Shein warns Europe sales could fall as U.S. tariffs bite

Shein warns Europe sales could fall as U.S. tariffs bite

Mon, August 10, 2026 at 3:29 PM GMT+3 2 min read

Shein warned in IPO filings that the same tariff-driven sales decline battering its U.S. business could spread to Europe, its largest market, as the company prepares for a Hong Kong stock listing, according to CNBC.

In documents submitted ahead of the offering, Shein disclosed that starting in May 2025 it shifted most of the additional tariff burden onto consumers via price increases, a move the company said weighed on its U.S. net revenues through the rest of that year. U.S. revenue slid more than 3% from 2024 to 2025, and the decline steepened to 14% when the most recent first quarter is measured against the same three months of the prior year.

The company cautioned that European trends could match or worsen what it experienced in the U.S. "Although it remains too early to fully assess, it is possible that trends in the E.U. 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 said in the filing.

In July, the European Union scrapped the exemption that had let low-value parcels enter the bloc without customs charges, introducing in its place a fixed levy of 3 euros for each product category in a shipment. Europe represented 35% of Shein's 2025 revenue, and growth there had already been slowing — sales rose about 9% in 2025, down from 33% growth the year before, and climbed just 2% in the first quarter.

The company's overall profitability has deteriorated as the U.S. tariff burden mounted. Goods of Chinese origin that Shein ships to American customers now carry duties ranging from 10% to 87.5%, compared with the prior band of 0% to 62.5%. Companywide profit declined 39% between 2024 and 2025, and in the most recent first quarter Shein recorded a $99 million loss, reversing the $395 million profit it had earned in the equivalent period the prior year.

Shein's filing follows results the company posted last month, which showed full-year 2025 revenue of $41.85 billion — an 8% rise that marked a steep deceleration from 20.7% growth in 2024. The Hong Kong listing received approval from Chinese regulators on July 10, after failed attempts to list in New York and London. Shein is now targeting a valuation of $30 billion to $40 billion for the offering, a fraction of the $98.2 billion investors assigned it during a 2022 funding round.

To offset slowing growth in its core retail business, Shein has been expanding higher-margin services, including what it calls brand enablement services, which lets designers and brands use its supply chain and product infrastructure. That segment's revenue grew about 40% in 2025, though it currently accounts for roughly 1% of total revenue.

A Shein spokesperson declined to comment, according to CNBC.