Luckin Coffee Inc. Announces Third Quarter 2024 Financial Results
Quarterly Revenue Exceeded RMB10 Billion; Year-on-Year Increase of 41.4%
Profitability Improved with GAAP Operating Margin of 15.3%
1,382 Net New Store Openings; Ended Quarter With More Than 21,300 Stores
BEIJING, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Luckin Coffee Inc. ("Luckin Coffee" or the "Company") (OTC: LKNCY) today announced its unaudited financial results for the three months ended September 30, 2024.
THIRD QUARTER 2024 HIGHLIGHTS(1)
-- Total net revenues in the third quarter were RMB10,180.8 million
(US$1,452.1 million), representing an increase of 41.4% from RMB7,200.0
million in the same quarter of 2023.
-- Net new store openings during the third quarter was 1,382, resulting in a
quarter-over-quarter store unit growth of 6.9% from the number of stores
at the end of the second quarter of 2024, ending the third quarter with
21,343 stores which include 13,936 self-operated stores and 7,407
partnership stores.
-- Average monthly transacting customers in the third quarter was 79.8
million, representing an increase of 36.5% from 58.5 million in the same
quarter of 2023.
-- Revenues from self-operated stores in the third quarter were RMB7,501.4
million (US$1,069.9 million), representing an increase of 45.9% from
RMB5,141.0 million in the same quarter of 2023.
-- Same-store sales growth for self-operated stores in the third quarter was
negative 13.1%, compared to positive 19.9% in the same quarter of 2023.
-- Store level operating profit - self-operated stores in the third quarter
was RMB1,745.6 million (US$249.0 million) with store level operating
profit margin of 23.3%, compared to RMB1,185.4 million with store level
operating profit margin of 23.1% in the same quarter of 2023.
-- Revenues from partnership stores in the third quarter were RMB2,341.3
million (US$333.9 million), representing an increase of 27.2% from
RMB1,840.8 million in the same quarter of 2023.
-- GAAP operating income in the third quarter was RMB1,557.5 million
(US$222.1 million), representing a GAAP operating margin of 15.3%,
compared to RMB961.7 million, or a GAAP operating margin of 13.4%, in the
same quarter of 2023. Non-GAAP operating income in the third quarter,
which adjusts for share-based compensation expenses, was RMB1,655.6
million (US$236.1 million), representing a non-GAAP operating margin of
16.3%, compared to RMB1,025.5 million, or a non-GAAP operating margin of
14.2%, in the same quarter of 2023.
-- Additional information on international business. The Company recognizes
the importance of the international market and is actively pursuing
global expansion. The international market encompasses diverse regions,
each requiring long-term investment before realizing substantial
financial returns.
We have strategically chosen Singapore as the launch point for our international expansion, given its status as a key hub in Southeast Asia. Our first store in Singapore opened in 2023, and in the third quarter, we added eight new stores, bringing the total to 45 self-operated stores. We are also actively evaluating opportunities in the United States and other markets. Given the maturity, saturation, and competitiveness of the U.S. coffee market, we intend to approach our expansion strategy there with careful consideration and a disciplined execution plan.
For the nine months ended September 30, 2024, net revenues from Singapore reached RMB91.4 million, while costs and expenses, primarily including store operations, regional expenses, and support costs incurred at headquarters, totaled approximately RMB167.7 million. We remain committed to investing in our international growth, although we do not anticipate profitability in this area in the near term. Similar to our strategy in China, the international business will need to reach significant scale to achieve profitability.
COMPANY STATEMENT
"I'm pleased to report that Luckin delivered outstanding results in the third quarter of 2024," said Dr. Jinyi Guo, Chairman and Chief Executive Officer of Luckin Coffee. "With the hard work and dedication of our team and the loyalty of our customers, we achieved record net revenue and operating profit while maintaining a healthy margin. Despite the many coffee options available in China, Luckin remains a preferred choice for customers, as reflected in our record average monthly transaction user count and the addition of 1,382 net new stores. In line with our commitment to invest in a high-quality supply chain and boost efficiency, we also broke ground in August on our new state-of-the-art Innovation and Production Center in Qingdao, a strategically important economic hub in China. Looking forward, we are focused on continuing to expand our market share by offering innovative, high-quality products, enhancing brand recognition, and expanding our footprint."
CHANGES TO BOARD OF DIRECTORS (THE "BOARD")
Mr. Gary (Shaoqiang) Liu, a director of the Company, has resigned from his positions on the Board for personal reasons. Mr. Guiyi Chen has been appointed as a new director and a member of the Compensation Committee.
"I am grateful to Mr. Gary Liu for his valuable contributions during his tenure and wish him all the best in his future endeavors," said Dr. Jinyi Guo, Chairman and Chief Executive Officer of Luckin Coffee. "I am also pleased to welcome Mr. Guiyi Chen to our Board and look forward to collaborating with him as we pursue our mission and deliver sustainable, long-term value to our shareholders."
Mr. Guiyi Chen brings extensive experience in law, banking, investment, and management, with expertise in both domestic and international capital markets. He is currently a managing director at Centurium Capital Management (HK) Ltd ("Centurium Capital"). Prior to joining Centurium Capital, Mr. Chen held senior roles at Jingtian & Gongcheng LLP, W&G Investment Management Co., Ltd., and Loeb & Loeb LLP. Mr. Chen holds a bachelor's degree in legal studies from the China Youth University of Political Science and a master's degree in law from the University of Groningen, Netherlands.
THIRD QUARTER 2024 FINANCIAL RESULTS
Total net revenues were RMB10,180.8 million (US$1,452.1 million) in the third quarter of 2024, representing an increase of 41.4% from RMB7,200.0 million in the same quarter of 2023. Driven by the increase in the number of products sold, stores in operation and monthly transacting customers, our net revenues has shown strong increase despite the decrease in average selling price of the Company's products.
-- Revenues from product sales were RMB7,839.5 million (US$1,118.2 million)
in the third quarter of 2024, representing an increase of 46.3% from
RMB5,359.3 million in the same quarter of 2023.
-- Net revenues from freshly brewed drinks were RMB7,210.8 million
(US$1,028.5 million), representing 70.8% of total net revenues in
the third quarter of 2024, compared to RMB4,869.7 million,
representing 67.6% of total net revenues, in the same quarter of
2023.
-- Net revenues from other products were RMB476.9 million (US$68.0
million), representing 4.7% of total net revenues in the third
quarter of 2024, compared to RMB345.3 million, representing 4.8%
of total net revenues, in the same quarter of 2023.
-- Net revenues from others were RMB151.8 million (US$21.6 million),
representing 1.5% of total net revenues in the third quarter of
2024, compared to RMB144.4 million, representing 2.0% of total net
revenues, in the same quarter of 2023.
-- Revenues from partnership stores were RMB2,341.3 million (US$333.9
million), representing 23.0% of total net revenues in the third quarter
of 2024, which represents an increase of 27.2% compared to RMB1,840.8
million, representing 25.6% of total net revenues, in the same quarter of
2023. For the third quarter of 2024, revenues from partnership stores
included sales of materials of RMB1,651.7 million (US$235.6 million),
profit sharing of RMB293.4 million (US$41.8 million), delivery service of
RMB230.4 million (US$32.9 million), sales of equipment of RMB147.1
million (US$21.0 million), and other services of RMB18.8 million (US$2.7
million).
Total operating expenses were RMB8,623.3 million (US$1,229.9 million) in the third quarter of 2024, representing an increase of 38.2% from RMB6,238.3 million in the same quarter of 2023. The increase in total operating expenses was predominantly the result of the Company's business expansion. Meanwhile, operating expenses as a percentage of net revenues was 84.7% in the third quarter of 2024, slightly lower than 86.6% in the same quarter of 2023, mainly due to the decrease in cost of materials as a percentage of net revenues resulting from the changes in product matrix provided to consumers in the third quarter.
-- Cost of materials were RMB3,955.4 million (US$564.2 million) in the third
quarter of 2024, representing an increase of 24.9% from RMB3,166.6
million in the same quarter of 2023, mainly due to the increase in the
number of products sold and the increase in sales of materials to
partnership stores.
-- Store rental and other operating costs were RMB2,284.9 million (US$325.9
million) in the third quarter of 2024, representing an increase of 60.3%
from RMB1,425.5 million in the same quarter of 2023, mainly due to the
increase in labor costs, store rental as well as utilities and other
store operating costs as a result of the increased number of stores and
items sold in the third quarter of 2024 compared to the same period last
year.
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