Luckin Coffee's net profit plummets by 39%

The delivery war is profoundly transforming the coffee market.

On the evening of February 26, 2026, Luckin Coffee released its earnings report. The financial statement shows that in the fourth quarter of 2025, Luckin’s revenue increased by 32.9% year-on-year to 12.777 billion yuan, while net profit declined by 39% year-on-year to 518 million yuan.

The decline in Luckin’s net profit is influenced by the delivery war.

Luckin Coffee’s co-founder and CEO Guo Jinyi stated at the earnings conference that the subsidies from delivery platforms have significantly contracted during the industry’s off-season. Although the proportion of delivery orders has decreased quarter-on-quarter, it remains at a relatively high level.

Specifically, in financial terms, in the fourth quarter of last year, Luckin’s delivery expenses accounted for a 4.1 percentage point increase in net revenue compared to the same period last year, mainly due to higher delivery costs caused by increased delivery orders. In the full year of 2025 and the fourth quarter, Luckin’s delivery costs reached 6.8787 billion yuan and 1.6309 billion yuan, respectively, up 143.8% and 94.5% from 2.8211 billion yuan and 838.7 million yuan in the same periods of 2024.

Luckin Coffee’s CFO An Jing revealed that in the fourth quarter of last year, the company’s increase in delivery costs was mainly driven by a significant rise in delivery orders from delivery platforms. The good news is that the average delivery cost per order has decreased year-on-year, reflecting operational efficiency improvements brought about by Luckin’s scale expansion.

It is important to note that the delivery war does not have entirely negative effects on Luckin.

For example, the company continues to expand. By the end of the fourth quarter of last year, Luckin’s total store count reached 31,048, including 20,144 self-operated stores and 10,744 partnered stores. In that quarter, Luckin’s self-operated stores generated revenue of 9.547 billion yuan, a year-on-year increase of 32.0%; same-store sales growth was 1.2%, an improvement over the -3.4% in the same period of 2024.

It should also be noted that the delivery war is impacting Kudi.

Starting from February 1, 2026, Kudi Coffee abandoned the 9.9 yuan flat price across the board, retaining only 3 to 7 products at that low price in a special promotion zone. One reason for this is that under the dominance of strong delivery platforms, Kudi’s own channels’ 9.9 yuan special price has limited effectiveness. Most of Kudi’s customer traffic still comes from delivery, and delivery platforms have never implemented a uniform low price across all channels.

This, to some extent, means that Kudi has lost full pricing control over its products.

Against this background, Luckin aims to find a way to break free from the delivery war.

Previously, Guo Jinyi emphasized that in-store pickup will remain the main form of consumption, while delivery plays a more supplementary role during certain stages of market development. “Firstly, compared to the mainstream price range of freshly brewed coffee in China, the fulfillment cost of delivery is too high, making it highly sensitive to single cup pricing, which results in poor unit economic benefits; secondly, longer delivery times may affect consumers’ expectations of immediacy and the coffee tasting experience, which is not an ideal consumption model. Luckin’s store model centered on self-pickup allows for a dense layout across nearly all consumption scenarios, bringing us as close to customers as possible—this is Luckin’s core advantage and the foundation for long-term growth. Over time, the coffee business will naturally shift back to a self-pickup-oriented model, although this transition may take a considerable amount of time.”