Luckin Coffee(LKNCY) - 2022 Q2 - Quarterly Report

Financial Performance - Total net revenues for the second quarter were RMB3,298.7 million (US$493.2 million), a 72.4% increase from RMB1,913.7 million in the same quarter of 2021[3] - Revenues from self-operated stores were RMB2,331.1 million (US$348.6 million), a 52.4% increase from RMB1,529.3 million in the same quarter of 2021[3] - Revenues from partnership stores reached RMB777.5 million (US$116.3 million), a 178.4% increase from RMB279.3 million in the same quarter of 2021, representing 23.6% of total net revenues[12] - Revenues from product sales increased to RMB2,521.2 million in Q2 2022, up 54.3% from RMB1,634.5 million in Q2 2021[42] - Operating income for Q2 2022 was RMB241.6 million, compared to an operating loss of RMB47.5 million in Q2 2021[42] - Net loss for Q2 2022 was RMB114.7 million (US$17.2 million), compared to a net income of RMB21.0 million in Q2 2021[16] - Non-GAAP net income for Q2 2022 was RMB267.5 million (US$40.0 million), representing a non-GAAP net income margin of 8.1%, up from 4.8% in Q2 2021[16] - The company reported a comprehensive loss of RMB163.8 million for Q2 2022, compared to a comprehensive loss of RMB13.6 million in Q2 2021[42] Customer Metrics - Average monthly transacting customers increased to 20.7 million, up 68.6% from 12.3 million in the same quarter of 2021[3] - Average monthly transacting customers reached 20,712 thousand in Q2 2022, compared to 16,229 thousand in Q4 2021[21] - Same-store sales growth for self-operated stores was 41.2%, compared to 71.8% in the same quarter of 2021[3] - Same-store sales growth for self-operated stores was 41.2% in Q2 2022, down from 43.6% in Q4 2021[21] Store Expansion - The company opened 615 net new stores, resulting in a total of 7,195 stores by the end of the second quarter, including 4,968 self-operated and 2,227 partnership stores[3] - Total stores increased to 7,195 as of June 30, 2022, from 6,024 at the end of 2021, with self-operated stores at 4,968 and partnership stores at 2,227[21] - The company plans to continue expanding its store network and improving its product offerings to strengthen its market position[36] Cash Flow and Assets - Net cash used in operating activities was RMB553.1 million (US$82.7 million) in Q2 2022, but net cash provided by operating activities excluding litigation payments was RMB619.1 million (US$92.6 million), up from RMB362.7 million in Q2 2021[18] - Cash and cash equivalents as of June 30, 2022, were RMB4,473.7 million (US$668.9 million), down from RMB6,555.3 million as of December 31, 2021[19] - Total current assets increased to RMB8,383.4 million as of June 30, 2022, compared to RMB6,605.4 million as of December 31, 2021[39] - Total liabilities rose to RMB7,166.7 million as of June 30, 2022, compared to RMB4,659.2 million as of December 31, 2021[39] Operational Efficiency - GAAP operating income was RMB241.6 million (US$36.1 million), with a GAAP operating income margin of 7.3%, compared to a loss of RMB47.5 million in the same quarter of 2021[15] - The total operating loss for the first half of 2022 was reduced to RMB257,685 thousand from a loss of RMB411,545 thousand in the first half of 2021, indicating improved operational efficiency[46] Product Development - The company launched 34 new products during the second quarter and sold over 24 million cups of the "Coconut Cloud Latte" since its launch in April 2022[4] ESG Initiatives - A Sustainable Development Committee was established to enhance the company's ESG initiatives, with plans to publish its first Corporate Governance Report in Q4 2022[6] Legal and Other Challenges - The company anticipates continued negative impacts from pandemic-related market pressures, although the situation has improved compared to earlier in 2022[9] - The provision for equity litigants was RMB276,795 thousand in Q2 2022, a significant increase from zero in Q2 2021, indicating new legal challenges faced by the company[46]