The value-focused coffee chain has continued its strong momentum following quarter-on-quarter sales and outlet growth of 32% and 16% respectively
Luckin Coffee opened 1,485 net new stores in the three months ended 30 June 2023 | Photo credit: Luckin Coffee Singapore
China’s Luckin Coffee has credited accelerated outlet expansion for driving record sales and profits in its second quarter.
The value-focused coffee chain, which only emerged from bankruptcy in April 2022, opened 1,485 net new stores in the three months ended 30 June 2023 to reach 10,836. Two-thirds (7,188) of Luckin Coffee’s stores are company operated.
Luckin Coffee’s nimble business model, which deploys heavy discounting alongside small format and delivery-only sites, generated 16% quarter-over-quarter outlet growth. Demonstrating the pace at which Luckin is opening new stores, the coffee chain opened the equivalent of more than two-thirds of its total store growth for 2022 in the second quarter.
Xiamen-based Luckin Coffee highlighted rapid outlet growth and increased monthly transacting customers as driving its 88% year-on-year sales growth.
The coffee chain achieved second quarter revenues of RMB 6.2bn ($855m) with sales from company operated stores increasing 85% to RMB 4.5bn ($620m).
Sales from partnership stores grew 91% in the quarter to RMB 1.5bn ($205m).
Luckin Coffee also reported GAAP operating income of RMB 1.1bn ($161m) with a margin of 18.9%, compared to RMB 241.6m ($33.7m) and a margin of 7.3% in the same quarter of 2022.
The coffee chain turned its first quarterly profit in May 2022 – a milestone which preceded Luckin Coffee’s first full-year profit.
Average monthly transacting customers in the second quarter reached 43.1 million – 108% higher than the same period in 2022 and 46% greater than the previous quarter.
“We are incredibly proud to report another record-breaking quarter with strong sales growth and increased profitability. Our new, innovative product offerings and marketing efforts continue to resonate with customers, driving significant growth in product revenue and monthly transacting customers. In June 2023, we reported a record 50 million transacting customers and opened our 10,000th store, making us the first coffee chain in China with 10,000 stores and cementing our position as China’s largest coffee chain brand,” said Dr. Jinyi Guo, Chairman and CEO, Luckin Coffee.
Looking ahead to the second half of 2023, Guo said Luckin Coffee will seek to further leverage its ‘scale advantages’ in China and continue to expand its global footprint.
In March 2023, Luckin Coffee opened its first international stores in Singapore, where it now operates 12 sites.
Although unconfirmed by the coffee chain, Luckin Coffee is reportedly considering Indonesia and Thailand as potential new markets.