Operator
Ladies and gentlemen, welcome to Lockheed Coffee's first quarter 2026 earnings conference call. All participants will be in listen-only mode during management's prepared remarks, and there will be a question and answer session to follow. Please be advised that today's call is being recorded. Now I'd like to turn the call over to Ms. Nancy Song, Head of Investor Relations at Lockheed Coffee. Nancy, please go ahead.
Thank you, and hello, everyone. Welcome to Locking Coffee's first quarter, 2026 earnings conference call. We announced our financial results earlier today before the U.S. market opened. The earnings release is now available on our website and via Newsware services. Today, you will hear from Dr. Guo Jingyi, co-founder and CEO of Locking Coffee, who will share a strategic overview of our business. Following that, Ms. Anjing, our CFO, will discuss our financial results in greater detail. Afterwards, we will open up the call for questions. During today's call, we will be making some forward-looking statements regarding future events and expectations. Any statements that are not historical facts, including but not limited to statements about our beliefs and expectations of our looking statements. These statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in our findings with the SEC. In addition, for non-GAT matters discussed today, the reconciliation information related to those matters can be found in our earnings press release. During today's call, Dr. Guo will speak in Chinese, and his comments will be translated into English. Now, I'd like to turn the call over to Dr. Guo Jingli, co-founder and CEO of Locking Copy. Dr. Guo, please go ahead. 大家好,欢迎参加今天的业续交通会。 感谢各位对瑞幸咖啡的持续关注与支持。 Good day everyone, and welcome to today's earnings conference show.
Thank you for your continuous interest in and support for Locking Coffee. and community-led development of a long-term development of a long-term development.
We began 2016 with robust momentum. In the first quarter, we remained focused on executing our core strategy of high-quality skilled growth and delivered solid results. Amid an increasingly diverse and dynamic competitive landscape, We leveraged our end-to-end digital capabilities to expand our store network, grow our customer base, increase consumption, and strengthen our supply chain. Together, these multidimensional scaling efforts raise a system-wide competitive advantage across our populace of people, products, and places.
1季度, 公司总净收入同比增长35%, 达到约120亿元 我们继续保持行业领先的开店节奏, 并紧密关注门店质量与效率 实现了自营门店同店销售基本稳定, 门店运营相关费用率同比优化 从杯浪结构看,一季度外卖占底继续回落,但仍然显著高于去年同期水平,受此阶段性影响,营业利润约7.1亿元,营业利润率约6% 左眼长期,我们相信润性的规模渔营体系优势将持续体现,并有效地驱动长期铜电表现,运营效率与盈利水平的稳步提升。 remaining disciplined on store quality and operational efficiency.
Thin store sales for our self-operated stores remain broadly stable, and the store-level operating expense ratios improved compared to last year. From a sales channel perspective, the delivery volume mix declined sequentially, but remained well above last year's level. Reflecting tamper rate makes driven impact. As a result, operating income reached around R&D 710 million, representing an operating margin of around 6%. Looking ahead, we expect our scale advantages and operating capabilities to become increasingly evident, supporting improvements in central performance, efficiency, and probability over time. Thank you very much. a one-year period. This marks an important step in our efforts to enhance shareholder returns and reaffirms our commitment to long-term value creation. 接下来,我将围绕规模增长战略,从人过场三大核心维度,介绍本期的运营进展。稍后,CFO安静会分享更详细的财务数据。 Next, I will walk you through our quarterly progress across the three core dimensions of our scaled growth strategy, people, products, and places.
Following that, our CFO engine will provide more detailed review of our financial performance. 强化品牌触达与需求成见能力 康实长期市场领先地位 截至一季度 公司门店总数达到33,596家 同比增长39% 持续扩大的门店网络 将为客户拉新提频 以及逐步释放规模效应 奠定了坚实的基础
We expand at a competitive pace while maintaining a clear focus on healthy store-level performance. We further deepen our network coverage across both high-tier and low-tier cities, enhancing convenience, strengthening brand accessibility, and improving our ability to capture demand, which ultimately reinforces our long-term market leadership. By the end of the first quarter, our total store count reached 33,596, representing 39% yield yield growth.
Our expanding store network will continue to support customer acquisition, higher purchase frequency, and improved scale efficiencies over time. 具体来看 中国市场竞争2531家 门店总数达到了33419家 其中自营21713家 联营11706家 初步形成了各县级城市相对均衡的网络布局 这种全国性纵深渗透的门店网络,让瑞幸的业务经营具备更强的系统韧性,能够更好地应对季节性节日类的需求波动,保持整体大盘的稳健发展。 例如今年春节期间,伴随着高线城市人口返乡,叠加咖啡消费习惯的持续普及,下沉市场的消费活力得到了充分释放,低线城市联营门店表现尤为亮眼。 这即体现了中国咖啡市场巨大的需求潜力,也再次印证了瑞幸的品牌势能、规模优势与全品类协同驱动增长的综合能力。 713 self-operated stores and 11,706 partnership stores, forming a well-balanced footprint
across all city tiers nationwide. Our deeply penetrated national store network strengthens the structural resilience of our business, allowing us to better absorb seasonal and holiday demand volatility while sustaining stable overall performance. For example, during this year's Chinese New Year holiday, as consumers in higher tier cities returned to their hometowns and coffee consumption habits continued to gain traction, demand in lower tier markets was fully activated, with our partnership stores performing particularly well. This performance underscores the significant long-term potential of China's coffee market and highlights the strength of our brand momentum, scale advantages, and a well-rounded product portfolio in driving growth. 第四季度,我们完成了国际化业务中台的整合,提升了海外拓展的运营管理能力。
在系统化中台的支持下,我们将继续以灵活的本地运营模式深耕现有市场,优化单链表现,积累海外运营经验和用户理解,稳步探索推进海外市场扩张。 measured menu.
During the quarter, we added 17 menu stores, bringing our total overseas store count to 177. This includes 82 self-operative stores in Singapore, 12 self-operative stores in the U.S., and 83 franchise stores in Malaysia. During the quarter, we also completed the integration of our international centralized mid-office functions. further enhancing our global operating and management capabilities. Looking ahead, we will continue to deepen our presence in existing markets through flexible localized operating models, optimize store-level performance, and build further overseas operating experience and customer insights, while prudently exploring overseas expansion. in the products.
咖啡豆风味和专业体验 先后推出浅烘美式 埃塞金烘美式 埃塞金烘拿铁等 多款经典产品 目前 我们的客制化选项 已覆盖意识听配 深烘和埃塞金烘 三种不同烘焙程度的咖啡豆 全面满足 消费者风味进阶的 专业品质需求 此外 我们还推出了 比利时黑巧拿铁 树莓美式 潜汤龙井拿铁等新产品 为不同咖啡系列附入了活力 非咖啡方面 我们持续丰富产品矩阵和品质体验 一季度推出了学绕知识系列 依托原产地布局 全线升级抹茶产品 通过这些多元化的产品创新 强化覆盖全时段多场景的消费需求 On the product front, we continue to drive higher engagement, purchase frequency, and overall consumption through ongoing innovation
and an increasingly diversified product portfolio, supporting long-term same-store performance. In the first quarter, we launched 26 new freshly brewed beverages and more than 10 snack items. Since the beginning of the year, we have focused on strengthening Latin coffees provisioning as a professional coffee brand by continuously upgrading our bean flavor profiles and overall coffee experience. We introduced a range of classic offerings, including light rose Americano, Ethiopian Blanc Americano, and Ethiopian Blanc Latte. Our customization options now cover multiple roast profiles, including Espresso Blend, Dark Roast, and Ethiopian Blunt, allowing us to meet increasingly sophisticated consumer preferences. In addition, we continue to refresh our coffee lineup with new products, such as the Belgian Dark Chocolate Flavored Lottie, Raspberry Americano, and the Chiantao Longji Lottie, keeping our menu innovative and engaging. In non-coffee categories, we continue to enrich our product metrics and enhancing quality, including the launch of our cheese-covered cereal and the full upgrade of our Mocha Land's lineup, supported by origin-based sources. This innovation further expanded our courage of full all-day, multi-occasion consumption demand, which strongly supports new customer acquisition and repeat purchases from existing customers.
Thank you for joining us. 也为本季度整体的客单架提供了有力支撑 此外 我们通过与知名艺术家潮玩IP的跨界联名 以及近期声约上市五周年庆生观等创意活动 持续深化品牌与年轻用户的情感连接与共鸣 在这些举措的推动下 一季度新增交易客户超2100万 月均交易客户同比增长25%超9300万 得益于产品吸引力品牌创新力以及交付便利性 本季度新老客户人均杯量同比均有提升 进一步验证了规模扩张与消费增长的良性循环 On the customer side, we remain committed to a customer-first approach, delivering a compelling value proposition across quality, affordability, convenience, and emotional engagement.
This enables us to translate our SOAR network advantages into sustainable growth in both customer scale and consumption. During the first quarter, we further upgraded our customization offerings. In addition to the extended coffee bean selection, we also rolled out larger cup sizes across a broader range of hot and iced SKUs. These larger size offerings have been well received by customers, with encouraging early adoption rates and a positive contribution to overall average selling price during the quarter. We continue to deepen emotional connections with younger consumers through collaborations with well-known artists and pop culture IT, as well as our creative coconut latte fifth anniversary campaign. Supported by these initiatives, we added more than 21 million new transacting customers during the quarter. An average monthly transacting customers increased 25% year-over-year to over 93 million. Benefating from product innovation, brand engagement, and network convenience, average cost purchase per customer increased year-over-year across both new and existing customers, validating the positive flywheel between scale expansion and demand growth. 为核心的自主供应链建设,强化原产地布局,将规模优势转化为系统性的经营韧性。 近期,瑞幸咖啡青岛创新生产中心正式投产,成为公司第三座投产的烘焙基地。
至此,青岛、平南、昆山、再建的厦门四地协同,总产能15.5万吨的烘焙供应矩阵进一步成行。 核心供应链弹性与稳定性显著增强 为业务规模化扩张提供了更坚实的支撑 同时我们依托供应链规模优势深化产业链协同 助力原产地产业升级 本产季 我们加大国内采购力度 采购云南咖啡豆超3万吨 构建了更加多元稳健的海内外产区协同的供应体系 也为云南咖啡种植者提供了稳定收入与长期信心
In addition, on the sustainable supply chain front, we continue to strengthen our proprietary supply chain centered around coffee games. deepening our presence in origin regions, and translating our scale into greater system-wide resilience. Recently, our Qingdao Innovation Production Center's common operations, becoming our third roasting facility to come online. With facilities in Qingdao, Qingdao, Qingdao, and Qunshan fully operational, and Xiamen under construction. We are building a poorly-naked roasting network with total annual capacity reaching 155,000 tons. This further enhances the flexibility and reliability of our core supply chain, providing strong support for our continued scale expansion. At the same time, we continue to leverage our scale to deepen collaboration across the value chain and support the development of coffee origin regions. During the current Chavez season, we increased our domestic sourcing, procuring over 30,000 tons of coffee beans from Zin Dan. This not only strengthens the diversity and resilience of our sourcing network across both domestic and international origins, but also provides stable income and long-term confidence for local growers. In addition, through partnerships with research institutions and support for professional coffee competition, we are integrating our supply chain capabilities into our ESG initiatives, contributing to the sustainable and high-quality development of China's coffee industry. 增长空间十分广阔 当前阶段 我们坚定聚焦高质量规模增长
保持扩张速度 门店质量与运营效率的动态平衡 依托数字化驱动的高效率 高便利性的商业模式 把握行业结构性机遇 直线长期可持续增长 面对复杂多变的市场性能环境 以及去年外卖补贴带来的高技术影响 我们相信 瑞幸行业领先的规模化布局 将支撑公司穿越短期波动 并逐步释放长期增长与盈利潜力 未来 我们将持续通过产品创新 品牌创新和体验创新 不断挖掘消费潜力 推动业务稳健发展
In summary, China's coffee market remains in a rapid growth phase, with consumer demand continuing to extend and a significant long-term potential ahead. At this stage, we remain firmly focused on high-quality scaled growth, maintaining a dynamic balance among expansion pace, store quality, and operational efficiency. Our digitally-driven business models built on high-efficiency and contingent positions as well to capture structural growth opportunities and deliver sustainable long-term growth. Amid a dynamic and evolving competitive landscape, as well as a high comparison base created by last year's delivery subsidies, We believe our industry-leading scale will enable us to navigate near-term volatility while unlocking long-term growth and profitability. Looking ahead, we will continue to drive innovation across product development, brand engagement, and the customer experience to further low consumption potential, support sustained business growth, and strengthen our leadership position in the market. Finally, we would like to thank our customers, partners, and investors for your continued your trust and support, as well as our 190,000 login team members for your dedication and hard work. We remain committed to supporting the healthy development of China's coffee industry, building a world-class coffee brand, and creating sustainable long-term value for our customers, partners, and shareholders.
Thank you, Jingyi. Good day, everyone. Thank you for joining today's call. We deliver solid top-line growth while maintaining financial fiscal plan in the first quarter. Despite the impact of a higher delivery mix, underlying operating efficiency improves both at store and group levels. As we continue to scale our business and strengthen our market leadership, we believe we are well-positioned to drive operation leverage and profitability over time, supported by our sustained quality growth. Let's now look at our financial performance in detail. In the first quarter, total net revenues increased by 35% year-over-year to around R&B $12 billion, primarily driven by a 35.8% year-over-year increase in GMV to R&B $14.1 billion. This growth was supported by higher-cut volumes across our self-operated and partnership stores, a result of our expanding store network and a growing base of active transacting customers. Revenues from productive sales increased by 32% year-over-year to R&B around $9 billion, mainly reflecting the solid performance of our self-operated stores, breaking down our productive sales into three streams. Net revenues from fractured food drinks were R&B $8.3 billion, representing about 69% of the total net revenues. Net revenues from other products will R&B $566 million, or about 5% of the total net revenues. Net revenues from others will R&B $157 million, or roughly 1% of the total net revenues. Looking at productive sales from the perspective of company-owned stores, Revenues from self-operated stores increased by 33% year-over-year at RMV $8.6 billion. Same-store self-growth was largely stable for this quarter amid the rapid expansion of our store network. Store-level operating profit increased by 6% year-over-year at RMV $1.2 billion, with self-operated store-level operating margin of 13.6%. Revenues from partnership stores increased by 45% year-over-year to about R&D $3 billion, accounting for 25% of the total net revenues. This strong growth was mainly supported by increased sales of materials and improved contributions from profitable partnership stores, particularly reflecting the outer performance of partnership stores in the lower-tier cities during the Chinese New Year holiday seasons. Cost of materials as a percentage of the total net revenues remained stable year-over-year at around 40%. In absolute terms, cost of materials increased by 36% year-over-year to RMB 4.9 billion in line with our business expansion. Store rental and other operating costs as a percentage of total net revenues decreased to 25.5% from 26.3% in the same period of 2025. In absolute terms, these expenses increased by 31% a year-over-year to R&B's $3.1 billion, driven by higher payroll costs from volume growth and the rising rental expenses due to continued store expansion. Delivery expenses increased by 9% year-over-year to RMB $1.3 billion, driven by a significant increase in delivery orders through food delivery platforms. As a result, delivery expenses as a percentage of total net revenues increased to around 11% from around 8% in the same period of 2025. However, our delivery cost per order declined year-over-year, reflecting better efficiency as the scale of our operation. Sales and marketing expenses as a percentage of the total net revenues were 6.1% compared to 5.6% in the same period of 2025. In absolute terms, sales and marketing expenses rose 48% year-over-year to R&D $732 million, when they're driven by increased advertising and promotion expenses as well as higher commission fees paid to full deliver platforms as delivery volumes increased. General and administrative expenses as a percentage of the total net revenues decreased to around 7% from around 8% in the same quarter of 2025. In absolute terms, TNA expenses rose 25% in the year to RMB 800, based to $1 million, many driven by higher payroll costs and share-based compensations, as well as interest in investment in research and its development. Our gap on earning profit was R&B $760 million, with an operating margin of around 6%, compared to R&B $735 million, around 8.3% in the prior year period. mainly reflecting higher delivery-related expenses as delivery volume increased. On a non-GAAP basis, operating profit was R&B $898 million, with a margin of 7.5%. Net profit was at R&B $506 million with a net margin of 4.2%, compared to R&B $524 million and 5.9% in the prior year period. On a net gap basis, net profit was R&B $686 million with net margin of 5.7%. Looking at our balance sheet and cash flow, we generated around R&B $791 million in net operating cash during the first quarter of 2026. As of March 31st, 2026, our total cash position, which includes cash and cash equivalents, restricted cash, term deposits, and short-term investments, was about R&B $9.1 billion. Compared to around R&B 9 billion as of December 31, 2025, our healthy cash position provides flexibility to support the continuity of business expansion with allowing us to enhance shareholder returns. In closing, this quarter's continued momentum validates our long-term growth strategy. We remain dedicated to qualitative expansion with optimizing operational efficiency at every step, ultimately delivering sustainable value to our shareholders. With that, we will open the call for corrections. Operator, please go ahead.
Operator
Ladies and gentlemen, we will now begin the Q&A session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Jesse Zhu of J.P. Morgan. Jesse, please go ahead.
In a季度, we can see that it's a fast-forward mode. The fast-forward mode has over 2,500 plus. And at the speed-forward mode, the power mode is still a relatively stable level. I'd like to ask you about the next-forward mode of the next-forward mode, and how do we think about the average-forward mode and the cold-forward mode? That's what I'd like to say. Thanks for taking my question. This is Jesse Yishui from JP Morgan. Congrats on a very strong set of results and a very dynamic and competitive quarter, especially on margin say. A share repurchase is also a positive surprise. I'm sure shareholders are very happy today. My question is on growth and quality. So first quarter seems to be another fast quarter as we recorded another 2.5K net opening, at a similar pace to the past few quarters. At the same time, same-store sales stayed relatively stable, which is not bad. So if we look into the rest of the year, how should we think about the expansion pace and what's your strategy in balancing scale market share and average store performance? Thank you.
Thank you. Thank you very much for your question. I'll answer this question. 首先呢,关于大家都非常关注的这个开电与铜电,我们始终都是围绕着高质量规模增长这一个公司的核心策略。 在持续的扩张过程中呢,我们总体非常注意动态平衡开电速度,开电质量,运营效率和铜电表现等几个关键的指标。 So thank you for your question.
I will answer your question. So first, on the store extension and the same store sales, we remain focused on our core strategy of high quality scale growth.
So as we continue to extend, we focus on maintaining a dynamic balance across these important metrics between the pace of extension, store quality, operating efficiency, and same store performance. 从异图表现来看,我们延续了前期的既定的战略,整体上保持了相对较快的扩张。 从本质来看,门店的扩张是基于我们对于中国咖啡消费长期需求的判断所做出的战略性的投入。 所以在确保单电模型健康的前提下 以一个有竞争力的速度推进门电网络的建设
这也是持续强化最新的规模优势和长期市场布局的一个重要手段 investment based on our long-term view of China's coffee consumption demand. So while maintaining a healthy unit in Nomics, we are building our store network at a competitive pace to strengthen Locking Coffee's scale advantage and long-term marketing position. 瑞幸整体上处于一个较快的扩张的阶段 同时第一季度延续了这一个节奏 所以在这个背景下面 铜电出现一定的波动也是比较正常的 也完全符合我们的业务预期 从结果来看 异度自营门链铜电基本保持稳定 我们认为也体现了瑞幸整体经营的韧性 So recently, the delivery wall has created very strong growth opportunities in China's coffee consumption. So accordingly, we've been in the phase of a relatively rapid expansion, and this momentum continued into the first quarter. So in this backdrop, some level of fluctuation in our thin store performance is normal, and also this is well in line with our business expectations. Having said that, since your sales for our self-operated stores remained broadly stable in the first quarter, we believe it also reflects the resilience of our overall operations. And from a demand perspective, as mentioned earlier, The strong performance in low-tier markets during the Chinese New Year further validated the ability of our nationwide well-balanced store network as we capture and convert demand. At the same time, we don't view demand as static in addition to a natural increase in the consumer's purchase frequency as coffee consumption habits develop. Our ongoing supply-side investment, including our store network expansion and our product innovation, also helps with stimulation and creation of new demand.
This underpins our confidence in our long-term safe-store performance as well. 出现一定的波动,但于是同时,我们也正在持续通过一系列的经营举措进行对冲,包括强化产品的创新能力,提升咖啡产品的专业度,丰富非咖啡产品的产品矩阵等等,以及优化客制化的体验,从而不断地拓展消费的场景,提升转化效率和消费的频次。
as we move into the comparison period impacted by last year's elevated delivery subsidies, our thin-store sales may face some short-term volatility. But at the same time, we are actively managing this through product innovation, continued enhancement of our professional coffee offerings, expansion of our non-coffee portfolio, as well as further improved customization.
So with all these efforts, We think we will help with broaden the consumption scenarios, improve conversion, and increase frequency. 总结一下,我们相信在高速发展的过程中,铜电表现即使短期有所波动,但从更长的周期来看,整体趋势走向必然会是健康向上的。 我们对长期的铜电表现充满了信心。这是对于第一个问题的回答。谢谢。 Yes.
So, in conclusion, while same-store performance may fluctuate in the short term with our rapid growth, but we believe the long-term trend will remain healthy and upward. We remain confident in our same-store performance in the long run. This is my response to your first question. Thank you.
Operator
Our next question comes from Linda Wong with Macquarie. Linda, please go ahead with your question.
So let me just say into English. This is Linda Huang. I'm from Macquarie. So we are very pleased to see the company's launch of the share repurchase scheme. So I would like to know that about the key considerations and the strategic motivation behind initiating the repurchase program. And additionally, I also want to know that whether the company will consider adopting other shareholder reward initiatives, such as the cash dividend distribution going forward. Thank you very much.
Thank you very much. First, we have released the $3 billion of the stock market return to the market. 核心还是源于我们对于中国咖啡市场长期潜力的一个坚定的看好 以及对于公司未来增长前景和长期价值的充分的信心 经过过去六年多的发展 瑞幸建立了扎实的基本面 经营业绩持续提升 新营的状况也更加健康 这些都为我们进行普通回报提供了坚实的基础 Thank you for your question.
So fundamentally, our decision to launch the 300 million share-by-back program at this stage reflects our strong confidence in the long-term potential of China's coffee market. Also, it gives our own growth prospects and our ability to create long-term value. So over the past six years, we've built a very solid fundamentals with improving our and increasingly healthy cash flows, which supports our ability to return capital to shareholders. As we enter a more mature stage of development, we are placing greater emphasis on capital allocation discipline and the efficient use of our capital. While continuing to support our strategic investments and steady business growth, we aim to enhance long-term shareholder value in a more proactive and sustainable way.
So our FedEx program is a key step in optimizing our capital structure and strengthening shareholder returns. 另外关于未来股东的回报安排,我们始终保持着开放和积极的态度,由于众所周知的历史原因的影响,目前公司短期还不具备分红的条件,但我们未来会结合经营表现,现金流的状况,长期发展的需求,综合评估包括回购分红在内的各类股东的回报方式。 在平衡业务发展与股东回报的基础上,持续为股东创造长期可持续的价值。谢谢。
long-term development need. Our goal is to continue delivering sustainable and long-term value to our shareholders while maintaining an appropriate balance between our business growth and shareholder returns. Thank you.
Thank you. Thank you very much. I believe this is a lot of investors. Thank you, Guan Li-Tian.
Operator
Due to time constraints, no further questions will be taken at this time.
This concludes the question and answer session I'd like to turn the call back to the management team for any closing remarks thank you everyone for joining our call today if you have any further questions please feel free to contact our IR teams this concludes today's call we look forward to speaking with you again next quarter thank you once again the conference has now concluded you may disconnect Thank you.
