Shein cautions over uncertain backdrop after European sales slide

Fast fashion giant Shein said it expects uncertainty to continue through the second half of 2026 as it faces pressure from tariffs and volatile logistics costs, after reporting a slide in European sales.

The company said total net revenue rose 0.9% to $11.08bn (£8.36bn) in the three months to 30 June, compared with the same period a year earlier. A 3.4% fall in product sales was offset by increased revenue from its service operations, supported by growth in its online marketplace.

Net revenue in the US fell 6% during the quarter, although Shein said this was a smaller decline than the 14.3% drop recorded in the first quarter and pointed to a recovery in the region.

European revenue fell 13.9% to $4.38bn (£3.3bn). Shein linked the decline to customers increasingly using its marketplace services and lower volumes after it raised prices and reduced online advertising spending ahead of the removal of the European Union's customs duty exemption for parcels worth €150 or less.

The EU removed the exemption at the start of July, following a similar measure in the US. The UK government has said it will remove a comparable customs duty relief for packages worth less than £135 in October 2028.

Shein reported the figures in its first trading update since floating on the Hong Kong Stock Exchange at the start of September. Chairman and chief executive Yangtian Xu said tariff pressures and logistics cost volatility were likely to persist, but added that the fourth quarter, including 11.11, Black Friday, Cyber Monday and the Christmas season, remained the group's most significant promotional period.

Xu said Shein remained cautiously optimistic about adjusted net income in the second half of 2026, alongside ongoing cost optimisation and productivity initiatives.