Introduction:In the second quarter of 2022, Luckin Coffee delivered an impressive performance, with total revenue soaring by more than 70% year-on-year and officially surpassing Starbucks in number of stores, solidifying its position as the leading coffee chain in the Chinese market. This article will take you through a deep dive into its financial highlights, store expansion strategy, key factors behind same-store sales growth, and its competitive positioning amid pressure from both domestic and international brands.
Luckin Coffee once again demonstrated strong growth momentum in the second quarter of 2022, not only maintaining the momentum from the previous quarter but also setting new records in both revenue and store scale. According to its official financial report, the quarter's total net revenue reached RMB 3.2987 billion, up from RMB 1.9137 billion in the same period of 2021.72.4%Operating profit also turned from a loss to a profit, indicating that its core business operations have gradually returned to normal.
Amid the ongoing impact of the pandemic on the food and beverage industry, Starbucks released its third-quarter financial report on August 2, 2022, showing a significant decline in same-store sales in China.44%Net revenue also dropped sharply.40%In contrast, Luckin not only narrowed the gap with Starbucks but also secured its position as the largest coffee chain brand in China, thanks to its rapid store expansion and robust revenue performance.
On August 8, Luckin officially released its second-quarter financial report, revealing its outstanding business results. Even in the face of strict epidemic control measures in some cities and the overall impact on the food and beverage industry, Luckin achieved“counter-cyclical growth.”It not only further narrowed the revenue gap with Starbucks but also achieved a critical turning point where operating profit turned from a loss to a profit.
Financial data shows that the quarter's total net revenue for Luckin reached RMB 3.2987 billion, representing a year-on-year increase.72.4%；615 net new stores were added during the quarter, bringing the total number of stores toThe company added 615 net new stores during the quarter, bringing the total number of stores to7,195
by the end of the second quarter, including 4,968 company-operated stores and 2,227 licensed stores. In comparison, Starbucks China added only 107 stores in the previous quarter, making Luckin’s expansion speed notably faster.In terms of customer and store performance, Luckin’s monthly average transaction customers reached20.7 million,68.6%a year-on-year increase.52.4%Revenue from company-operated stores amounted to RMB 2.3311 billion, up41.2%year-on-year, with same-store sales growth reaching30.6%and store-level profit margin surging to
, both hitting significant new highs. For the same period last year, these two figures were RMB 353.2 million and 23.1%, respectively.178.4%Licensed stores also performed well, with second-quarter revenue reaching RMB 777.5 million, a substantial increase of
from RMB 279.3 million in 2021, demonstrating the continued strong expansion potential of its franchising model.7.3%From a financial perspective, Luckin recorded an operating profit of RMB 241.6 million (approximately USD 36.1 million) under U.S. GAAP in the second quarter, with an operating profit margin of10.4%, compared to a loss of RMB 47.5 million in the same period last year. Excluding share-based compensation expenses, the non-GAAP operating profit was RMB 342.6 million (approximately USD 51.2 million), with an operating profit margin of
, reflecting further improvement in operational efficiency.Despite the strong performance, Luckin still faces the aftermath of its past financial fraud incident. The financial report stated that the company paidRMB 276.8 millionin equity litigation reserves andRMB 101.8 million
in income tax expenses in the second quarter. Industry insiders believe that such expenses are mostly one-time items and have limited impact on long-term operations.
From a market perspective, Luckin’s core business has largely returned to normal, and whether it will pursue a transfer to a higher-tier stock exchange has become a focus of market attention. It is understood that transferring requires meeting criteria including net assets, market capitalization, number of outstanding shares, a minimum share price of USD 4 over 90 consecutive trading days, over 300 shareholders, and at least three market makers. Luckin currently meets most of these transfer requirements.
Additionally, while releasing its financial report, Luckin also announced a high-level management change, with Ms. An Jing taking over as Chief Financial Officer. CEO Guo Jinyi stated during the subsequent earnings call that he looks forward to An Jing’s contribution in leading Luckin to a higher level of development.
The above content is compiled by CoffeeHunters, a coffee news website.
