BRIEF: Luckin posts strong profit, revenue gains as business recovers

Luckin Coffee Inc. (LKNCY.US), operator of China’s largest coffee chain, reported strong double-digit revenue and profit growth in the second quarter, as it continued to open new stores at a rapid pace and its business rebounded from a downturn last year.

Luckin’s revenue grew 47.1% year-on-year in the first quarter to 12.4 billion yuan ($1.73 billion), while its profit rose 43.6% over that period to 1.25 billion yuan, according to its latest quarterly report released before U.S. markets opened on Wednesday. Its store-level operating margin for its self-operated stores fell slightly to 21.0% from 21.5% a year earlier.

The company opened 2,109 stores during the quarter, bringing its total to 26,206 by the end of March. The latest openings included 24 overseas stores, consisting of 16 in Malaysia, six in Singapore and two in the U.S. Same-store sales for its self-operated stores, which account for about two-thirds of its total, rose 13.4% during the quarter, accelerating from an 8.1% rise in the previous quarter.

Luckin shares opened higher on Wednesday after the report’s release, but later gave back the gains and closed down 1.9% for the day. The stock is up more than 50% this year.

By Doug Young

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