Shein Eyes $2 Billion Profit in 2025 Despite US Tariff Headwinds-awdailynews

webadmin

2025-11-07

Shein Eyes $2 Billion Profit in 2025 Despite US Tariff Headwinds

A shopper browses clothing at Shein's new Paris store. — A shopper browses clothing at Shein’s new Paris store.

(Bloomberg) — Shein Group Ltd. has told investors that it’s expecting a bumper $2 billion in net income in 2025, after higher profit margins through price hikes and cost-cutting helped overcome a drop in online traffic caused by President Donald Trump’s punitive tariffs.

The Singapore-based e-commerce giant is also forecasting mid-teen percentage growth in sales, according to people familiar with the matter, who asked not to be identified as the targets are private.

Most Read from Bloomberg

The $2 billion net income guidance for this year suggests profit could nearly double from the $1.1 billion it reported last year. It builds on a strong first quarter when net income topped $400 million and revenue jumped to nearly $10 billion as US consumers rushed to buy its products before Trump dismantled the ‘de minimis’ tax exemption for small parcels.

The upbeat full-year outlook — issued in late August — comes as Shein works to retain investor confidence ahead of a long-delayed initial public offering, which remains clouded by uncertainty. The forecast is surprisingly rosy, given its business was expected to take a hit after the ‘de minimis’ loophole was closed. It’s unclear if one-off factors contributed to the number.

Bigger Western fashion retailers that have been undercut by Shein over the years are expected to see far more moderate growth this year. Inditex, the parent of Zara, is set to see an 8.6% growth in net income this fiscal year, while H & M Hennes & Mauritz AB’s net income is expected to jump 8.8%, according to analyst consensus compiled by Bloomberg.

But it appears that the company’s price hikes have passed the tariff burden to shoppers, protecting its bottom line. Pulling back on aggressive advertising spending, a strategy made possible by rival Temu’s reticence in the US market for much of the summer, also boosted margins, one of the people said.

Still, the company faces tremendous headwinds as it seeks to list publicly, such as the fact that several other countries are also planning to follow the US’ example and drop the duty-waivers for small parcels. Separately, the French government also said this week said it would suspend Shein’s online marketplace in the country, following complaints over sales of childlike sex dolls and weapons on its platform.