Luckin Coffee 1Q26 First Take: Despite rapid store adds, revenue held up well and slightly beat. The drag remains the old issue: a higher delivery mix kept pushing up fulfillment costs, delaying margin release.

1) Q1 revenue grew 35.3%. On SSSG, same-store sales were roughly flat YoY and decelerated slightly vs. Q4. Dolphin Research believes reduced delivery subsidies led to a modest dip in same-store cup volume.

2) Store expansion remained aggressive, with 2,548 net new stores in Q1, including 17 overseas (Singapore 1, Malaysia 13, U.S. 3). The expansion pace hit a Q1 record. Penetration into lower-tier markets accelerated, reaffirming management's 'share before profit' strategy.

3) Although global coffee bean prices stayed elevated, Luckin partially hedged input pressure via origin direct sourcing and long-term procurement agreements. A higher mix of non-coffee beverages also diluted bean-cost exposure. As a result, GPM was flat YoY.

By expense line, delivery remained the biggest drag, up 48% YoY, with its sales ratio jumping from 7.8% to 10.9%. While lower than 25Q4's 12.8%, it is still well above the pre-delivery-war norm of 7–9%. Non-GAAP OPM came in at 7.5%, down 220bps YoY. $Luckin Coffee(LKNCY.US)