Shein Group Ltd. is expecting a net income of $2 billion in 2025, nearly double the $1.1 billion it reported last year, buoyed by higher profit margins from price increases and cost-cutting measures that helped offset a drop in online traffic caused by President Donald Trump’s punitive tariffs. The Singapore-based retailer is also forecasting mid-teen percentage growth in sales, according to people familiar with the matter who spoke to Bloomberg on condition of anonymity.
The company’s bullish outlook builds on a strong first quarter, when net income surpassed $400 million and revenue approached $10 billion as US consumers rushed to purchase items before the ‘de minimis’ tax exemption for small parcels was eliminated. Shein’s guidance, issued in late August, underscores its efforts to reassure investors ahead of a long-delayed initial public offering, which remains uncertain amid regulatory scrutiny and geopolitical pressures. Analysts note that while price hikes have allowed Shein to pass tariff costs onto shoppers, the company is still facing challenges as other countries consider removing duty waivers for small parcels, and as France recently suspended its online marketplace over complaints about controversial products.
Shein’s IPO ambitions continue to face hurdles, including oversight from the China Securities Regulatory Commission, which requires approval for Chinese-linked firms listing abroad. After failed attempts to list in New York and London, the company is now targeting Hong Kong. Once valued at $100 billion, Shein’s valuation has fallen, with a $66 billion funding round in 2023 reportedly cutting its expected market value nearly in half, Bloomberg News reported. Investors include IDG Capital, Mubadala Investment Co., and HSG, formerly Sequoia Capital China. The company did not immediately respond to requests for comment.
