Luckin Coffee Reports Record Third-Quarter Profit as Store Network Expands to Nearly 39,000
Revenue rose 17% and operating margins improved, while declining same-store sales underscored the challenges of sustaining rapid expansion in China's competitive coffee market.
Luckin Coffee reported a record quarterly profit for the third quarter of 2026 as revenue increased and its store network expanded to nearly 39,000 locations, highlighting the continued growth of China's highly competitive coffee market.
The Beijing-based coffee chain announced on November 3 that its net revenue reached 17.89 billion yuan ($2.67 billion) for the three months ended September 30, representing a 17% increase from the same period last year.
GAAP operating income rose 55.1% year on year to 2.76 billion yuan, while the operating margin improved to 15.4%, an increase of 3.8 percentage points. Non-GAAP operating income, which excludes certain expenses, increased 58.2% to approximately 3.05 billion yuan.
According to the company's third-quarter financial results, average monthly transacting customers reached a record 123 million, up 9.6% from a year earlier.
Luckin Coffee Inc.
The company added 2,599 stores during the quarter, including 2,543 in China, 14 in Singapore, 40 in Malaysia and two in the United States. Its total store count reached 38,909 at the end of September, consisting of 25,402 self-operated stores and 13,507 partnership stores.
The expansion reflects Luckin's strategy of using a large store network, digital ordering and relatively affordable products to attract customers. The company has become one of the most prominent competitors in China's coffee sector, where domestic chains and international brands are competing for consumers through new products, promotions and convenient locations.
Despite the increase in total revenue, same-store sales growth at self-operated locations remained negative. The company reported a decline of 11.1% compared with the same quarter last year.
Luckin attributed the decrease primarily to a high comparison base in the previous year, when food-delivery platforms offered elevated subsidies. The figure nevertheless suggests that revenue growth is being supported partly by new store openings and customer expansion rather than stronger sales at existing outlets.
The distinction is important for investors because rapid network growth can increase overall revenue while masking weaker performance at individual stores. Long-term profitability will depend on whether new locations generate sufficient sales to cover rent, labor, ingredients and other operating costs.
Luckin's store-level operating profit for self-operated locations increased 55.5% year on year to 3.02 billion yuan. Its store-level operating margin improved by 5.8 percentage points to 23.3%, according to the company's announcement.
Revenue from self-operated stores rose 16.8% to 12.94 billion yuan, while revenue from partnership stores increased 11.7% to 4.24 billion yuan.
The company also announced that its board had approved a share repurchase program of up to $500 million. The buyback authorization reflects management's stated confidence in the business, although the amount of shares actually repurchased will depend on market conditions and the company's decisions.
Luckin's results come amid intense competition in China's food and beverage market. Domestic coffee chains have expanded rapidly, while international operators have adjusted pricing and product strategies to compete with local brands. Consumers have become accustomed to frequent discounts and promotional offers, creating pressure on pricing and customer retention.
The coffee market also offers significant room for growth beyond major urban centers. Smaller cities and lower-tier markets provide opportunities for chains to expand, but consumer spending power and store economics can vary considerably by location.
For Luckin, the next stage of growth will require balancing expansion with sustainable same-store performance. Its international operations remain comparatively small, but continued openings in Southeast Asia and the United States indicate an effort to build a broader overseas presence.
The latest results show that Luckin is generating stronger operating profits while continuing to expand its network. However, the decline in same-store sales growth remains an important indicator for investors monitoring the quality and sustainability of that expansion.