Luckin Coffee 2Q26 First Take: Overall, Q2 was solid despite last year's delivery-subsidy high base. SSSG turned negative to -5.3%, but store openings and user growth drove scale, with revenue up 28.5% YoY and Non-GAAP OP up 26.5%. Notably, delivery expense declined YoY for the first time since the delivery price war, beating expectations.

On a high base, revenue growth slowed QoQ. Q2 revenue was RMB 15.89bn (+28.5% YoY), beating the RMB 15.43bn consensus.

SSSG turned negative to -5.3% as expected. Monthly transacting customers reached 113mn (+23% YoY), a record above the Q3 2025 subsidy peak, suggesting users lost as subsidies faded were replaced by new-store additions and organic growth.

Store expansion accelerated rather than slowed. Luckin added 2,714 net stores in Q2, ending with 36,310 locations (+8.1% QoQ).

Self-operated units continued to outpace franchised stores, indicating ongoing densification in higher-tier cities. Overseas stores reached 223 with 46 net adds, with Malaysia the main contributor.

The marketing ratio edged up. Q2 GPM was 61.5%, down 130bps YoY, likely due to a higher mix of lower-margin raw-material wholesale.

Notably, delivery expense was RMB 1.62bn, down 3.1% YoY—the first YoY decline in absolute terms since the delivery price war began. As a % of revenue, it fell from 13.5% to 10.2%.

Store-level margin was 21.3%, just 20bps below last year. Despite SSSG at -5.3% and store count up 38.6% YoY, unit economics were largely intact, indicating continued efficiency gains at the store level.

In addition, the bottled RTD business formally launched in Q2. The company stepped up related spending, lifting the sales expense ratio by 100bps YoY to 5.8%, while G&A stayed flat.

Non-GAAP OP was RMB 2.396bn (+26.5% YoY). For more details, please follow Dolphin Research's detailed take and call transcript.$Luckin Coffee(LKNCY.US)