Shein Raises Prices After US Tariff Removal; Q1 2025 US Revenue Down 14%, Loss $99 Million

Shein said in its IPO filing that it raised prices on goods sold in the United States from May 2025 to offset the added tariff costs, leading to a slowdown in sales. US revenue declined by more than 3% between 2024 and 2025, and first-quarter 2025 sales fell 14% year on year. The company had long denied relying on a loophole in trade rules, but after the tariff exemption was removed, its low-price model came under pressure.

The tariffs raised Shein's effective tax rate from a range of 0% to 62.5% to a new range of 10% to 87.5%. Overall profitability fell 39% between 2024 and 2025, with the first quarter of 2025 swinging to a net loss of US$99 million, compared with a profit of US$395 million in the same period a year earlier. Rising costs directly hit profit margins, and despite the price increases, Shein was unable to fully offset the impact.

In Europe, the exemption for low-value parcels was removed in July 2025, replaced by a flat tariff of 3 euros per product category. European sales grew 9% in 2025, down from 33% growth between 2023 and 2024, and first-quarter growth was just 2%. Europe accounted for 35% of Shein's revenue in 2025.

To counter the slowdown, Shein is expanding its third-party marketplace and brand-enablement services. Service revenue grew nearly 40% in 2025, and the operating margin for brand-enablement services was roughly double the group average. One brand saw sales grow about 15-fold in its second year of partnership, with operating margin improving by 30 percentage points and inventory turnover days falling by about two-thirds. These businesses still represent a small share of revenue but are growing rapidly.