On August 1, global coffee chain giant Starbucks and local Chinese coffee brand Ruixing both released their results for the year to the end of June 2023.。

Ruiyu Q2 turnaround, officially into the "ten thousand stores" era

Ruixing's 2023 Second Quarter Earnings Performance Is Excellent。According to the data, the total net income of Ruixing in the second quarter was 6.2 billion yuan (RMB, the same below), up 88.0%。Net revenue growth was driven primarily by digital growth in the number of products sold, an increase in carrier stores, and an increase in the number of monthly transacting customers。In revenue, revenue from product sales was 47.15.6 billion yuan, up 87.0%。Revenue from cooperative stores is 14.85.8 billion yuan, accounting for 24% of total net income.0%, YoY growth of 91.1%。

Ruixing's net profit in the second quarter was 9.98.7 billion yuan, compared with a net loss of 1.100 million yuan。Non-GAAP net profit of 10.600 million, non-GAAP net profit margin of 17.1%, compared to 8 in the same period in 2022..1%。

Due to the expansion of the company's business, the total operating expenses of Ruixing in the second quarter increased by 64 year-on-year..5% to 50.300 million yuan。At the same time, operating expenses as a percentage of net income increased from 92 in the same quarter of 2022 due to enhanced economies of scale and the company's technology-driven operations..7% down to 81% in the second quarter of 2023.1%。

As of June 30, 2023, Ruixing's cash and cash equivalents, restricted cash, term deposits and short-term investments had 52.600 million, compared to 35 as of December 31, 2022..800 million yuan。The increase in cash flow was primarily due to operating cash generation。

Ruiyu's store expansion was very rapid in the second quarter.。Pre-opening and other expenses were $18.5 million, up 137.4%。The company explained that the increase in expenses was mainly due to the preparation of more stores in the second quarter.。In the second quarter, Rexroth's store pre-opening and other expenses accounted for 0% of total net income..3%, compared to 0.2%。

On June 5, 2023, with the opening of the flagship store on Zhongshan Road in Xiamen, Ruixing had 10,000 stores in the Chinese market, becoming the first coffee chain brand in China to break through 10,000 stores.。

Starbucks Q3 results slightly lower than expected, China market growth against the trend

Starbucks' third-quarter results show that Starbucks achieved revenue in the third quarter of 91.$6.8 billion, up 12.5%, slightly below market expectations of 92.900 million dollars。Net profit 11.$4.2 billion, up 25.1%。Adjusted EPS of $1, better than market expectations of 0.$95, compared to 0.79 USD。Operating margin from 15.9% expanded to 17.3%。

Same-Store Sales Up 10%, Below Market Expectations of 11%。Same-Store Sales Growth Below Expectations in North America and International。North American same-store sales up 7%, lower than expected 8.4%。Outside North America, same-store sales rose 24%, below expectations of 24.2%。But as Starbucks' second largest market, China's performance is very eye-catching。Improved demand in China drives Starbucks international growth, with Chinese same-store sales surging 46% in the quarter, boosting the company's international sales growth。

Starbucks China's fiscal third-quarter net income reaches 8.$21.9 billion, up 60% YoY and 10% QoQ。Star Club active members (who have spent in the past 90 days) reached 20.4 million, up 51% year-on-year and 2.6 million more than in the previous quarter.。

At the same time, Starbucks' omni-channel business in China is also growing rapidly, with sales of the outbound business dedicated to star delivery hitting a record high, up 63% year-on-year, accounting for 25% of total sales.。Fast (online, in-store) sales also hit a record high, up 64% year-on-year and accounting for 23% of total sales.。

"I am very encouraged by the performance of the Chinese market this quarter," said Starbucks CEO Laxman Narasimhan, "We want to build a brand that is highly connected to our Chinese customers and, in our unique way, achieve long-term success in this market!。"

The increasingly fierce Chinese coffee brand market

In the Chinese market, Starbucks and Ruixing are the two largest coffee brand chains at this stage.。With the growth of China's coffee market, the competition between the two companies has become increasingly fierce。

Starbucks has been in the Chinese market for 24 years since it entered China in 1999.。According to the financial report, Starbucks added 237 new stores in China in the third quarter, more than the sum of the previous two quarters.。As of the end of the quarter, Starbucks operated 6,480 stores in 250 cities in mainland China.。

Ruixing was founded in 2017, has been six years, compared to Starbucks, is a very young brand。According to Rexroth's earnings report, the number of net new stores opened in China in the second quarter was 1,480, plus five new stores opened in Singapore, up 15% from the end of the previous quarter..9%。As of the second quarter, Ruixing had 10,836 stores, including 7,188 self-operated stores and 3,648 cooperative stores.。

In the second quarter, Luckin launched a "Ten Thousand Stores Celebration" promotion, where any drink in the store is only 9.RMB 9, but only one promotional coffee per user per week。Under this promotional campaign, Ruixing's consumer users have grown significantly。In the second quarter, the average number of monthly trading customers surged 107 year-on-year..9% to 43.1 million。Ruiyu's product sales also rose and showed economies of scale, driving up store-level operating margins。In the second quarter of 2023, Ruixing's self-operated store operating margin was 29.1%, compared to 28 in the same period last year..4%。

"In June 2023, we reported a record 50 million transacting customers and opened our 10,000 stores, making us the first coffee chain in China with 10,000 stores, cementing our position as the largest coffee chain brand in China," said Guo Jinyi, Chairman and CEO of Ruixing Coffee.。To consolidate our momentum and leadership in the highly competitive Chinese coffee market, we recently announced our new brand plan "Lucky in Hand."。We have always believed that those who are steadfast and hard-working will have good luck.。"

In the phone call, he also said that in the future, Ruixiang plans to turn cost advantages into long-term feedback to consumers, not only to allow consumers to get tangible benefits, but also to further expand Ruixiang's market share and brand influence, and continue to promote and accelerate the development of China's coffee market.。

In the face of increasingly fierce competition in the Chinese market, Starbucks China CEO Wang Jingying said in a telephone conference that the competition had no significant impact on the third quarter results and was very satisfied with the performance of this quarter.。"We welcome competition because competition actually expands the coffee market and accelerates the popularity of coffee consumption."。Different brands bring different value propositions and consumption scenarios to customers.。From the first day Starbucks entered the Chinese market 24 years ago, we have focused on providing a high-end coffee experience, building an emotional bond with our customers and partners through high-quality coffee and a unique Starbucks experience that no other brand can replicate.。"We will continue to invest more in product innovation, store experience, digitalization and talent development to create more unique advantages and seize the unlimited opportunities in the Chinese market in the future."。"

Although Starbucks' expansion is far behind that of Rexroth, it is more "international" than Rexroth, thanks to years of deep work on the coffee chain.。

As of the end of the quarter, Starbucks had 37,222 stores worldwide, 51% of which were company-operated and 49% of which were authorized stores.。The United States is its largest market, with 16,144 stores.。Public information shows that Starbucks has a footprint in more than 70 countries around the world。

The first stop of the "sea" was chosen in Singapore.。However, Ruixing added only five new stores in Singapore this quarter, expanding at a much slower pace than in China.。

Although "going to sea" is a bit slow, but Ruiyu seems ambitious, Guo Jinyi said in the earnings report: "In Ruiyu Coffee, we will never be satisfied."。As we enter the second half of 2023, we will focus on delivering value to our customers and leveraging our scale advantages.。In the long run, this will put us in the best position to use our cost advantages to give back to our consumers, which not only directly benefits them, but also increases our market share and brand awareness。We are committed to accelerating the education and development of the Chinese coffee market, expanding our global footprint and allowing the world to enjoy the quality products and services of Ruixiang Coffee.。Going forward, we are committed not only to maintaining our competitive edge, but also to expanding our competitive edge while capturing significant growth opportunities at home and abroad to create long-term value for our shareholders and drive sustainable growth.。"