Shein's U.S. sales fall 14.3% as new duties and rival sub-$25 lines narrow its price lead

Add the $328 million fair-value charge back to the $99 million loss and Shein earned about $229 million in the quarter ^[5][4][22]. That is $166 million, or roughly 42%, below the $395 million it made a year earlier ^[23], on revenue that grew 1.1% ^[2].

The sales split shows where the damage is. U.S. sales fell 14.3% while the total still rose ^[3][2], so sales outside the U.S. grew by enough to cover the gap ^[25]. Quartz does not give a regional split, or the size of the listing it called "diminished" ^[7].

The U.S. drop has two readings. As a policy shock it is a one-off: the duty-free exemption was part of how Shein kept items regularly under $20 ^[9][10], prices have been reset, and the hit fades once a full year has passed. Quartz takes the longer view. "Cheap, fast, and constantly changing used to be Shein's particular advantage. Now they're expectations that almost every fashion company has to contend with," the publication wrote ^[6]. A third reading, that the loss is an accounting artefact, is half right. The charge explains why the number is negative, and the 42% fall in underlying profit is still there ^[22][23].

I think Quartz has the U.S. right. Shein raised prices into a market where shoppers now have Temu, Amazon's Haul and Walmart's Scenario to turn to ^[10][12]. The counter-thesis sits in the 1.1%: if cheap and fast were a commodity everywhere, Shein would not still be growing outside the U.S. ^[25]. The view is wrong if U.S. sales stop falling once the higher prices are in the prior-year base, because that would make the drop a price reset with the customers still there.

If price no longer separates Shein, assortment is what is left to value. Its prospectus counts more than 2 million distinct items, with 4,700 new pieces added every day ^[8]. Incumbents are putting money into the bottom of the market ^[12][13]. Inditex is taking Lefties, its cheapest chain, into Britain and plans to launch it in Germany ^[13].

The pressure moves up the price ladder to brands charging $100 or $200 for a pair of pants ^[20]. Clothing has become about 16% cheaper relative to everything else since 2019 ^[24]. Fabric is roughly 60% of a garment's production cost ^[15], so materials are where brands went looking for savings ^[14]. Urban Outfitters told investors its responses included better vendor terms, changes to how it ships and raising prices "gently" ^[18]. Express, a mall chain priced in the middle of the market, filed for bankruptcy in 2024 after its sales had been falling for years ^[19].