The Chinese company’s latest earnings offer a look into its recovery since it admitted in 2020 to making up some of its sales numbers, leading to its ejection from the Nasdaq.
In an interview Wednesday, CEO Jinyi Guo acknowledged that many analysts may still be skeptical of Luckin’s finances.
“Because of the pandemic, there are a lot of people not able to travel to China, to see for themselves how it looks like in our shops,” he added.
“If they’re able to see for themselves how we operate, then they would know that the figures are true, and they shouldn’t be skeptical about it.”
The Eileen Gu effect
Luckin also has one particular person to thank for its recent performance: Olympic superstar Eileen Gu.
In January alone, the company opened 360 stores — much “faster” than its normal rate, in anticipation of greater sales, Guo said.
“By January and February, we sort of had an inkling that she’s going to win a gold medal in the Olympics,” said the CEO.
Like most businesses, Luckin has been hit by the recent Covid-19 surge in China, with “an average of around 700 daily temporary store closures” in March and about 950 from April onward, Chief Financial Officer Reinout Schakel said on an earnings call.
But the company says that overall, it has been relatively shielded from mass lockdowns because of the locations of many of its stores.
Many Luckin outlets are in office buildings or universities, meaning “we were able to remain normal operations in these relatively closed off locations,” according to Guo.
Starbucks, however, hasn’t been so lucky: Sales at outlets open for at least a year dipped 23% in China in the quarter ended April.
— CNN’s Wayne Chang contributed to this report.