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Luckin Coffee Inc. (NYSE: LK) reported second-quarter 2019 results before markets opened Wednesday. The Beijing-based coffee shop operator reported an adjusted operating loss of $0.48 per American depositary share (ADS) on revenues of $96 million. In the same period a year ago, Luckin reported an adjusted loss per ADS of about $0.99 on revenues of $29.16 million. Second-quarter results also compare to the consensus estimates for an adjusted loss of $0.43 per ADS on revenues of $130.26 million. Each ADS is equal to eight ordinary shares.

The company held its initial public offering (IPO) in May, going out at $17 to raise some $645 million. ADSs popped to $25 but cooled off quickly. Luckin is often dubbed the “Starbucks of China,” but the comparison is not especially apt. The company requires customers to use an app to place an order for pickup. As we noted when the quiet period ended, Luckin, unlike Starbucks, is not a destination but more of a kiosk or convenience store.

Luckin operated 2,370 stores at the end of the first quarter and opened nearly 600 more in the second. The company’s ultimate goal is around 5,000. Luckin expects to become the largest coffee store operator in China by the end of this year.

The company guided third-quarter revenues to a range of around $190 million to $210 million. Analysts had projected revenues of $229.77 million and a net loss per ADS of $0.39.

CEO Jenny Zhiya Qian commented:

Total net revenues from products sold increased 698.4% year-over-year, driven by a significant increase in transacting customers, an increase in the average number of items purchased by our transacting customers and higher effective selling prices. At the same time we have substantially reduced our store operating loss as a percentage of net revenues as a result of benefits of scale and increased bargaining power, operating efficiency from technology, and higher store throughput, and we are on track to reach our store level break-even point during the third quarter of 2019.

Investors were not so sanguine, taking the ADSs down more than 5% in early premarket trading. Shares traded down about 2.9% about two hours before Wednesday’s opening bell, at $23.85 in a post-IPO range of $13.71 to $27.12. The consensus 12-month price target on the shares is $25.10.