Fast fashion giant Shein has said it expects uncertainty to continue through the second half of this year in the face of pressure from tariffs and volatile logistics costs.
It came as the company revealed a slight uptick in revenues despite a slump in sales in Europe, driven by higher prices following the removal of an EU tax exemption on small parcels.
Shein revealed its latest performance in its first trading update since floating on the Hong Kong Stock Exchange at the start of this month.
Total net revenues lifted by 0.9% to 11.08 billion US dollars (£8.36 billion) for the three months to June 30, compared with the same quarter a year earlier.
A 3.4% drop in product sales was offset by a jump in revenues from its service operations, supported by the growth of its online marketplace operation.
In the US, net revenues fell by 6% for the quarter after being dented by US tariff measures.
The company highlighted that this represented a shallower decline than the 14.3% drop in the first quarter, suggesting it pointed towards a “recovery” in the region.
Shein also reported that revenues in Europe slid by 13.9% to 4.38 billion US dollars (£3.3 billion) for the quarter.
The group said this was linked to customers increasingly using its marketplace services as well as in impact from lower volumes after it “we raised prices and lowered online advertising spending” ahead of the removal of the EU’s custom duty exemption on parcels of 150 euros or less.
The EU removed the tax exemption at the start of July following a similar measure in the US.
The UK government has said it will remove a similar customs duty relief, on packages worth less than £135, in October 2028.
In a statement, chairman and chief executive Yangtian Xu said: “We expect the external environment to remain uncertain in the second half of 2026, with tariff headwinds and logistics cost volatility likely to persist.
“That said, the fourth quarter – encompassing 11.11, Black Friday, Cyber Monday, and the Christmas season – remains our most significant promotional window and should drive a meaningful uplift in orders.
“Alongside ongoing cost optimisation and productivity initiatives, we remain cautiously optimistic on adjusted net income prospects in the second half of 2026.”
