--- title: "Luckin Coffee (Trans): Partnership stores in lower-tier cities outperformed during the CNY holiday" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40293456.md" description: "Below is Dolphin Research's Trans of Luckin Coffee's FY26Q1 earnings call.For the earnings analysis, see 'Luckin Coffee: Revenue Up, No Profit Gain - When Will the Little Blue Cup Shake Off the Delivery Hangover?'" datetime: "2026-04-29T15:04:03.000Z" locales: - [en](https://longbridge.com/en/topics/40293456.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40293456.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40293456.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # Luckin Coffee (Trans): Partnership stores in lower-tier cities outperformed during the CNY holiday **Below is Dolphin Research's transcript of Luckin Coffee's FY26 Q1 earnings call. For our earnings take, see**[**Luckin Coffee: Revenue Up but Profits Flat — When Will the Blue Cup Shake Off the Delivery Hangover?**](https://longbridge.cn/zh-CN/topics/40292462?channel=SH000001&invite-code=7XHHT4&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=f5d264ed-1b7b-47a7-9ebf-95920c6595e9)**.**$Luckin Coffee(LKNCY.US) **I. Key takeaways** 1\. **Shareholder returns**: The company launched its first share repurchase program of up to RMB 300mn for one year. While dividends are not feasible in the near term due to historical reasons, management will keep evaluating all shareholder return options, including dividends. 2\. **Revenue growth**: Q1 total net revenue rose 35% YoY to approx. RMB 12.0bn. GMV increased 35.8% YoY to RMB 14.1bn. 3\. **Margin pressure**: GAAP OP was RMB 760mn, with OPM around 6% (vs. 8.3% a year ago). Non-GAAP OP was RMB 898mn, with OPM at 7.5%. Net profit was RMB 506mn, for a 4.2% NPM (vs. 5.9% a year ago), mainly dragged by higher delivery expenses. 4\. **Delivery costs surged**: Delivery expenses jumped 90% YoY to RMB 1.3bn. As a share of revenue, the ratio rose from ~8% to ~11%, though delivery cost per order declined YoY. 5\. **Cash flow and liquidity**: Q1 operating net cash flow was approx. RMB 791mn. As of Mar 31, 2026, total cash position was about RMB 9.1bn (cash, restricted cash, term deposits, and ST investments), slightly higher vs. approx. RMB 9.0bn at end-2025. **II. Earnings call details** **2.1 Management remarks** **1) Store expansion** a. Total stores reached 33,596 at Q1-end, up 39% YoY. China had 33,419 stores (21,713 company-operated; 11,706 franchised), with net adds of approx. 2,531 in the quarter. b. Overseas stores totaled 177 (82 company-operated in Singapore; 12 company-operated in the U.S.; 83 franchised in Malaysia), with net adds of 17. The international centralized platform has been integrated, and the focus is to deepen existing markets with flexible local models while exploring overseas expansion prudently. c. During Chinese New Year, franchised stores in lower-tier cities outperformed. This validated the nationwide, balanced network's ability to capture and convert demand. **2) Product innovation** a. In Q1, the company launched 26 fresh beverages and 10+ snacks. It continued to reinforce its positioning as a professional coffee brand, upgrading bean profiles and the overall coffee experience. b. New classics included Light Rose Americano and the Opium Blonde series (Americano/Latte). Custom options now span blends, dark roasts, and Oriental roast styles, with additions such as Belgian dark chocolate latte and raspberry series. c. In non-coffee, the company rolled out the Cheese Cap series. It fully upgraded the milk coffee line with origin-traceable ingredients, broadening daypart and multi-scenario coverage. **3) User operations** a. Q1 added over 21mn new transacting users. Avg. monthly transacting users rose 25% YoY to over 93mn. b. Larger cup sizes were introduced across more hot and cold SKUs, seeing good early adoption. This contributed positively to overall ASP. c. Purchase frequency per capita increased YoY for both new and existing users. This confirms the positive flywheel between scale expansion and demand growth. **4) Supply chain build-out** a. The third roasting plant commenced production, bringing three facilities fully online with more under construction. Total annual capacity reached 155kt. b. The company procured over 30kt of coffee beans from Yunnan in the quarter. It further strengthened a diversified sourcing network across domestic and overseas origins. **2.2 Q&A** **Q: As you open stores rapidly, how do you think about the full-year pace and the balance between scale and unit-level performance?** A: Our core strategy is disciplined scale with quality, dynamically balancing expansion speed, store quality, operating efficiency, and same-store performance. Fundamentally, our footprint expansion is anchored in the long-term outlook for coffee consumption in China. We are building the network at a competitive pace while maintaining healthy unit economics to reinforce Luckin's scale advantage and long-term positioning. Recently, the delivery price war has created strong growth tailwinds for coffee consumption in China, so we are in a faster expansion phase that continued into Q1. Against this backdrop, some volatility in same-store performance is normal and well within our expectations. That said, same-store sales at company-operated stores were roughly stable in Q1, highlighting the resilience of our operations. On the demand side, **the strong performance in lower-tier markets during Chinese New Year further validated the nationwide, balanced network's capability to capture and convert demand**. We also do not see demand as static. Beyond the natural increase in purchase frequency as habits deepen, our supply-side investments, including network expansion and product innovation, help stimulate and create new demand. This underpins our confidence in the long-term trajectory of same-store performance. Over the next few quarters, as we lap the high base from last year's delivery subsidies, same-store sales may see some short-term fluctuations. However, we are leaning into product innovation, continued upgrades in professional coffee offerings, broader non-coffee assortments, and deeper customization capabilities. These initiatives should widen consumption scenarios, lift conversion, and increase purchase frequency. In short, same-store may fluctuate amid rapid growth in the near term, but we believe the long-term trend remains healthy and upward. **Q: What are the key considerations behind the buyback, and will you consider cash dividends or other return forms?** A: Launching the RMB 300mn buyback at this stage reflects our conviction in the long-term potential of China's coffee market, our own growth outlook, and our ability to create long-term value. Over the past six years, we have built strong fundamentals with improving operating metrics and healthier cash flows, which supports returning capital to shareholders. As we enter a more mature phase, we are more focused on capital allocation discipline and efficient use of funds. While continuing to fund strategic investments and steady growth, we aim to enhance long-term shareholder value in a more proactive and sustainable way, and the buyback is an important step to optimize capital structure and strengthen returns. Looking ahead, we remain open to various forms of shareholder returns. Due to historical reasons, we cannot distribute dividends in the short term, but we will keep evaluating alternatives, including dividends, taking into account performance, cash flows, and long-term needs. Our goal is to strike a proper balance between business growth and shareholder returns. We will continue to create sustainable long-term value for shareholders. <正文结束\> **Risk disclosure and statement:**[**Dolphin Research Disclaimer and General Disclosures**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [LKNCY.US](https://longbridge.com/en/quote/LKNCY.US.md) ## Comments (3) - **竞争优势 · 2026-04-29T16:27:26.000Z**: The buyback is $300 million. - **芝士分子 · 2026-04-29T15:12:42.000Z**: Is that all there is? Just these two questions? - **价值投机客** (2026-04-29T15:31:58.000Z): Luckin Coffee seems to have very few questions at each earnings call.