Luckin Q1 revenue increased by 35% year-over-year, with non-GAAP net profit rising by 5.9% year-over-year, and the company launched its first share repurchase program.

On April 29, Luckin Coffee released its first-quarter financial report for 2026. During the reporting period, the company achieved total net revenue of 11.996 billion yuan, representing a year-on-year increase of 35.3%, surpassing Bloomberg's forecast of 11.69 billion yuan.

Profit performance showed significant divergence: GAAP net profit was 506 million yuan, a year-on-year decrease of 3.6%, with the net profit margin narrowing from 5.9% in the same period last year to 4.2%; excluding non-cash items such as share-based compensation, non-GAAP net profit was 686 million yuan, a year-on-year increase of 5.9%. Adjusted net earnings per ADS were 2.16 yuan, an increase of 8% year-on-year.

The pace of store expansion continues to accelerate. In the first quarter, 2,548 new stores were opened, bringing the total number of stores at the end of the quarter to 33,596, including 21,807 directly operated stores and 11,789 franchise stores. The average monthly number of transacting customers reached 93.09 million, a year-on-year increase of 25.3%. Notably, same-store sales growth for directly operated stores turned negative, declining from a positive 9.2% growth last year to -0.1%.

The earnings report also announced that the board of directors has authorized a share repurchase program, under which the company may repurchase up to $300 million worth of American Depositary Shares (ADS) over the next 12 months, marking its first stock repurchase plan. CEO Guo Jinyi stated that this reflects the company's commitment to enhancing shareholder returns and creating long-term value. Based on the current share price, the $300 million repurchase represents approximately 5%-6% of the company’s total market capitalization as of the end of the quarter.

Revenue structure: Franchise store growth outpaced directly operated stores, with GMV increasing by 35.8%.

In the first quarter, Luckin Coffee’s total Gross Merchandise Volume (GMV) reached 14.1 billion yuan, a year-on-year increase of 35.8%, roughly matching the growth rate of net revenue.

By revenue source, revenue from directly operated stores amounted to 8.592 billion yuan, growing by 32.6% year-on-year, but its proportion of total revenue decreased from 73.4% last year to 71.7%. Revenue from franchise stores was 3.015 billion yuan, surging by 44.9% year-on-year, significantly faster than the growth of directly operated stores, with its share rising from 23.5% to 25.1%. Within franchise store revenue, material sales accounted for 1.979 billion yuan, profit-sharing and royalty fees totaled 372 million yuan, and delivery service fees were 453 million yuan.

In terms of product mix, net revenue from freshly prepared beverages was 8.257 billion yuan, growing by 34.0% year-on-year, accounting for 68.8% of total revenue; net revenue from other products (baked goods, snacks, etc.) was 566 million yuan, increasing by 18.7% year-on-year, representing 4.7% of total revenue.

Cost and expense pressures: Delivery costs surged nearly 90%, pressuring store-level profitability.

Pressure on the cost side was primarily reflected in delivery expenses. In the first quarter, delivery costs reached 1.308 billion yuan, surging by 89.8% year-on-year, far exceeding revenue growth. The company attributed this mainly to a substantial increase in third-party platform delivery orders. Delivery costs as a percentage of revenue rose from 7.8% last year to 10.9%.

Raw material costs amounted to 4.854 billion yuan, increasing by 35.8% year-over-year, roughly in line with revenue growth; store rent and other operating costs reached 3.061 billion yuan, up 31.4% year-over-year; depreciation and amortization totaled 452 million yuan, rising by 33.7% year-over-year.

Sales and marketing expenses were 732 million yuan, surging by 47.5% year-over-year, with their share of revenue increasing from 5.6% to 6.1%, primarily due to higher advertising spending and third-party platform commissions. General and administrative expenses stood at 851 million yuan, growing by 24.9% year-over-year, while their share of revenue decreased from 7.7% to 7.1%, reflecting some economies of scale.

At the store level, operating profit from self-operated stores was 1.169 billion yuan, a year-over-year increase of 5.9%; however, the operating margin declined from 17.0% to 13.6%, contracting by 3.4 percentage points. The direct causes of the margin contraction were negative same-store sales growth compounded by soaring delivery costs.

Non-GAAP net profit increased by 5.9% to 686 million yuan.

Under GAAP standards, Luckin Coffee's operating profit for the first quarter was 716 million yuan, representing a year-over-year decrease of 2.6%, with the operating margin falling from 8.3% to 6.0%. Excluding share-based compensation expenses, non-GAAP operating profit reached 898 million yuan, increasing by 4.1% year-over-year, with a non-GAAP operating margin of 7.5%.

In terms of net profit, GAAP net profit was 506 million yuan, declining by 3.3% year-over-year; non-GAAP net profit reached 686 million yuan, growing by 5.9% year-over-year, with a non-GAAP net margin of 5.7%. Adjusted basic and diluted net earnings per ADS were 2.16 yuan and 2.08 yuan, respectively, compared to 2.00 yuan for both metrics in the same period last year.

Regarding cash flow, net cash flow from operating activities for the first quarter was 791 million yuan, lower than 897 million yuan in the same period last year. Cash, restricted cash, and short-term investments totaled 9.055 billion yuan at the end of the period, showing slight growth compared to the beginning of the year.