Tuesday 27 September 2022

Luckin Coffee reports second quarter net revenues of $493 million up+72% on year, announces senior management changes

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BEIJING, China – Luckin Coffee Inc. yesterday announced its unaudited financial results for the three months ended June 30, 2022 as well as senior management changes with the appointment of Ms. Jing An as its Chief Financial Officer, effective yesterday. Total net revenues in the second quarter were RMB3,298.7 million (US$493.2 million), representing an increase of 72.4% from RMB1,913.7 million in the same quarter of 2021.

Net new store openings in the second quarter was 615, resulting in a quarter-over-quarter store unit growth of 9.3% from the number of stores at the end of the first quarter of 2022, ending the second quarter with 7,195 stores which include 4,968 self-operated stores and 2,227 partnership stores.

Average monthly transacting customers in the second quarter were 20.7 million, representing an increase of 68.6% from 12.3 million in the same quarter of 2021.

Revenues from self-operated stores in the second quarter were RMB2,331.1 million (US$348.6 million), representing an increase of 52.4% from RMB1,529.3 million in the same quarter of 2021.

Same-store sales growth for self-operated stores in the second quarter was 41.2%, compared to 71.8% in the same quarter of 2021.

Store level operating profit – self-operated stores in the second quarter was RMB712.2 million (US$106.5 million) with store level operating profit margin of 30.6%, compared to RMB353.2 million with store level operating profit margin of 23.1% in the same quarter of 2021.

Revenues from partnership stores in the second quarter were RMB777.5 million (US$116.3 million), representing an increase of 178.4% from RMB279.3 million in the same quarter of 2021.

GAAP operating income in the second quarter was RMB241.6 million (US$36.1 million), representing a GAAP operating income margin of 7.3%, compared to a GAAP operating loss of RMB47.5 million in the same quarter of 2021. Non-GAAP operating income in the second quarter, which adjusts for share-based compensation expenses, was RMB342.6 million (US$51.2 million), representing a non-GAAP operating income margin of 10.4%, compared to RMB23.5 million, or a non-GAAP operating income margin of 1.2% in the same quarter of 2021, which represents a significant improvement of operating results.

“We are proud to announce that Luckin Coffee delivered another quarter of outstanding financial and operational results despite continued pandemic-related headwinds,” said Dr. Jinyi Guo, Chairman and Chief Executive Officer of Luckin Coffee.

“We reported net revenues growth of over 70% compared to the same quarter last year, same-store sales growth for self-operated stores of over 40% and our partnership store revenues continued to increase as a percentage of total revenues. Furthermore, we successfully launched 34 new products during the second quarter and sold over 24 million cups of our “Coconut Cloud Latte” from its launch in April 2022 through the end of the second quarter.

Dr. Guo continued, “During the second quarter, we had 615 net new store openings and entered 11 new lower-tier cities through our partnership stores and three new lower-tier cities through our self-operated stores. We remain focused on achieving further market penetration through a combination of our self-operated stores and retail partnership models, which allow us to meet increasing customer demand in an agile and flexible manner. Our growing scale and operating leverage continues to drive improved returns, with a store level operating profit margin for self-operated stores of over 30% and a reported operating profit margin of over 7%.”

Dr. Guo concluded, “I am also pleased to announce that, after the successful completion of the restructuring of our financial indebtedness in the first quarter, we have made substantial progress on resolving outstanding U.S. securities litigations. We received final court approval for the federal class settlement and we also made substantial progress in resolving remaining opt-out litigations. This marks another important milestone for Luckin Coffee in resolving all of its historical issues. While we continue to foresee adverse effects of the pandemic on our business in the near-term, the Board and management team remain confident in our ability to capture growth opportunities in the China market and drive long-term value and sustainable growth for our shareholders.”

Luckin Coffee: Senior Management Changes announced

The company also announced the appointment of Ms. Jing An as its Chief Financial Officer, effective today. Ms. An brings more than 17 years of experience in corporate finance and management, with a specialization in technology companies. Ms. An succeeds Mr. Reinout Hendrik Schakel, who has served as the Company’s Chief Financial Officer and Chief Strategy Officer since January 2019. Mr. Schakel will continue to serve as the Company’s Chief Strategy Officer.

In his role as the Company’s Chief Strategy Officer, Mr. Schakel will principally focus on long-term strategic planning and the execution of Luckin Coffee’s capital markets strategy. Mr. Schakel will work closely with the senior management team to identify and execute growth opportunities and chart the future course for Luckin Coffee.

“As Chief Financial Officer and Chief Strategy Officer, Mr. Schakel has been instrumental in our recovery and the Board and I thank him for his invaluable contributions,” said Dr. Jinyi Guo, Chairman and Chief Executive Officer of Luckin Coffee. “From stepping in to restructure and reorganize our finance team and function to spearheading our successful financial restructuring, Mr. Schakel has played a critical role in positioning Luckin Coffee for sustainable growth and success. With our financial restructuring now substantially completed, this is the right time for Mr. Schakel to focus on his role as Chief Strategy Officer. We are at a pivotal point in Luckin Coffee’s growth story, and we are thrilled to continue benefitting from Mr. Schakel’s leadership and expertise and look forward to the value he will continue to generate for us and our stakeholders in his more focused role.”

Dr. Guo added, “We are delighted to welcome Ms. Jing An as our new Chief Financial Officer. Having a senior executive with Ms. An’s vast experiences and qualifications is a testament to the caliber of our finance team today. With her expertise leading finance functions and past experience helping technology companies grow, Ms. An will be a tremendous asset as we work to further strengthen our leading market position and capture the significant opportunities that lie ahead. Our Board and senior management team look forward to working closely with Ms. An as we continue to write the next chapter of the Luckin Coffee story.”

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