Luckin Coffee: Clear Softness Beneath Ambitious Growth

Luckin Coffee Inc. has continued to expand its store footprint aggressively across China, driving highly impressive revenue.

Luckin Coffee Inc. ( LKNCY ) reported the company’s Q2 results on the 3 rd of August. The Chinese coffee shop operator continues to expand its store footprint aggressively across China, driving highly impressive revenue.

LKNCY's underlying store performance is weakening, signaled by a -5.3% same-store sales decline in Q2. Luckin's overall operating margin was resilient in Q2, but showed significant weakness underneath. I estimate LKNCY stock to have a fair value of $36.40.