Fast-fashion retailer Shein reported a 67% drop in second-quarter adjusted net profit to US$228 million, as conflict in the Middle East raised jet fuel and freight costs, and weaker sales in Europe squeezed margins in its first results since listing in Hong Kong.

Sales rose 0.9% to US$11.08 billion in the quarter ended June. Growth in Latin America offset declines in larger markets. In Europe, revenue fell 13.9% to US$3.77 billion after Shein raised prices and cut online advertising.

The regional decline matters because Europe was central to Shein’s IPO case.

Shein’s Hong Kong listing valued the company at about US$26.5 billion. The stock has fallen 27.3% from its HK$48.56 (US$6.2) offer price since September 1.

Shein said it raised prices and cut ads ahead of the European Union’s 3-euro fee on low-value ecommerce parcels.

The company also said it is adding warehouse capacity in Poland and plans to sell higher-priced clothing, and expand its brands, including through acquisitions.

🔗 Source: Reuters

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