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Shein Shares Drop 14% to Record Low Following Post-IPO Profit Decline
The retailer said higher fulfilment costs and new Europe parcel fees squeezed margins to 2.1%, while Jefferies said earnings missed estimates by more than 10%.
- Fast-Fashion retailer Shein saw its Hong Kong-listed shares tumble up to 14% to an all-time low of HK$31.44 following the release of its inaugural earnings report since going public.
- The company reported a 67% year-on-year drop in second-quarter adjusted net profit to $228 million, while overall revenue grew by just 0.9% amid stagnating sales in key Western markets.
- Profitability was significantly squeezed by escalating jet fuel and air-freight costs driven by Middle East conflicts, reducing quarterly net margins from 6.2% down to 2.1%.
- European sales experienced sharp declines following price hikes and reduced marketing spend implemented ahead of new €3 product category fees levied by the European Union on low-value e-commerce imports.
- The stock drop erased over $9 billion from Shein's market valuation since its September 1 debut, prompting management to announce plans to expand local European inventory and move into higher-margin apparel lines.
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103 Articles
103 Articles
Shein Loses More Than a Third of IPO Value as US Sales Fall, Profits Plunge
The signage of cross-border fast fashion e-commerce company SHEIN at a garment factory in Guangzhou, in China's southern Guangdong Province, on July 18, 2022. (Jade Gao/AFP via Getty Images)
·New York, United States
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In the markets, where it entered less than a month ago, as in its results, the Chinese giant is experiencing a significant decline, but it is only the emerging part of a system that requires a complete overhaul.
·Paris, France
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Shares of fast-fashion's Shein plunge 14% to record low after profit slides
·London, United Kingdom
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Regulatory hardening: Shein's action deviates by more than 11%
·Montreal, Canada
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Total News Sources103
Leaning Left13Leaning Right14Center21Last UpdatedBias Distribution44% Center
Bias Distribution
- 44% of the sources are Center
44% Center
L 27%
C 44%
R 29%
Factuality
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