Luckin Coffee Inc. (USOTC:LKNCY) reported a 17% increase in third-quarter 2026 revenue to RMB17.89 billion ($2.67 billion), supported by rapid store expansion and record customer activity, despite an 11.1% decline in same-store sales at its self-operated locations.
The Chinese coffee chain reported net income of RMB1.86 billion ($277.0 million), up 45.4% from the corresponding period last year. Non-GAAP net income increased 50.9% to a quarterly record of RMB2.14 billion ($319.6 million).
Luckin added 2,599 net new stores during the quarter, bringing its global network to 38,909 locations. Average monthly transacting customers reached a record 123 million, representing year-over-year growth of 9.6%.
The company also announced a new share repurchase programme of up to $500 million, building on an existing buyback authorisation.
What Drove Luckin Coffee’s 17% Revenue Growth?
Luckin Coffee generated total net revenue of RMB17.89 billion ($2.67 billion) during the three months ended September 30, 2026, compared with RMB15.29 billion in the corresponding period of 2025.
The increase of 17% was primarily driven by higher sales volumes resulting from the expansion of its store network and growth in customer transactions.
Gross merchandise value (GMV), which measures the transaction value of products sold through self-operated and partnership stores, increased 19.7% year over year to RMB20.7 billion.
Revenue from product sales rose 18.8% to RMB13.65 billion ($2.03 billion), compared with RMB11.49 billion a year earlier.
Freshly brewed beverages remained the company’s largest revenue source, generating RMB12.44 billion ($1.85 billion), up from RMB10.63 billion in the previous year.
This category accounted for 69.5% of total revenue.
Revenue from other products increased to RMB1.05 billion ($156.7 million) from RMB622.5 million, raising its share of total revenue to 5.9% from 4.1%.
The results showed that Luckin’s expanding network and higher transaction volumes continued to support consolidated growth, despite weaker sales at comparable existing stores.
Why Did Same-Store Sales Decline 11.1%?
Same-store sales at Luckin’s self-operated locations declined 11.1% during the third quarter, compared with growth of 14.3% in the corresponding period last year.
The company attributed the decline primarily to a challenging comparison with the third quarter of 2025, when food delivery platforms offered elevated customer subsidies.
Those incentives had supported stronger sales in the previous year, creating a higher comparison base for 2026.
The latest decline followed negative same-store sales growth of 0.1% in the first quarter and 5.3% in the second quarter of 2026.
Although comparable-store sales weakened, revenue from self-operated locations increased 16.8% to RMB12.94 billion ($1.93 billion).
The difference reflected the contribution from newly opened stores, which expanded the company’s overall sales capacity.
Luckin’s results therefore highlighted contrasting trends between its growing store network and sales performance at established locations.
How Many New Stores Did Luckin Coffee Open?
Luckin Coffee added 2,599 net new stores during the third quarter, increasing its total network to 38,909 locations.
The expansion represented 7.2% growth from the 36,310 stores operating at the end of June 2026.
Of the net new locations, 2,543 were in China, including Hong Kong.
The company also added 40 stores in Malaysia, 14 in Singapore and two in the United States.
At the end of September, Luckin operated 25,402 self-operated stores and 13,507 partnership stores.
The total network had increased from 29,214 locations at the end of September 2025, demonstrating the scale of the company’s expansion over the preceding year.
Management continues to view store growth as an important component of its strategy to increase market share and reach more customers.
However, the declining same-store sales trend remains an important consideration when assessing the performance of its expanding network.
How Did Luckin Reach a Record 123 Million Monthly Customers?
Luckin reported average monthly transacting customers of 123.0 million during the third quarter, representing an increase of 9.6% from the previous year.
The figure also exceeded the 112.7 million recorded during the second quarter of 2026.
The company attributed the growth to its expanding store network and continued demand for coffee products in China.
Chief Executive Officer Dr. Jinyi Guo said the results reflected progress in the company’s strategy of combining scale with improved profitability.
“Our execution of the high-quality, scaled growth strategy continued to yield positive results,” Guo said.
He added that Luckin had maintained a rapid pace of store expansion while increasing customer activity and profitability.
The company’s customer figures include transactions at both self-operated and partnership stores, including customers whose transactions were paid entirely through free coupons.
How Did Self-Operated Stores Improve Profitability?
Luckin’s self-operated stores generated revenue of RMB12.94 billion ($1.93 billion), representing growth of 16.8% year over year.
Store-level operating profit increased 55.5% to RMB3.02 billion ($449.9 million).
The corresponding operating margin improved to 23.3%, compared with 17.5% in the third quarter of 2025.
The increase of 5.8 percentage points demonstrated stronger store-level profitability despite declining same-store sales.
The company benefited from a reduction in delivery expenses, partly reflecting a shift in customer orders from delivery to pickup.
Store-level operating profit is calculated after deducting relevant store costs, including materials, labour, rent, logistics, depreciation and delivery expenses.
The improvement indicated that Luckin was generating higher operating returns across its self-operated network even as comparable-store revenue remained under pressure.
How Did Partnership Store Revenue Perform?
Luckin reported partnership store revenue of RMB4.24 billion ($632.2 million), an increase of 11.7% from RMB3.80 billion in the prior-year quarter.
Partnership stores accounted for 23.7% of consolidated revenue, compared with 24.9% a year earlier.
The segment generated RMB2.81 billion from materials supplied to partners.
Delivery service fees contributed RMB606.3 million, while profit-sharing and royalty fees totalled RMB580.8 million.
Equipment sales generated RMB214.5 million, and franchise and other service fees contributed RMB30.0 million.
Luckin’s partnership store network expanded to 13,507 locations at the end of September, compared with 12,576 three months earlier.
The growth provided an additional revenue stream alongside the company’s directly operated stores.
Why Did Luckin Coffee’s Operating Profit Rise 55%?
Luckin reported GAAP operating income of RMB2.76 billion ($410.7 million), representing a 55.1% increase from RMB1.78 billion in the third quarter of 2025.
Operating margin improved to 15.4% from 11.6%, an increase of 3.8 percentage points.
On a non-GAAP basis, operating income rose 58.2% to RMB3.05 billion ($454.0 million).
Non-GAAP operating margin increased to 17.0% from 12.6%.
The improvement reflected revenue growth combined with slower growth in total operating expenses.
Operating expenses increased 12.0% to RMB15.14 billion ($2.26 billion), compared with revenue growth of 17%.
As a proportion of revenue, operating expenses declined to 84.6% from 88.4%.
A significant reduction in delivery expenses was an important contributor to the improvement.
How Did Lower Delivery Costs Affect Margins?
Luckin’s delivery expenses declined 38.1% to RMB1.79 billion ($266.6 million), compared with RMB2.89 billion in the corresponding period last year.
The company attributed the reduction primarily to a shift in its order mix from delivery to pickup.
This change helped offset rising costs elsewhere in the business.
Cost of materials increased 23.7% to RMB6.85 billion, reflecting higher product volumes and increased materials supplied to partnership stores.
Store rental and other operating costs rose 26.7% to RMB3.93 billion as the company expanded its network and incurred higher labour, utility and property expenses.
Sales and marketing expenditure increased 30.0% to RMB976.2 million, driven by higher advertising and promotional spending.
General and administrative expenses rose 35.5% to RMB1.08 billion, reflecting increased share-based compensation, payroll and research and development costs.
Despite these increases, the reduction in delivery expenses helped Luckin improve its overall operating margin.
How Much Did Luckin Coffee Earn in the Third Quarter?
Luckin reported net income of RMB1.86 billion ($277.0 million), representing a 45.4% increase from RMB1.28 billion a year earlier.
Net profit margin improved to 10.4% from 8.4%.
Non-GAAP net income increased 50.9% to RMB2.14 billion ($319.6 million), compared with RMB1.42 billion in the previous year.
The non-GAAP net margin rose to 12.0% from 9.3%.
Basic and diluted earnings per American depositary share (ADS) were both RMB5.92 ($0.88).
That compared with basic earnings of RMB4.00 and diluted earnings of RMB3.92 per ADS in the prior-year quarter.
Non-GAAP basic and diluted earnings were RMB6.80 per ADS, compared with RMB4.40 a year earlier.
The adjusted figures exclude certain expenses, including share-based compensation and deal-related costs associated with long-term equity investments.
Income tax expenses increased to RMB914.1 million from RMB560.1 million, primarily reflecting higher profitability.
How Strong Was Luckin Coffee’s Cash Generation?
Luckin generated RMB4.13 billion ($615.7 million) in net cash from operating activities during the third quarter.
That compared with RMB2.07 billion in the corresponding period last year, representing a substantial increase in operating cash generation.
As of September 30, 2026, the company held RMB14.33 billion ($2.14 billion) in cash, cash equivalents, restricted cash, term deposits and short-term investments.
This compared with RMB8.96 billion at December 31, 2025.
The increase in financial resources provides Luckin with funding for continued store expansion, operational investment and shareholder returns.
The company’s stronger cash generation also supports its recently announced share repurchase plans.
Why Has Luckin Coffee Approved Another $500 Million Share Buyback?
Luckin announced that its board of directors had approved a new share repurchase programme authorising purchases of up to $500 million.
The new programme will run for 12 months after it becomes effective.
It will begin following either the full utilisation of the company’s existing $500 million repurchase authorisation or the expiration of that programme, whichever occurs first.
Under the existing programme, originally announced in April 2026 and expanded in September, Luckin had repurchased 95.8 million Class A ordinary shares as of September 30.
Those shares were equivalent to approximately 12.0 million ADSs and were acquired for a total consideration of $391.0 million.
The newly authorised programme allows additional repurchases through open-market transactions, privately negotiated purchases and other permitted methods.
However, the authorisation does not require Luckin to repurchase a specific number of shares or spend the full amount.
The board may also modify, suspend or terminate the programme depending on market conditions and other considerations.
Guo said the new authorisation reflected management’s focus on creating long-term shareholder value.
What Is Luckin Coffee’s Strategy for Future Growth?
Luckin intends to continue pursuing market share gains through store expansion, customer acquisition and improvements in operating efficiency.
The company highlighted growing coffee demand in China as an important opportunity.
Its third-quarter results showed continued growth in customer numbers, revenue and profitability, although comparable-store sales declined.
The expansion of its network to nearly 39,000 locations has significantly increased the scale of its operations.
Luckin also continues to develop its international presence, with new stores opened in Singapore, Malaysia and the United States during the quarter.
Management remains focused on its digitally driven business model, which supports customer transactions and operational management across the store network.
The company did not provide specific fourth-quarter or full-year revenue guidance in the announcement.
Outlook: Can Luckin Sustain Profit Growth as Same-Store Sales Decline?
Luckin Coffee’s third-quarter results demonstrated continued revenue growth and improved profitability, supported by rapid store expansion and stronger operating efficiency.
Revenue increased 17% to RMB17.89 billion, while GAAP net income rose 45.4% to RMB1.86 billion.
Non-GAAP net income reached a quarterly record of RMB2.14 billion, and operating cash flow increased to RMB4.13 billion.
The company’s store network expanded to 38,909 locations, while average monthly transacting customers reached a record 123 million.
However, same-store sales at self-operated locations declined 11.1%, compared with growth of 14.3% a year earlier.
The contrast between overall revenue growth and weaker comparable-store performance will remain an important consideration for investors.
Looking ahead, the company’s ability to sustain profitability while expanding its store network, managing operating costs and improving sales at established locations will be central to its financial performance.
The newly authorised $500 million share repurchase programme also adds another element to Luckin’s capital allocation strategy.
More About Luckin Coffee
Luckin Coffee Inc. is a China-based coffee chain operating through a network of self-operated and partnership stores.
The company sells freshly brewed coffee, other beverages and food products through a digitally driven retail model.
Its operations are primarily concentrated in China, where it has developed a large store network, while also expanding into international markets including Singapore, Malaysia and the United States.
Luckin’s business model combines directly operated locations with partnership stores, generating revenue from product sales, materials supplied to partners, royalties and other services.
The company focuses on store expansion, customer growth, digital ordering and operational efficiency.