By midday, the stock had recovered slightly but remained down 10.9 percent. These results mark Shein's first financial report since its initial public offering this month, which valued the company at approximately $26.3 billion, considerably less than its $100 billion valuation during private fundraising in 2022.

Shein reported a 13.9 percent decrease in net revenue from Europe in the second quarter, attributing it to a decline in sales volume after price increases and reduced online advertising. The United States market also saw a six percent revenue drop in the same period, influenced by tariffs.

Since its debut on the Hong Kong Stock Exchange in September, Shein's share price has fallen by more than 35 percent. Analysts note that the company's strategy to absorb freight and tariff costs rather than raise prices could impact its competitive position and lead to higher short-term logistics costs as it localizes stock in Europe.