Luckin Coffee: New Store Openings in January 2024
Momentum Continued
This year we will start to update LKNCY’s new store opening data on a monthly basis instead of quarterly. However, please note that the monthly data itself does not necessarily form a meaningful trend and could be distorted by a lot of seasonal factors, such as national holidays. In our opinion, quarterly data is far more important and informative for research purposes.
Based on the company’s official wechat channel, LKNCY opened 619 new stores in China in January 2024. Per its Instagram account, the company did not open any new stores in Singapore during the period. To put that number in perspective, we compare it with the average monthly new store openings in each quarter since 1Q 2022 (see chart below).
Source: Company official wechat channel.
The number in January 2024 was lower than that in 3Q and 4Q 2023, but higher than the other six quarters. At least we can conclude that the momentum of LKNCY’s store opening remained strong during the first month of 2024. Please note that the first quarter is seasonally a slower quarter for opening new stores due to the unfavorable impact of Chinese New Year which officially is a seven-day holiday. Given that Chinese New Year in 2024 falls between February 10 and 17th, the new store openings will most likely slow down in February and re-accelerate in March.
A more important upcoming catalyst is actually LKNCY’s 4Q 2023 earnings release which should be scheduled around late February or early March. Management will have to address quite some questions from its shareholders, especially the industry competition, profit margin trend and pace of new store openings.