Services

Luckin Earnings: How China Does Coffee

Peopleimages / Getty Images

Luckin Coffee Inc. (NASDAQ: LK), often described as China’s version of Starbucks, reported its third-quarter financial results before the markets opened on Wednesday. The coffee chain said that it had a net loss of $0.32 per share and $215.7 million in revenue, which compares with consensus estimates that called for a net loss of $0.37 per share and $211.88 million in revenue.

Total net revenues from products in the quarter increased 557.6% year over year. In terms of the breakdown, freshly brewed drinks represented 74.3% of total net revenues, or $160.2 million.

Net revenue was primarily driven by a significant increase in the number of transacting customers, an increase in effective selling price, and an increase in the number of products sold per transacting customer.

Average monthly total items sold in the quarter were 44.2 million, representing an increase of 470.1% from 7.8 million in the third quarter of 2018. Average monthly transacting customers in the quarter were 9.3 million, representing an increase of 397.5% from 1.9 million.

Ms. Jenny Zhiya Qian, CEO of Luckin Coffee, commented:

We are very pleased with our results in the third quarter. We exceeded the high-end of our guidance range, achieved a store level profit margin of 12.5% and experienced continuous growth across all key operating metrics. These achievements follow a clear trend: an increase in volumes, efficiency and, as a result, profitability. During the quarter, product revenue grew at 557.6%, which was 1.2x, 1.4x and 2.7x the growth rate of average monthly items sold, average monthly transacting customers, and number of stores, respectively.

Shares of Luckin Coffee traded up more than 14% early Wednesday at $21.68, in a post-IPO range of $13.71 to $27.12. The consensus price target is $25.61.


The #1 Thing to Do Before You Claim Social Security (Sponsor)

Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.

A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.

 

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.