Key facts
- Shein's adjusted net profit fell 67% to $228 million in the second quarter.
- Shein's net profit margin was squeezed to 2.1% in the second quarter.
- European sales dropped sharply in the second quarter due to price hikes and reduced advertising.
- Shein warned of an uncertain second half.
Shein's shares dropped as much as 4.4% on Tuesday after the fast-fashion retailer reported a 67% fall in quarterly profit, fueling investor concerns over margin pressure and slowing growth. The company's adjusted net profit fell to $228 million in the second quarter, with its net profit margin squeezed to 2.1%. This followed a previously reported net income of $2.40 billion on sales of $11.08 billion for the same period. Shein attributed the sharp drop in European sales to price hikes and reduced advertising, implemented ahead of new European Union fees on low-value e-commerce parcels. The company cautioned about an uncertain second half of the year. Since its September 1 stock market debut in Hong Kong, Shein's shares have fallen 27.3% from the offer price of HK$48.56 ($6.19), trading around HK$33.82 on Tuesday.