The news: Shein's draft Hong Kong listing document shows fulfillment expenses reached 47.7% of net revenue in the first quarter, up from 42.8% a year earlier.
US revenue fell 14.3% to $2 billion over the same period.
The mechanism: Shein attributes the pressure to the repeal of the US de minimis exemption in May 2025. The company says it has been passing the majority of the added tariff costs to shoppers by raising its US prices since that month.
By the numbers: The filing's other first-quarter figures:
Fulfillment expenses: $4.32 billion, up from $3.83 billion.
Total revenue: $9 billion, up 1.1%, with the US share falling to 22.5% from 26.6%.
Operating profit: $258 million, down 26%, with operating margin narrowing to 2.9% from 3.9%.
Net loss: $99 million, which includes a $328 million non-cash fair-value charge on convertible redeemable preferred shares, not an operating cost.
The FTC disclosure: Shein disclosed that its US operations are under investigation by the Federal Trade Commission, that it is cooperating, and that an outcome could require "significant monetary payments" with a material effect on its financial condition. Shein did not specify what the FTC is examining, and the agency declined to comment.
The model shift: Shein built its US business on parcels shipped direct from Chinese suppliers to shoppers under the $800 de minimis threshold. Shein says it is now increasing locally held inventory and expanding partnerships with local fulfillment companies to reduce its exposure to cross-border duties.
