Luckin Coffee's 2023 Net Revenue Surges 87%, Surpassing 16,000 Stores

Consumer Staples Author: EqualOcean News, Jiahui Liao Editor: Yiru Qian Feb 26, 2024 06:12 PM (GMT+8)

Luckin Coffee released its financial report for the fourth quarter and full year of 2023. The company achieved a total net revenue of CNY 24.903 billion in 2023, marking an 87.3% year-on-year growth. Its domestic store count reached 16,218, and it successfully expanded its presence overseas.

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On the evening of February 23, Luckin Coffee disclosed its financial report for the fourth quarter and full year of 2023.

The report reveals that in 2023, Luckin Coffee achieved a total net revenue of CNY 24.903 billion, representing an 87.3% year-on-year growth, setting a new historical high in revenue. Specifically, the total net revenue for the fourth quarter of 2023 was CNY 7.065 billion. Under the US Generally Accepted Accounting Principles (GAAP), the operating profit for 2023 was USD 3.026 billion, doubling from the previous year. During the same period, Starbucks' total revenue in China was USD 3 billion. Comparing annual revenues, Luckin Coffee's annual revenue has surpassed that of Starbucks China.

In 2023, Luckin Coffee's revenue from self-operated stores was CNY 17.88 billion, an 82.7% increase from 2022, while revenue from joint venture stores was CNY 6.226 billion, a growth of 102.8% from 2022.

Specifically, the revenue from self-operated stores in the fourth quarter of 2023 was CNY 5.103 billion, an 89.2% increase from 2022, while joint venture store revenue was CNY 1.764 billion, a growth of 109.1% from 2022. Looking at the fourth quarter of 2023, Luckin Coffee's revenue showed strong year-on-year growth, but factors such as seasonality, the "10,000 Stores Celebration" promotional activities, and intense industry competition led to a slight slowdown in profit growth.

In 2023, Luckin Coffee entered the "10,000 Stores Era" and continued to increase its market penetration, establishing a strong scale advantage. In 2023, Luckin Coffee opened a net of 8,034 new stores, bringing the total number of domestic stores to 16,218 by the end of 2023, including 10,598 self-operated stores and 5,620 joint venture stores. Additionally, Luckin Coffee successfully expanded into overseas markets in 2023, with a total of 30 stores in Singapore by the end of the year.

Simultaneously, in terms of products, Luckin Coffee continuously innovated its product development, launching 102 new products throughout the year, with sales exceeding 2 billion units and over 1.9 billion cups of freshly brewed beverages sold. By the end of 2023, Luckin Coffee had 8 SKUs with sales exceeding 100 million units.

Luckin Coffee's Chairman and CEO, Guo Jinyi, stated that 2023 was a milestone year for the company. In the face of intense industry competition, Luckin Coffee achieved a new high in revenue, driven by its unique business model, continuous product innovation, and scale advantage. The overall profit level remained healthy and controllable, aligning with the company's expectations and strategic development direction.

2023 was the most competitive year in the coffee industry in recent years, with price wars and fierce store expansion battles lasting throughout the year.

Starting from February 2023, Luckin Coffee initiated a new round of CNY 9.9 coffee price wars, followed by numerous small and medium coffee brands. In June, Luckin Coffee also launched a new round of CNY 9.9 weekly coffee feedback activities, interpreted by the market as a response to the low-price competition from competitors such as KFC Coffee.

Regarding the adjustment of pricing strategy, Guo Jinyi stated that the competition in the Chinese coffee industry is increasingly fierce, but the development landscape has yet to fully take shape. Therefore, in 2024, the company will continue to adhere to its existing development and pricing strategies, expanding its customer base, increasing consumption frequency, and enlarging its market share.

In 2024, facing the intense competitive landscape in the Chinese coffee industry and the uncertainties of seasonality, Luckin Coffee's future performance may be somewhat affected. However, the company will steadfastly advance its current pricing and development strategies to ensure business growth and market share.