Luckin Coffee Inc. reported third‑quarter 2025 results that included a 50.2% year‑over‑year increase in revenue to RMB15,287.1 million, surpassing the consensus estimate of A$1.94 billion. Net income fell slightly to RMB1,278.3 million from RMB1,314.3 million in the same quarter last year, and the net profit margin contracted to 8.4% from 12.9%. The company’s earnings per share of RMB0.65 beat the analyst consensus of RMB0.57, a $0.08 or 14% lift, driven by higher sales volume and a favorable product mix.
The revenue surge was largely powered by a 14.4% same‑store sales growth in self‑operated stores, reversing a 13.1% decline in the prior year, and by a 40.6% increase in monthly transacting customers, which rose to 112.3 million. The store network expanded to 29,214 outlets, supporting the top‑line growth. However, the rapid expansion also drove a 57% rise in operating expenses and a 211% jump in delivery‑related costs, which weighed on profitability.
Operating margin slipped to 11.6% from 15.5% year‑over‑year, while the non‑GAAP operating margin fell to 12.6% from 16.4%. The compression reflects the steep increase in delivery expenses and broader operating costs, offsetting the revenue gains. The company’s gross margin remained relatively stable, indicating that pricing power in core beverage categories helped cushion the impact of higher input costs.
Management highlighted the scale‑driven strategy as the key to the results. CEO Dr. Guo Jinyi said the company’s “commitment to product innovation and brand equity” has driven the record customer base and store expansion, while CFO Jing An noted that the “increase in total net revenues” was supported by a stronger mix of high‑margin products. Both executives acknowledged that intensified delivery‑platform subsidies have shifted volume share toward delivery, contributing to the higher delivery expense profile.
The company did not issue forward guidance for the remainder of the year, leaving investors to interpret the results in the context of the current macro environment and the company’s ongoing investment in technology and store expansion.
Market reaction was positive, with analysts noting that the revenue beat and customer growth reinforced confidence in Luckin’s growth strategy, while the margin compression highlighted the cost pressures accompanying rapid expansion. The company’s ability to sustain top‑line growth amid a competitive Chinese coffee market remains a key focus for investors.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.