Core Insights - Luckin Coffee reported a significant increase in revenue for the first half of 2025, reaching RMB 21.224 billion (approximately USD 2.959 billion), compared to RMB 14.681 billion in the same period last year, marking a growth of 44.5% [1][2] - The company achieved an operating profit of RMB 2.437 billion (approximately USD 339.8 million) for the first half of 2025, up from RMB 985.575 million in the previous year, indicating a strong operational performance [2][8] - Net income for the first half of 2025 was RMB 1.776 billion (approximately USD 247.6 million), compared to RMB 787.929 million in the same period last year, reflecting a substantial increase [2][8] Financial Performance - For Q2 2025, total revenue was RMB 12.359 billion (approximately USD 1.723 billion), a 47.1% increase from RMB 8.402 billion in Q2 2024 [6][8] - Product sales revenue in Q2 2025 reached RMB 9.491 billion (approximately USD 1.323 billion), up 44.9% from RMB 6.552 billion in Q2 2024 [8][11] - Operating expenses for Q2 2025 totaled RMB 10.659 billion (approximately USD 1.486 billion), a 45% increase from RMB 7.352 billion in Q2 2024, primarily due to business expansion [18][19] Store Expansion and Operations - As of June 30, 2025, Luckin Coffee operated 26,206 stores, including 16,968 self-operated and 9,238 franchised stores, with a net addition of 2,109 stores in Q2 2025 [15][18] - Same-store sales for self-operated stores increased by 13.4% in Q2 2025, up from 8.1% in the previous quarter, indicating strong customer demand [11][21] - The company reported a monthly average of 91.7 million customers and a GMV of RMB 14.2 billion in Q2 2025 [15] Cost Management - Material costs in Q2 2025 were RMB 4.600 billion (approximately USD 641.4 million), a 36.6% increase from RMB 3.368 billion in Q2 2024, driven by higher sales volume [18][19] - Store rental and other operating costs rose to RMB 2.665 billion (approximately USD 371.6 million), a 30% increase from RMB 2.050 billion in Q2 2024 [18][19] - Delivery expenses surged by 175.1% to RMB 1.670 billion (approximately USD 232.8 million) in Q2 2025, reflecting increased logistics costs [18][19] Leadership Changes - In April 2025, Luckin Coffee announced a management change, with the chairman and CEO of Dazhong Capital replacing Guo Jinyi as chairman of Luckin Coffee [3] - This financial report marks the first under the new chairman, who previously exited the board during the financial scandal [5]

Core Viewpoint - Luckin Coffee has shown strong growth in store expansion and maintains a cautiously optimistic outlook for its annual performance, leveraging scale effects and operational efficiency to mitigate potential cost impacts from the shift towards delivery services [1][4][5] Store Expansion - In Q2 FY25, Luckin Coffee added over 2,000 net new stores, bringing the total to 26,206 stores by the end of the quarter, exceeding initial plans for the year [1][4] - The company has opened 3,800 net new stores in the first half of the year, indicating a robust expansion strategy [1][4] - The total number of stores in China reached 26,117, with 16,903 self-operated and 9,214 franchised [1] Impact of Delivery Subsidies - The introduction of delivery platform subsidies has significantly increased customer demand for high-quality coffee, putting pressure on supply chain flexibility and service reliability [2][3] - Luckin Coffee's established operational infrastructure has enabled it to effectively respond to the surge in demand, ensuring efficient and consistent beverage preparation [2][3] Market Position and Strategy - The company is positioned as a preferred partner for major food delivery platforms, benefiting from a favorable external environment created by recent subsidy activities [3] - Luckin Coffee aims to maintain a competitive store expansion pace while adapting to market changes, focusing on long-term sustainable growth in the rapidly evolving Chinese coffee market [4][5] - The company emphasizes its commitment to high-quality revenue growth while managing potential cost impacts through scale and operational efficiency [5]