Luckin Coffee reports strong first half on higher prices, volume tailwinds
Source Luckin Coffee Inc.
Chinese chain Luckin Coffee Inc. (OTC: LKNCY) reported total net revenues of RMB3,182.5 million ($492.9 million) in the first half of 2021, representing an increase of 106% from RMB1,544.5 million in the first half of 2020. Net revenue growth was primarily driven by the increased average selling price for the company’s products, the increase in the number of monthly transacting customers and the number of products sold.
Luckin Coffee, which is in provisional liquidation, announced on Oct. 21 its unaudited financial results for the six months ended Jun. 30, 2021. As a result of the COVID-19 pandemic, the company said its business and financial performance in the first half year of 2020 were materially adversely affected. The company cautioned investors to take this into account when comparing and evaluating period-over-period growth metrics.
KEY POINTS
- Luckin Coffee's total net revenues in the first half year were RMB3,182.5 million ($492.9 million), representing an increase of 106% from RMB1,544.5 million in the same half of 2020.
- Revenues from product sales in the first half year were RMB2,741.3 million ($424.6 million), representing an increase of 89.3% from RMB1,448.2 million in the same half year of 2020.
- Revenues from partnership stores in the first half year were RMB441.2 million ($68.3 million), representing an increase of 357.8% from RMB96.4 million in the same half year of 2020.
- Same-store sales growth for self-operated stores in the first half year was 82.7%, compared with negative 20.3% in the same half year of 2020.
- Average monthly transacting customers in the first half year were 10.5 million, representing an increase of 35.1% from 7.8 million in the same half year of 2020.
- Total number of stores was 5,259 as of the end of the first half year, including 4,018 self-operated stores and 1,241 partnership stores. Self-operated stores decreased by 5.8% from 4,267 stores as of the end of the same half year of 2020 and partnership stores increased by 50.6% from 824 partnership stores as of the end of the same half year of 2020.
- Store level operating profit of self-operated stores in the first half was RMB417.3 million ($64.6 million) with store level operating profit margin of 16.3%, compared with a store level operating loss of self-operated stores of RMB531.4 million with store level operating loss margin of 39.2% in the same half year of 2020.
“This earnings announcement is an important milestone as it enables us to return to normalized financial reporting,” said Dr. Jinyi Guo, chairman and chief executive of Luckin Coffee. “In particular, it is worth noting that substantial revenue growth was driven by an increase in average revenue per self-operated store.
"Several factors contributed to our strong performance," the Luckin chief continued. "We further improved our brand recognition, increased customer retention and order frequency, successfully introduced new products and achieved higher net selling prices. Furthermore, we strategically expanded our Luckin Partnership stores in mostly lower-tier cities in China. Additionally, our technology driven business model and favorable cost structure enabled us to enhance store level profitability and results of operations.”
Dr. Guo summed up, “Today, with a refreshed Board of Directors and leadership team, as well as the execution of our strategy to focus on our core coffee business and deliver sustainable growth and profitability, we are well-positioned to drive meaningful long-term value for our shareholders, and continue to provide outstanding products and services to our customers.”
