Will Luckin Coffee's Growth-at-All-Costs Model Turn Out Well for Investors?
When it comes to artisanal coffee houses, the name that immediately comes to mind for most here in the U.S. is Starbucks (NASDAQ: SBUX). The coffee chain, founded in 1971, has a ubiquitous presence in North America and has expanded to almost every corner of the world.
There are not many competitors out there who can openly challenge Starbucks' global dominance, but a new upstart is certainly trying its luck in the nascent Chinese market. Its name is Luckin Coffee (NASDAQ: LK) and, considering it was only founded in 2017 in Beijing, it has managed to scale up its presence in that country in a very short timeframe.
Though it's been in operation for just two years, Luckin has grown its total store count in China from just 624 as of June 30, 2018, to 3,680 as of Sept. 30, 2019. That's a stunning fivefold store increase in just 15 months. Those thousands of stores have raised Luckin's average monthly transacting customers nearly ninefold from 1.2 million to 9.3 million over the same 15-month period. It's pretty clear why Luckin Coffee is being labeled as a growth stock.
Source Fool.com
