SHEIN: ORDERS ROSE 6.4% AND REVENUE 1.0%; OPERATING INCOME FELL 52.9% TO US$493M AS FULFILMENT ROSE TO 49.2% OF REVENUE FROM 42.9%
By Pau Almar · Published
H1 2026 · 28 SEPTEMBER 2026
SHEIN's first interim report as a listed company covers the six months to 30 June 2026. Orders rose 6.4% to 549m and net revenues 1.0% to US$20,134m (US$19,940m). Operating income was US$493m (US$1,046m), a margin of 2.4% (5.2%). Reported net income rose 111.7% to US$2,299m (US$1,086m), including a US$1,861m non-cash gain on the preferred shares; the company's adjusted net income was US$499m (US$1,123m). Operating cash flow was US$1,205m, 58.1% lower. Cash resources were US$15,248m at 30 June. The company gives no second-half figure and describes itself as "cautiously optimistic" (p.8). The H1 2025 comparatives were not reviewed by the auditor.
Fulfilment expenses, the largest cost line, rose US$1,348m (+15.7%) to US$9,909m, 49.2% of revenue against 42.9%. Cost of sales fell US$941m and marketing rose US$277m; total operating expenses grew 4.0% against revenue growth of 1.0%. Of the US$553m fall in operating income, US$463m was in the second quarter, when operating income was US$235m against US$698m. Q2 revenue rose US$94m (+0.9%) while fulfilment rose US$857m (+18.1%), 9.12 times the revenue increase and 185.1% of the Q2 fall. Q2 revenue per order fell 6.3% to US$37.19 and fulfilment cost per order rose 9.8% to US$18.75. Service revenue, the fees recognised on marketplace sales, rose to 13.4% of first-half revenue from 10.8%.
// KEY NUMBERS
H1 2026 · six months ended 30 June 2026
| Revenue | USD 20,134m |
|---|---|
| Reported growth | +1% |
| Operating margin | 2.4% |
| Net income | USD 2,299m |
The fair value of the convertible redeemable preferred shares fell by US$1,861m in the half, and the fall is recorded as a gain: it is 80.9% of first-half net income and 91.3% of second-quarter net income. Excluding the gain, profit before tax was US$596m (−55.5%) and net income US$438m (−59.7%). Basic earnings per share were US$0.90 and diluted US$0.11. The preferred shares converted on listing on 1 September 2026, and the company states the adjustment will not apply in future periods (p.19).
The chairman states that, excluding oil and freight costs, the adjusted net margin would have been "broadly similar to a year ago" (p.7). The Q2 adjusted net margin was 2.1% against 6.2%, a gap of US$461m at the prior-year margin. At the Q2 2025 cost per order of US$17.08, order volume accounts for US$359m of the US$857m Q2 fulfilment increase, 41.8%. The remaining US$498m, 108.2% of the margin gap, is the rise in cost per order, which the company attributes to oil and freight costs after the Iran conflict and to marketplace mix (p.11). The report does not split the two.
Free cash flow was US$920m against US$2,640m; income tax paid rose to US$397m from US$131m. US$725m was paid to preferred shareholders in the half, 60.2% of operating cash flow, and about US$2.4bn in cash and 19,622,000 further shares after it (note 2), against net offering proceeds of about US$1.7bn. To watch at the next report: the fulfilment ratio, 50.4% of revenue in Q2 against 43.1%; Europe after the removal of the EUR 150 customs exemption on 1 July 2026, with Q2 European revenue down 13.9%; and cash resources after the listing payments, which the report does not disclose.
// QUESTIONS
How much did SHEIN's revenue grow in the first half of 2026?
SHEIN's net revenues rose 1.0% to US$20,134m in the six months to 30 June 2026, from US$19,940m, while orders rose 6.4% to 549m.
Why did SHEIN's operating income fall in the first half of 2026?
Operating income fell 52.9% to US$493m as fulfilment expenses rose US$1,348m (+15.7%) to US$9,909m, 49.2% of revenue against 42.9%. Total operating expenses grew 4.0% against revenue growth of 1.0%.
Why did SHEIN's net income rise in H1 2026 when operating income fell?
Reported net income rose 111.7% to US$2,299m because it includes a US$1,861m non-cash gain on the preferred shares. Excluding the gain, net income was US$438m (−59.7%).
Source: SHEIN Global Holdings Limited Interim Report 2026, 28 September 2026 (HKEX 2026092801831) ↗
Analysis by Pau Almar, VGR.
VGR analysis is an independent commercial reading of publicly disclosed company information, written from the perspective of a fashion retail sector operator. It is not investment research and it is not advice to buy, sell or hold any security. VGR is not a regulated financial adviser. Figures are taken from official company materials; figures derived by VGR are labelled as such. Readers should reach their own conclusions and take professional advice where appropriate.