What’s new: Starbucks challenger Luckin Coffee Inc. turned a full-year operating profit for the first time in 2022, despite being hit by Covid-19 lockdowns in the fourth quarter.
The coffee chain’s operating profit last year reached 1.16 billion yuan ($168 million) with a margin of 8.7%, bouncing back from a loss of 539 million yuan in 2021, according to the company’s earnings report released Thursday. Revenue surged 66.9% year-on-year to 13.3 billion yuan in 2022.
The Xiamen-based fast-coffee chain said it was hit hard by the pandemic, particularly in the fourth quarter when it was temporarily closing around 1,500 stores each day.
Luckin’s shares, which continue to trade over-the-counter since the company’s delisting, closed up around 7% in U.S. trading Thursday.
Background: The encouraging results came nearly three years after the Chinese coffee chain was delisted from the Nasdaq for faking hundreds of millions of dollars in revenue.
The company did not give earnings projections for 2023, citing geopolitical and economic uncertainties, but signaled optimism for a revival of consumer confidence as pandemic restrictions end.
Luckin expanded rapidly over the last 12 months by opening 2,190 stores, bringing the total to more than 8,200 outlets nationwide by the end of last year. By comparison, Starbucks Corp. is currently operating more than 6,000 stores on the Chinese mainland.
Related: China’s Luckin Coffee Brews Comeback Plan With Southeast Asia Foray
Contact reporterc (kelseycheng@caixin.com) and editor Leila Hashemi (leilahashemi@caixin.com)
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