LKNCY - Why did Luckin Coffee stock perk up on Thursday? Earnings impress despite lockdown overhang

Luckin Coffee ( OTCPK:LKNCY ) stock rose about 7% on Thursday after the Beijing-based chain posted strong year over year revenue growth.

For the fourth quarter of 2022 the Chinese coffee chain posted adjusted EPADS of $0.08, up from just one cent in the year prior. Meanwhile, revenue rose over 50% from the prior year quarter to $535.7M. Rapid store expansion remained underway as well with the company opening 368 new locations during the three month period. The growth came despite lingering impacts from COVID-19 lockdowns into the fiscal fourth quarter for the chain.

The company did not offer formal guidance for 2023, but voiced optimism that the lifting off restrictions will help lift sales during the year. The company’s earnings release added that the number of store closures dropped from a peak of 1500 in 2022 to “single-digits” in January amid China’s reopening.

“While we remain cautious, we believe that lifting of pandemic-related restrictions will ultimately have a positive effect on consumer confidence,” CFO Jing An said in an earnings call on Thursday. “And with our professional team of leading partners and a strong network, we remain optimistic for the continued growth performance in 2023.”

Shares of the Beijing-based coffee chain rose 6.97% on Thursday.

Read the earnings call transcript .

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