The Chinese coffee chain opened more than 600 stores in the last three months, achieving 66% year-on-year third quarter revenue growth
The 9% quarter-over-quarter store unit growth was cited as the key contributor to Luckin Coffee’s RMB 3.9bn revenues | Photo credit: via Shutterstock
Luckin Coffee has credited rapid outlet expansion and a growing customer base for driving its strong third quarter revenues.
In the three months ended 30 September 2022, Luckin generated RMB 3.9bn ($547.5m) revenues – 66% higher than for same period in 2021.
The technology-led coffee chain opened 651 net new stores over the quarter to reach 7,846 locations across China, with nearly 70% of outlets (5,373) company operated.
Nine percent quarter-over-quarter outlet growth was cited as the key contributor to the company’s strong performance.
Robust sales growth was also attributed to increased products sales and a growing consumer-base.
Average monthly transacting customers were reported as 70% higher than the same period in 2021, reaching 25.1 million.
Third quarter profit reached RMB 585.3m ($82.3m), a 15% operating income margin compared to an operating loss of RMB 6.7m ($939,000) in the same quarter of 2021.
“We are pleased to deliver another quarter of improved results, with continued improvements across our key operating and financial metrics. Despite a normalisation of same-store sales growth in line with our expectations, comparable store growth remained strong in the third quarter. We continued to leverage our operating efficiency and increasing scale to further improve our profitability profile, reporting a 15% operating profit margin in the third quarter,” said Dr. Jinyi Guo, CEO, Luckin Coffee.
Luckin Coffee’s operations continue to be negatively affected by government trading restrictions.
The company said daily store closures had reduced to approximately 108 at the start of the quarter. However, following new cases reported across the country in recent weeks, the number of average daily store closures in November 2022 rose to 500.
Luckin Coffee is China’s largest coffee chain, ahead of US brand Starbucks. The Seattle-based coffee chain operates 6,021 stores in the country, as reported in its third quarter results earlier this month.
Former Luckin Coffee executives Charles Lu and Jenny Qian returned to the Chinese coffee market with new coffee shop brand Cotti Coffee in October 2022.
Mirroring Luckin Coffee’s rapid expansion model, the coffee start-up has set an outlandish target to reach 10,000 stores in the next three years.