Luckin Coffee(US:LKNCY) 2 1 Shi Ji Jing Ji Bao Dao·2025-11-20 02:08Core Insights - Luckin Coffee's revenue increased by 50.2% year-on-year to RMB 15.287 billion in Q3 2025, but net profit decreased by 2.7% to RMB 1.278 billion, primarily due to the impact of the delivery battle [1][5]. Financial Performance - Total net revenues reached RMB 15.3 billion, with a year-on-year increase of 50.2% [2]. - Gross Merchandise Volume (GMV) grew by 48.1% year-on-year to RMB 17.3 billion [2]. - Average monthly transacting customers increased by 40.6% year-on-year to 112.3 million [2]. - Store-level operating profit rose by 10.2% year-on-year to RMB 1.941 billion, with an operating margin of 17.5% [2]. - GAAP operating income increased by 12.9% year-on-year to RMB 1.777 billion [2]. Store Expansion - The company added 3,008 new stores in Q3, reaching a total of 29,214 stores, marking an 11.5% quarter-on-quarter growth [3]. - Self-operated stores accounted for 18,882, while franchise stores numbered 10,332 [3]. Customer Engagement - Monthly average transacting users hit a record high of 112 million, with 42 million new users added in the quarter [3]. - Same-store sales increased by 14.4% year-on-year, recovering from previous declines [3]. Cost Structure - Raw material costs as a percentage of total net revenue decreased from 39% to 36% year-on-year, despite a 41% increase in absolute value to RMB 5.5 billion [3]. - Rent and other operating costs as a percentage of total net revenue fell from 22% to 20%, with a 36% increase in absolute value to RMB 3.1 billion [4]. - Sales and marketing expenses decreased from 6% to 5% of total net revenue, with a 28% increase in absolute value to RMB 751 million [4]. Delivery Costs - Delivery expenses surged by 211.4% year-on-year to RMB 2.89 billion, accounting for 18.9% of total revenue, which negatively impacted operating profit margins [5]. - The company’s net profit decline was attributed to the rising delivery costs associated with the competitive landscape [5]. Competitive Landscape - The delivery battle has intensified, with competitors like KFC and Pizza Hut showing more stable profit margins [6]. - Luckin Coffee is compelled to engage in price competition to maintain market share in the high-frequency coffee consumption sector [7]. Strategic Direction - The company is exploring structural solutions, including a shift towards in-store pickup as a primary consumption method [9]. - The CEO emphasized that delivery costs are too high relative to the pricing sensitivity of coffee, and the focus will return to in-store consumption over time [10]. - The company anticipates short-term fluctuations in same-store sales growth due to the tapering of delivery subsidies [11].