Luckin Coffee, Starbucks’ biggest competitor in the increasingly crowded Chinese market, announced its financial results for the third quarter of 2022 on 22 November. The company reported strong growth in the third quarter and has been working to restructure its business after an accounting fraud nearly two years ago.
Total net revenues were RMB3,894.6 million (US$547.5 million) in the third quarter of 2022.
Revenues from product sales were RMB2,995.5 million (US$421.1 million) in the third quarter of 2022.
Revenues from partnership stores were RMB899.1 million (US$126.4 million) in the third quarter of 2022.
Total operating expenses were RMB3,309.4 million (US$465.2 million) in the third quarter of 2022. The increase in total operating expenses was predominantly the result of the Company’s business expansion.
Cost of materials were RMB1,440.5 million (US$202.5 million) in the third quarter of 2022.
Store rental and other operating costs were RMB770.4 million (US$108.3 million) in the third quarter of 2022, representing an increase of 49.4% from RMB515.5 million 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.
Dr Jinyi Guo, Chairman and CEO, Luckin Coffee
Dr Jinyi Guo also said that everything is going according to his expectations. Luckin Coffee has increased its scale to further improve its overall profitability and achieved an operating profit margin of 15% in the third quarter, which is comparable to Starbucks, which delivers a range from 17 – 14%.
With our research and development capabilities and our operational efficiency, we are confident in our ability to continue capturing growth opportunities in the fast-growing China coffee market while driving long-term value and sustainable growth for our shareholders.
Dr Jinyi Guo, Chairman and CEO, Luckin Coffee
Some of the highlights of the report include total net sales in the third quarter, which amounted to US$547.5 million, up 65.7% from US$330.4 million in the same quarter of 2021.
Luckin Coffee opened 651 new shops in the third quarter, which means that the number of new shops opened increased by 9% each quarter. The company now has 7,846 shops, including 5,373 self-operated shops and 2,473 partner shops. 25.1 million people visited Luckin Coffee shops, up 70.5% from the same quarter in 2021.
The Xiamen-based coffee company has undergone an intense restructuring, upgrading its team and recruiting the best talent in the industry following a massive accounting fraud in 2020, not long since it was founded in 2017.
The 2020-2022 Corporate Governance Report highlights Luckin Coffee’s goal to create value for both customers and society while laying the foundation for its sustainable development. The company is technology-driven, offering high-quality coffee and other products, and aims to become a global brand that is present in everyone’s daily lives.
