Luckin Coffee has demonstrated robust trading momentum in the third quarter of 2024, overcoming earlier challenges related to slower outlet growth and operating losses. The Xiamen-based coffee chain announced net revenues of RMB 10.18 billion ($1.45 billion) for the three months ending September 30, marking a 31% increase from the previous quarter and a substantial 41.4% rise compared to the same period last year.
In its latest financial results, the company reported a GAAP operating income of RMB 1.55 billion ($222.1 million), significantly up from RMB 961.7 million during the third quarter of 2023.
Luckin Coffee expanded its footprint by opening 1,382 net new stores, bringing its total to 21,343 locations. This includes 13,936 company-owned outlets and 7,407 franchised stores, reflecting a total quarter-over-quarter outlet growth of 6.9%.
In a press release, the company reaffirmed its commitment to international expansion, noting the establishment of 45 company-owned stores in Singapore since March 2023, which generated net revenues of RMB 91.4 million during the period.
The coffee chain also confirmed its plans to evaluate a potential launch in the United States, although it indicated a cautious approach in light of the competitive landscape dominated by Starbucks. “Given the maturity, saturation, and competitiveness of the US coffee market, we intend to approach our expansion strategy there with careful consideration and a disciplined execution plan,” Luckin stated.
Additionally, the company is exploring opportunities in other international markets but cautioned that profitability in its international segment is unlikely in the near term. Luckin cited its experience in China, where it took over five years to achieve its first quarterly profit.
Dr. Jinyi Guo, Chairman and CEO of Luckin Coffee, emphasized the brand’s popularity among consumers, stating, “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.”
While Luckin continues to face fierce competition in China’s branded coffee shop market, particularly from the rapidly growing rival Cotti Coffee, it reported a decline in company-owned store like-for-like sales growth, which fell to 13.1% from 19.9% in the same quarter of the previous year.
Despite these challenges, Luckin Coffee achieved a record of 79.8 million transacting customers in the third quarter, up from 69 million in the previous quarter. The digital-first chain also experienced strong delivery sales, with channel revenues reaching RMB 230.4 million ($32.9 million).
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