---
title: "Luckin Coffee \"soars\": Q2 net income YoY surges 88%, surpassing Starbucks China."
description: "Luckin Coffee's total net revenue for the second quarter was RMB 6.2014 billion, representing a YoY growth of 88.0%."
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/94104215.md"
published_at: "2023-08-02T04:01:02.000Z"
---

# Luckin Coffee "soars": Q2 net income YoY surges 88%, surpassing Starbucks China.

> Luckin Coffee's total net revenue for the second quarter was RMB 6.2014 billion, representing a YoY growth of 88.0%.

On August 1st, Luckin Coffee (LKNCY.US) released its second-quarter earnings report for 2023.

According to the report, Luckin Coffee's total net revenue in the second quarter was 6.2014 billion yuan, an 88.0% year-on-year increase. Under the US Generally Accepted Accounting Principles (GAAP), Luckin Coffee's operating profit in the second quarter of 2023 was 1.1728 billion yuan, with an operating profit margin of 18.9%, reaching a historical high. On August 1st, local time, Luckin Coffee's stock price rose, and as of the time of writing, the stock had risen by more than 5.8%, reaching 31.03 US dollars.

It is worth noting that according to the latest financial data released by Starbucks for the third quarter of the 2023 fiscal year, Starbucks' net revenue for the third quarter (April 3 to July 2) was 9.2 billion US dollars. Among them, Starbucks' revenue in China was 822 million US dollars (approximately 5.96 billion yuan), compared with Luckin Coffee's latest disclosed revenue of 6.2014 billion yuan. This means that Starbucks' revenue in China has been surpassed by Luckin Coffee for the first time.

Guo Jinyi, Chairman and CEO of Luckin Coffee, said, "In the second half of 2023, we will continue to increase investment, focus on customer value, and transform our scale advantage into long-term benefits for consumers. At the same time, we will also devote ourselves to accelerating the education and development of the Chinese coffee market, expanding Luckin Coffee's market share and brand influence, promoting sustainable overseas expansion, and allowing the whole world to enjoy high-quality products and services from Chinese coffee brands."

Scale Effect

It is worth noting that since the second quarter, Luckin Coffee, which has entered the "era of ten thousand stores," is further highlighting the scale effect.

In sync with the revenue growth, Luckin Coffee's store scale expanded further in the second quarter, with a net increase of 1,485 new stores, a 15.9% increase compared to the previous quarter. As of the end of the second quarter, Luckin Coffee had a total of 10,836 stores, including 7,188 self-operated stores and 3,648 franchised stores, making it the coffee brand with the largest number of stores in the Chinese domestic market.

Guo Jinyi said, "In June 2023, we reported a record-breaking 50 million transaction customers and opened our 10,000th store, making us the first coffee chain in China to have 10,000 stores, consolidating our position as the largest coffee chain brand in China."

As Luckin Coffee enters the "era of ten thousand stores," not only has its revenue growth been strong in the second quarter, but its profitability has also significantly improved, and efficiency continues to increase. The financial report shows that the operating profit margin of the company's self-operated stores in the second quarter of this year was 29.1%, a slight increase from 28.4% in the same quarter of 2022. Luckin Coffee stated that the improvement in store operating profit margin is mainly due to the economies of scale brought about by the increase in the number of products sold. From the perspective of store operations, Luckin Coffee's self-operated store revenue in the second quarter was RMB 4.4953 billion, an increase of 85.2% compared to the same period in 2022, which was RMB 2.427 billion. The profit at the store level for self-operated stores in the second quarter was RMB 1.3075 billion (USD 180.3 million), with a store-level profit margin of 29.1%. In the same period of 2022, the profit was RMB 689.8 million, with a store-level profit margin of 28.4%. The revenue from joint venture stores in the second quarter was RMB 1.4858 billion (USD 204.9 million), an increase of 91.1% compared to the same period in 2022, which was RMB 777.5 million.

Product Strategy

Luckin Coffee stated that the average monthly number of transaction customers in the second quarter was 43.07 million, an increase of 107.9% compared to the same period in 2022, which was 20.7 million, and an estimated increase of 46% compared to the first quarter of this year, which was 29.49 million.

On June 5th this year, Luckin Coffee's official WeChat account published an article titled "Every week 9.9, Luckin Coffee celebrates with all stores, grateful to all users." In less than an hour, it received over 100,000 reads. In the comment section, some people said, "Luckin Coffee has indeed changed the coffee-drinking habits of Chinese people. This allows coffee lovers to enjoy coffee conveniently without having to prepare a coffee machine. Keep up the good work, Luckin Coffee." "Thanks to Luckin Coffee, I have transformed from someone who didn't like coffee to a distinguished Black Gold Deer member in just half a year. Thank you, Luckin Coffee, for saving me from countless early mornings and Ruimen." After the success of the Thick Milk Latte and Coconut Latte, Luckin Coffee once again captured the hearts of consumers with the 9.9 yuan promotion.

Luckin Coffee stated that in order to thank millions of consumers for their support, the "9.9 yuan" gratitude promotion will continue for at least two years.

Data shows that the coffee industry is expected to reach a trillion yuan scale in the Chinese market by 2025. It is particularly important to find a differentiated positioning in such a huge market potential. In addition to price reduction, it is worth noting that since 2023, Luckin Coffee has successively launched "Chinese Tea Coffee" products such as Bi Luo Chun Latte, Jasmine Fragrance Latte, and Orchid Tie Guan Yin Latte. Among them, Bi Luo Chun Latte achieved a sales volume of 4.47 million cups in the first week. According to the latest official data from Luckin Coffee, in the past week ending on August 1st, the tea coffee series of Luckin Coffee achieved a record of 6.25 million cups in seven days. Since the launch of Luckin Coffee's "Chinese Tea Coffee," its popularity has been increasing, making it the latest outstanding brand case in the coffee industry. The continuous introduction of innovative products and marketing activities has consistently gained consumer recognition, driving growth in single-store sales and a significant increase in average monthly active users. The rapid growth in user numbers appears to be continuing, with Luckin Coffee reportedly surpassing 50 million transaction customers in June.

Zhu Qiong, a senior case researcher at the China Europe International Business School, pointed out that Luckin Coffee has gradually improved its operating profit through private domain operations, creating explosive products, fine-tuning store operations, and opening franchise stores. Luckin Coffee has undergone a rebirth and has become one of the players in the Chinese coffee industry that cannot be ignored.

### Related Stocks

- [LKNCY.US - Luckin Coffee](https://longbridge.com/en/quote/LKNCY.US.md)

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.
