnam that was designed to shield it from China-specific tariffs. According to reporting by Mezha Media, the company reduced its leased warehouse space near Ho Chi Minh City from 15 hectares to six, with mass layoffs beginning in April. Suppliers who relocated to Vietnam have largely returned to China, where CEO Sky Xu has pledged to invest more than 10 billion yuan in an intelligent supply-chain system in Guangdong province.mezha

Angela Lee, a professor of venture capital at Columbia Business School, told CNBC that the regulatory changes represent a fundamental threat. "They are losing access to a regulatory advantage that was built into their business model at the very center," she said.cnbc

Shein is now targeting a valuation of $30 billion to $40 billion for its Hong Kong listing — a fraction of the $98.2 billion investors assigned it in a 2022 funding round — while expanding higher-margin services such as brand enablement, which grew about 40% in 2025 but still accounts for roughly 1% of total revenue.qz+1