Luckin Coffee Inc (LKNCY) (Q3 2026) Earnings Call Highlights: Record Non-GAAP Net Profit of ...

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Release Date: November 03, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Total net revenues grew 17% year-over-year to RMB17.9 billion, driven by a 20% increase in GMV to RMB20.7 billion.

• Non-GAAP net profit exceeded RMB2.1 billion, a new quarterly record, with non-GAAP net margin expanding 2.7 percentage points to 12%.

• Operating profit rose 55% year-over-year to RMB2.8 billion, with operating margin expanding 3.8 percentage points to 15.4%.

• Store network expanded to 38,909 globally, up 33% year-over-year, with 2,543 net new stores in China and 56 net new stores internationally.

• Average monthly transacting customers exceeded 120 million, a new record, and average spend per transacting customer reached a new high, indicating growing customer loyalty and frequency.

Negative Points

• Same-store sales for self-operated stores declined 11.1% year-over-year, significantly impacted by the high comparison base from last year's delivery subsidies.

• Cost of materials as a percentage of total net revenue increased to 38% from 36% in the prior year period, due to changes in average selling prices from the delivery mix shift.

• Store restaurant and other operating costs as a percentage of total net revenue rose to 22% from 20%, reflecting reduced economies of scale compared to the subsidy-boosted prior year.

• Sales and marketing expenses increased 30% year-over-year to RMB976 million, mainly due to higher traffic-related investment following the subsidy war.

• General and administrative expenses rose 36% year-over-year to RMB1.1 billion, driven by higher share-based compensation, payroll costs, and increased R&D investments.

Q & A Highlights

Q: How should investors think about Luckin's long-term store expansion potential in China and the pace of new store openings given the company's already large scale? A: CEO Jinyi Guo said long-term store potential is driven by growth in China's coffee demand rather than a fixed store count, noting coffee consumption habits are still developing and there is significant room to grow both the number of coffee drinkers and drinking frequency versus mature markets. He said customer demand determines where Luckin opens stores, and the company's predominantly self-operated model and store development systems allow it to identify demand locations and open efficiently while keeping unit economics healthy. Luckin added nearly 2,600 net new stores in Q3 2026, bringing its global network to 38,909 stores, up 33% year-over-year, and Guo said the company is confident it can maintain a competitive pace of expansion.

Q: What drove the 11.1% year-over-year decline in same-store sales for self-operated stores in Q3 2026, and how should investors think about the trend into Q4 and beyond? A: CEO Jinyi Guo said July and August 2025 marked the peak of the food delivery subsidy war, creating a high comparison base, and the sharp pullback in platform subsidies this year reduced delivery volume, which typically carries a higher average selling price per cup. Pickup volume recovered, but the mix shift weighed on both cup volume and average selling price. He said the decline narrowed month by month from July to September and the pace of improvement picked up further in Q4 as customers shift back to pickup. Guo said same-store sales should not be viewed in isolation for a company still scaling rapidly, noting Luckin's same-store sales have followed a wave-like pattern, improving quickly when store opening pace moderates, as seen in the second half of 2024.

Q: How did profitability hold up in Q3 2026 despite the same-store sales decline? A: CFO Jing An said store-level operating profit at self-operated stores rose 56% year-over-year to RMB3 billion, with store-level operating margin at 23.3%, up 5.8 percentage points year-over-year. CEO Jinyi Guo said store-level operating margin was not only notably higher than a year ago but largely back to pre-subsidy levels, even though the delivery mix remains much higher than in Q3 2024 and the store network has nearly doubled. At the group level, GAAP operating profit rose 55% to RMB2.8 billion with a 15.4% margin, and non-GAAP net profit rose 51% to a record RMB2.1 billion.

Q: What were the key revenue and GMV drivers in Q3 2026? A: CFO Jing An said total net revenues grew 17% year-over-year to RMB17.9 billion, supported by a 20% increase in GMV to RMB20.7 billion, driven by higher volumes across self-operated and partnership stores. Product sales revenues rose 19% to RMB13.6 billion, with freshly made drinks contributing RMB12.4 billion, or about 69% of total net revenues. Revenues from self-operated stores increased 17% to RMB12.9 billion, while partnership store revenues rose 12% to RMB4.2 billion, or 24% of total, mainly on higher volumes partially offset by lower delivery service fees.

Q: How did the shift from delivery back to pickup affect Luckin's cost structure in Q3 2026? A: CFO Jing An said delivery expenses fell to 10% of total net revenues from 19% a year earlier, and in absolute terms dropped 38% year-over-year to RMB1.8 billion, reflecting the significant shift toward pickup orders. Cost of materials rose to 38% of total net revenues from 36%, mainly due to changes in average selling prices from the delivery mix shift, while store rental and other operating costs rose to 22% from 20%, reflecting greater economies of scale in the prior-year subsidized period. Sales and marketing expenses rose 30% year-over-year to RMB976 million, or 5.5% of revenues, on higher traffic-related investment.

Q: What is Luckin's capital return plan and balance sheet position? A: CFO Jing An said the Board approved a new one-year share repurchase program with total authorization of USD 500 million, which will take effect once the existing USD 500 million program is fully utilized. Under the current program, Luckin had repurchased about 96 million Class A ordinary shares, or 12 million ADSs, for total consideration of USD 391 million as of September 30, 2026. The company generated RMB4.1 billion in net cash from operating activities in Q3, and its total cash position stood at RMB14.3 billion versus RMB9 billion at December 31, 2025, with a net cash position of RMB11.1 billion.

Q: How are Luckin's customer metrics trending? A: CEO Jinyi Guo said Luckin added over 28 million new transacting customers in Q3 2026, bringing its cumulative transacting customer base to over 520 million, while average monthly transacting customers exceeded 120 million, a record high. He said average spend per transacting customer also continued to increase this year and reached a new high in the quarter, suggesting a virtuous cycle between better coffee offerings and more frequent consumption is starting to take shape.

Q: What is the status of Luckin's international expansion? A: CEO Jinyi Guo said Luckin added 56 net new stores internationally in Q3 2026, bringing its total overseas store count to 279, including 103 self-operated stores in Singapore, 22 in the US and 154 partnership stores in Malaysia. In Singapore, Luckin passed the 100-store mark, making it the second-largest coffee chain in the country by store count, and Guo said store-level economics have largely proven out with performance continuing to improve. He said the Singapore progress demonstrates the potential to replicate Luckin's business model overseas and provides valuable experience as the company expands internationally at a varying pace.

Q: What product innovation drove customer engagement in Q3 2026? A: CEO Jinyi Guo said Luckin launched 41 freshly made beverages and more than 20 snack items in the quarter. In coffee, the company introduced its Ethiopian Gesha Cold Brew followed by several new cold brew-based products, and rolled out two specialty drinks from its lab stores nationwide for a limited time. Beyond coffee

For the complete transcript of the earnings call, please refer to the full earnings call transcript .