Shein's underlying profits fell by two-thirds in the second quarter as the fallout from the Iran war and new import duties took a heavy toll on the fast-fashion retailer, adding to its difficult start to life as a public company. In its first results since listing on the Hong Kong Stock Exchange, Shein reported that adjusted profits declined 66.6 per cent year on year to $228mn, while revenue grew less than 1 per cent to $11.1bn.

Xu Yangtian, the company's chair and founder, said that the drop in profitability was "primarily driven by a sharp spike in oil prices and freight rates amid Middle East geopolitical tensions" in a statement on Monday evening. "We expect the external environment to remain uncertain in the second half of 2026, with tariff headwinds and logistics cost volatility likely to persist," he added.

The China-founded company, which sells cheap clothes made in the country directly to consumers in the west, floated at a cut-price valuation of about $26bn at the start of this month. The highly anticipated market debut came after a years-long quest to join public markets in New York, London and Hong Kong. Shein's shares have since fallen almost 28 per cent, further pressuring a valuation that was already dented by concerns over how rising international trade levies will affect its business model.

The Singapore-domiciled retailer grew rapidly during the Covid-19 pandemic, buoyed by social media hype and booming demand from bored young consumers stuck indoors. That propelled it to a valuation of $100bn in a 2022 funding round, briefly making it the world's third-largest private company.