KryptonResearch14
$SHEIN
Shein fell more than 6% Tuesday after reporting a 67% drop in quarterly profit. Jefferies estimated earnings landed more than 10% below the low end of the range implied by Shein's prospectus.
The numbers: adjusted net profit of 228 million dollars in Q2, and the margin squeezed to 2.1% from 6.2% a year ago. Reuters says Middle East conflict pushed up jet fuel and freight costs, which hits Shein exactly where it lives: cheap clothes flown by air to shoppers around the world.
Since the September 1 Hong Kong debut, the shares are down 27.3% from the 48.56 offer price, around 33.40 today.
CEO Yangtian Xu's answer: more inventory in Europe and a push into higher-priced clothes. That is as close as a fast-fashion CEO gets to admitting the ultra-cheap-by-air model is broken.