Luckin Coffee Inc. (NASDAQ: LK), often described as China’s version of Starbucks, reported its third-quarter financial results before the markets opened on Wednesday. The coffee chain said that it had a net loss of $0.32 per share and $215.7 million in revenue, which compares with consensus estimates that called for a net loss of $0.37 per share and $211.88 million in revenue.
Total net revenues from products in the quarter increased 557.6% year over year. In terms of the breakdown, freshly brewed drinks represented 74.3% of total net revenues, or $160.2 million.
Net revenue was primarily driven by a significant increase in the number of transacting customers, an increase in effective selling price, and an increase in the number of products sold per transacting customer.
Average monthly total items sold in the quarter were 44.2 million, representing an increase of 470.1% from 7.8 million in the third quarter of 2018. Average monthly transacting customers in the quarter were 9.3 million, representing an increase of 397.5% from 1.9 million.
Ms. Jenny Zhiya Qian, CEO of Luckin Coffee, commented:
We are very pleased with our results in the third quarter. We exceeded the high-end of our guidance range, achieved a store level profit margin of 12.5% and experienced continuous growth across all key operating metrics. These achievements follow a clear trend: an increase in volumes, efficiency and, as a result, profitability. During the quarter, product revenue grew at 557.6%, which was 1.2x, 1.4x and 2.7x the growth rate of average monthly items sold, average monthly transacting customers, and number of stores, respectively.
Shares of Luckin Coffee traded up more than 14% early Wednesday at $21.68, in a post-IPO range of $13.71 to $27.12. The consensus price target is $25.61.