Thursday 30 June 2022

Luckin Coffee announces 4Q net revenues of US$381.7m, up 81%

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BEIJING, China – Luckin Coffee Inc. yesterday announced its unaudited financial results for the three months ended December 31, 2021 and fiscal year 2021. “We are very pleased to report strong overall performance in the fourth quarter and fiscal year 2021,” said Dr. Jinyi Guo, Chairman and Chief Executive Officer of Luckin Coffee.

“We opened more than 350 net new stores during the quarter and are one of the largest coffee networks in China by the number of outlets, with more than 6,000 stores as of December 31, 2021. Building on our positive momentum, the team has delivered strong same store sales growth for our self-operated stores resulting from increased number of transacting customers, increased items sold and higher average selling prices. For our partnership stores, we witnessed a substantial increase in revenue contribution as we expanded into lower-tier cities across China.

This partnership model has proved highly complementary to our self-operated store strategy.”

Luckin Coffee: Fourth Quarter 2021 Highlights

  • Total net revenues in the fourth quarter were RMB2,432.7 million (US$381.7 million), representing an increase of 80.7% from RMB1,345.9 million in the same quarter of 2020.
  • Net new store openings during the fourth quarter was 353, resulting in a quarter-over-quarter store unit growth of 6.2%, ending the period with 6,024 stores of which 4,397 self-operated stores and 1,627 partnership stores.
  • Average monthly transacting customers in the fourth quarter were 16.2 million, representing an increase of 67.1% from 9.7 million in the same quarter of 2020.
  • Revenues from Luckin Coffee ‘s self-operated stores in the fourth quarter were RMB1,837.2 million (US$288.3 million), representing an increase of 61.0% from RMB1,141.1 million in the same quarter of 2020.
  • Same-store sales growth for self-operated stores in the fourth quarter was 43.6%, compared to 9.2% in the same quarter of 2020.
  • Store level operating profit – self-operated stores in the fourth quarter was RMB383.4 million (US$60.2 million) with store level operating profit margin of 20.9%, compared to RMB98.9 million with store level operating profit margin of 8.7% in the same quarter of 2020.
  • Revenues from partnership stores in the fourth quarter were RMB448.8 million (US$70.4 million), representing an increase of 248.4% from RMB128.8 million in the same quarter of 2020.
  • GAAP operating loss in the fourth quarter was RMB120.8 million (US$19.0 million) compared to RMB488.9 million in the same period in 2020. Non-GAAP operating loss, in the fourth quarter was RMB23.6 million (US$3.7 million) which represents a material improvement of our operating results compared to a loss of RMB368.8 million in the same period in 2020. Our non-GAAP operating loss does not adjust for losses and expenses related to Fabricated Transactions and Restructuring which in the fourth quarter of 2021 and the same quarter last year were RMB109.4 million (US$17.2 million) and RMB89.8 million, respectively. Based on the current situation, the Company expects losses and expenses related to Fabricated Transactions and Restructuring to decrease in the second quarter of 2022, following the successful completion of the provisional liquidation during the first quarter of 2022.

Full Year 2021 Highlights

  • Total net revenues in fiscal year 2021 were RMB7,965.3 million (US$1,249.9 million), representing an increase of 97.5% from RMB4,033.4 million in fiscal year 2020.
  • Net new store openings during fiscal year 2021 was 1,221, resulting in a year-over-year store unit growth of 25.4%, ending the period with 6,024 stores of which 4,397 self-operated stores and 1,627 partnership stores.
  • Average monthly transacting customers in fiscal year 2021 were 13.0 million, representing an increase of 55.2% from 8.4 million in fiscal year 2020.
  • Revenues from self-operated stores in fiscal year 2021 were RMB6,192.7 million (US$971.8 million), representing an increase of 78.3% from RMB3,472.8 million in fiscal year 2020.
  • Same-store sales growth for self-operated stores in fiscal year 2021 was 69.3%, compared to a same-store sales decrease of 7.8% in fiscal year 2020.
  • Store level operating profit – self-operated stores in fiscal year 2021 was RMB1,252.8 million (US$196.6 million) with store level operating profit margin of 20.2%, compared to a store level operating loss of RMB434.7 million with store level operating loss margin of 12.5% in fiscal year 2020.
  • Revenues from partnership stores in fiscal year 2021 were RMB1,306.1 million (US$205.0 million), representing an increase of 312.5% from RMB316.6 million in fiscal year 2020.
  • GAAP operating loss in fiscal year 2021 was RMB539.1 million (US$84.6 million), representing a significant reduction in operating loss from RMB2,587.3 million in fiscal year 2020. Non-GAAP operating loss in fiscal year 2021 was RMB236.3 million (US$37.1 million), compared to a loss of RMB2,493.8 million in fiscal year 2020. Our non-GAAP operating loss does not adjust for losses and expenses related to Fabricated Transactions and Restructuring which in fiscal year 2021 and 2020 were RMB339.6 million (US$53.3 million) and RMB475.3 million, respectively.

Dr. Guo also said, “Overall, we are pleased with the efficiency of our store operations and increased benefits of scale and operating leverage. These developments resulted in a material improvement in our self-operated store level margins and overall profitability profile during the fourth quarter and fiscal year 2021. These impressive results have further strengthened our market leadership position and are a strong testament to our unique value proposition, innovative product portfolio and premier brand recognition.”

Dr. Guo added, “The Company’s recent completion of the provisional liquidation plays a major role in advancing our growth strategy as it allows us to operate from a position of greater financial strength and unlock our full potential. As we enter 2022, we are energized and cognizant of predicted macroeconomic headwinds, including the recent outbreak of COVID in China. We remain dedicated to providing the innovative products and services that our customers have come to rely upon and driving improved returns on capital and long-term value for our shareholders.”

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