Shein eyes bumper $2.6 billion profit in 2025 despite US tariffs

Hong Kong – Shein Group has told investors it is expecting a bumper US$2 billion (S$2.6 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 US President Donald Trump’s punitive tariffs.

The Singapore-based e-commerce giant is 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.

The US$2 billion net income guidance for 2025 suggests profit could nearly double from the US$1.1 billion it reported for 2024.

It builds on a strong first quarter when net income topped US$400 million and revenue jumped to nearly US$10 billion as US consumers rushed to buy its products before Mr 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 (IPO) , 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 is unclear if one-off factors contributed to the number.

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.

The

French government said this week it would suspend Shein’s online marketplace

in the country, following complaints over sales of child-like sex dolls and weapons on its platform.

Shein’s long-anticipated IPO still needs Beijing’s sign-off. Although headquartered in Singapore, it remains subject to oversight by the China Securities Regulatory Commission, which requires all firms with substantial links to the country to undergo review before listing abroad.

The company is trying to list in Hong Kong after previous attempts for an IPO in New York and London were derailed by political scrutiny and regulatory hurdles.

Once valued at US$100 billion, Shein has seen its valuation slide. After a US$66 billion valuation in a funding round in 2023, the company is under pressure to cut that figure by half, Bloomberg News reported in February. Investors include IDG Capital, Mubadala Investment and HSG, formerly known as Sequoia Capital China. BLOOMBERG