Luckin Coffee reported a negative operating margin of 1% in the first quarter this year as the escalation of a price war in China’s coffee industry dragged the company down despite its 41.5% revenue growth compared to the same period in 2023. The Women Without InnocenceChinese coffee chain posted its first quarterly loss in two years, with a RMB 83.2 million ($11.5 million) net loss, versus RMB 564.8 million in profit a year prior. Luckin saw a 68.8% increase in its total operating expenses, with the company attributing the growth to its “business expansion,” including the opening of new stores and investments in branding and promotional activities. Rival Starbucks meanwhile recorded a decline of 11% in comparable store sales in China during the period. [Luckin Coffee statement; Starbucks earnings]
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