Luckin Coffee (OTC:LKNCY) shares are ticking marginally higher today after the company’s fourth-quarter top line soared by 91.2% year-over-year to $995.08 million. Further, its non-GAAP net income per American Depository Share jumped to RMB 1.12 from RMB 0.56 in the year-ago period. Based in China, Luckin provides a variety of food and beverage products.
The company opened a total of 8,000 net new stores in 2023, ending the year with over 16,200 locations. In Q4, Luckin’s average monthly transacting users jumped to 62.4 million from 24.6 million in the prior year. This points to a staggering 154.2% year-over-year growth.
Additionally, its same-store sales growth came in at a healthy 13.5% for the quarter. However, store-level operating profit margin contracted to 13.5% from 21.6% in Q4 2022.
Why Is Luckin Coffee so Successful?
Luckin is experiencing robust top-line gains due to more product offerings, rising user numbers, and an expanding footprint. Additionally, the impact of lower pricing is being offset by its rising economies of scale. While the coffee industry in China remains highly competitive, Luckin is focusing on pricing and footprint expansion to drive growth and market share gains.
Despite this performance, Luckin’s share price remains nearly 13% lower over the past six months amid a wider slump in China’s financial markets. While analyst coverage on the stock remains scant, it is currently trading at a price-to-earnings multiple of about 24.3.
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