---
title: "Luckin Coffee: Will adjust store opening speed according to competition (2Q24 conference call)"
description: "Luckin Coffee 2024 Q2 Earnings Conference Call Minutes"
type: "topic"
locale: "en"
url: "https://longbridge.com/en/topics/22803411.md"
published_at: "2024-07-30T15:13:06.000Z"
author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)"
---

# Luckin Coffee: Will adjust store opening speed according to competition (2Q24 conference call)

**The following is the summary of the second quarter financial report conference call for** $Luckin Coffee(LKNCY.US) **in 2024. For financial report analysis, please refer to "** [**Kudi "Not Dead", Ruixing "Already Old"?**](https://longportapp.com/zh-CN/topics/22802062?app_id=longbridge) **"**

**I. Review of Core Financial Information:**

![0](https://pub.pbkrs.com/uploads/2024/022ed893eb71259943753bb1b85fee94?x-oss-process=style/lg)

**II. Detailed Content of the Financial Report Conference Call**

**2.1. Key Points from Management's Statements:**

1) Operational Highlights:

① New Product Launch

Introduced 30 new SKUs in the second quarter, including Coconut Latte, Lemon Americano, and Super Cup Light Coffee series

② Store Expansion

As of July, **Luckin Coffee's total number of stores exceeded 20,000, with a net addition of 1,371 stores in the second quarter**

a. Domestic: Total of 19,924 stores, including **13,019 self-operated stores and 6,905 cooperative stores**, covering all provinces

b. International: The number of stores in Singapore reached 37, with 5 new stores added in the second quarter

③ User Experience and Market Share

a. **Average monthly transaction customers reached 69.69 million, a year-on-year increase of 61.8%**

b. In the second quarter, **the number of new transaction customers increased by 24.87 million year-on-year**

④ Sustainable Development

a. Established 3 LEED Gold-certified stores in Xiamen, Tianjin, and Hangzhou, dedicated to green operations

b. Collaborated with the Beijing University Medical School to establish a Health Innovation Base, promoting research in the field of coffee health

⑤ Brand Partnerships and Marketing

a. Collaborated with brands such as Sesame Street, the movie "A Chinese Odyssey," and Party Animals to launch corresponding products

b. Launched the "Luckin Coffee Fitness Ice Summer" event, combining four health attributes of the products

⑥ Supply Chain

a. Signed a procurement intention agreement with Brazil to purchase approximately 120,000 tons of coffee beans in the next two years, promoting the development of a global high-quality supply chain

2) Financial Highlights

① Overall Revenue

a. **Total revenue was RMB 8.4 billion, a year-on-year increase of 35.5%**

b. Product sales revenue was RMB 6.6 billion, a year-on-year increase of 39%

c. Net revenue from freshly ground beverages was RMB 6 billion, accounting for 71.6% of total net revenue, higher than 68.2% in the second quarter of 2023

② Self-operated and cooperative store revenue

a. Self-operated store revenue was RMB 6.3 billion, a year-on-year increase of 39.6%

b. Cooperative store revenue was RMB 1.9 billion, a year-on-year increase of 24.5%

③ Expenses

a. **Operating expenses increased by 46.2% year-on-year**

b. The proportion of management expenses to revenue is 7%, a year-on-year increase of 38.6%, mainly due to increased salary costs, research and development expenses, office supplies expenses, and share-based compensation expenses

c. The proportion of sales and marketing expenses to revenue increased from 4.9% to 5.1%, a year-on-year increase of 42.5%

④ Operating profit

a. **Operating profit was RMB 1.05 billion, with an operating profit margin of 12.5%**

b. The operating profit margin was 18.9% in the same period last year, and -1% in the previous quarter; **The profit rebound in this quarter is mainly attributed to the increase in ice drink sales brought by warmer weather**

⑤ Net profit

a. **Net profit was RMB 871 million, with a net profit margin of 10.4%**

b. The net profit margin was 16.1% in the same period last year, and -1.3% in the previous quarter

⑥ Cash flow and balance sheet

a. **Net operating cash inflow in the second quarter was RMB 1.5 billion**, compared to RMB 1.4 million in the same period last year

b. Obtained RMB 300 million in short-term bank loans

c. As of June 30, 2024, the total amount of cash and cash equivalents, restricted cash, time deposits, and short-term investments was RMB 3.8 billion

**2.2 Analyst Q&A**

**Q: What are the main driving factors behind the rebound in Luckin's performance in the second quarter? Is this profit margin sustainable?**

A: We are very satisfied with the overall performance in the second quarter. Although external factors such as improved weather played a role, actively adjusting and effectively leveraging our business model advantages were the main reasons for achieving positive results. Specifically, with warmer weather and reduced seasonal disadvantages in the second quarter, our rapidly expanding store network allowed us to reach more consumers more effectively during peak seasons.

In addition, strategically locating our stores in shopping centers and on the street edges has led to strong performance in each store, and our overall store sales volume has also increased. In terms of products, the total sales volume in the second quarter exceeded 750 million units. We launched 25 new freshly made drinks domestically, accounting for 24% of total sales in China. Furthermore, by leveraging our digital and scale advantages, we implemented effective cost reduction and efficiency improvement measures in the second quarter. These initiatives were the main drivers of our improved profitability.

In the upcoming third quarter, which is still a peak consumption season, we will continue to launch products suitable for summer and increase marketing efforts to stimulate new consumer demand. Our goal is to maintain the company's strong revenue and profit levels.

**Q: With the slowdown in store opening speed in the second quarter, will the company further adjust its store opening strategy?**

A: We believe that China's coffee industry is rapidly developing. With the continuous growth of consumer coffee habits, the market will continue to expand. At the same time, coffee industry sales continue to rise, presenting a long-term strategic growth opportunity Given this historic opportunity, we will focus on market share as our core development goal at this stage. We will adjust the speed of store openings according to the competitive situation, closely monitor our market position, and work hard to consolidate our leading advantage.

At the same time, in response to the complex external environment and competitive landscape, we will adhere to store opening standards, ensure quality, and achieve healthy and sustainable growth. While continuing to expand our store network, we will consolidate our market leadership position through innovative products and strategies to enhance user satisfaction, striving to create long-term value.

**Risk Disclosure and Disclaimer for this article:** [**Dolphin Investment Research Disclaimer and General Disclosure**](https://support.longbridge.global/topics/misc/dolphin-disclaimer)

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