(Yicai) Nov. 4 -- Luckin Coffee reported record profit for the third quarter, as the easing of the takeout subsidy war among Chinese food delivery giants, coupled with an uptick in in-store pickup orders, helped the coffee chain save approximately CNY1.1 billion (USD165 million) in delivery fees.

Luckin Coffee’s net income by Non-Generally Accepted Accounting Principles surged 50.9 percent in the three months ended Sept. 30 from a year earlier to CNY2.1 billion (USD320.5 million), the highest quarterly figure in the Xiamen-based company's history, according to its latest financial results released yesterday. Net revenue surged 17 percent to CNY17.9 billion (USD2.5 billion).

Delivery expenses plunged 38.1 percent in the third quarter from the year before to CNY1.8 billion (USD268.1 million), according to the report. Delivery costs accounted for 10 percent of total net income, compared with 18.9 percent in the same period last year.

The decline was mainly due to a significant shift in the firm’s order mix, as the proportion of in-store pickup orders increased while that of delivery orders fell, management said at the earnings call yesterday.

The big drop in takeout orders and delivery costs has boosted profitability at the company's self-operated stores, Chief Executive Officer Guo Jinyi said. Profit margins were not only significantly higher than a year earlier but they also largely returned to levels seen before the food delivery price war started last year. In the third quarter, the operating profit margin of Luckin Coffee's self-operated stores jumped 5.8 percentage points from a year ago to 23.3 percent.

The food delivery price war refers to the intense competition among takeout and on-demand retail platforms operated by Chinese internet giants Meituan, JD.com and Alibaba Group Holding. The platforms offer subsidies to restaurants and other food service businesses while encouraging them to offer competitively low prices on delivery orders. This puts pressure on restaurants' dine-in businesses by making takeouts more attractive to consumers.

However, the impact of the price war continues to weigh on Luckin Coffee’s business, with its same-store sales performance, which is a key industry indicator of a retailer's operating health, yet to return to growth. Same-store sales growth at Luckin Coffee’s self-operated stores stood at minus 11.1 percent in the third quarter, compared with 14.3 percent in the same period last year, according to the financial report.

Guo attributed the decline partly to a high comparison base, noting that the food delivery price war peaked between July and August 2025, making year-on-year comparisons particularly challenging in the third quarter of 2026.

Although the significant reduction in platform subsidies this year continued to affect same-store sales in terms of both transaction volume and average selling prices, the trend improved steadily during the quarter and the recovery is expected to gain further momentum in the fourth quarter, he said.

Luckin Coffee did not provide specific financial guidance for the coming quarters.

Editor: Kim Taylor