(Yicai) Nov. 18 -- Luckin Coffee, a leading Chinese coffee chain, said profit fell 2.7 percent in the third quarter because of a drop in its profit margin after delivery costs surged due to the growing competition between food delivery platforms in China.

Net profit was CNY1.3 billion (USD182.9 million) in the three months ended Sept. 30, the Xiamen-based company said in a financial report released yesterday. Revenue jumped 50 percent to CNY15.3 billion (USD2.2 billion) from a year earlier, thanks to adding 3,008 new stores and a record 112.3 million average monthly customers.

Luckin Coffee's income from self-operated shops jumped 48 percent to CNY11.1 billion, while that from partnership stores surged 62 percent to CNY3.8 billion. The firm had 29,214 outlets worldwide as of the end of September, with 18,882 self-operated and 10,332 partnership shops. 

Delivery subsidy intensity has "begun declining rapidly" entering this quarter, Guo Jinyi, chief executive of Luckin Coffee, said at an earnings conference call. However, elevated coffee bean prices may weigh on growth into early next year, he added.

Luckin Coffee's profit margins shrank because the delivery subsidy battle in China sharply inflated logistics and commission expenses, according to the company. Its delivery costs surged 211 percent to CNY2.9 billion, pushing its generally accepted accounting principles operating margin down to 11.6 percent from 15.5 percent. 

Deliveries will remain supplementary to the largely pickup-based coffee consumption model in China due to cost and product-quality considerations, Guo pointed out.

Luckin Coffee's store-level operating margin for self-operated shops fell to 17.5 percent from 23.5 percent, while net income dropped to CNY1.28 billion last quarter from CNY1.31 billion a year earlier, with net margin narrowing to 8.4 percent.

Regarding Luckin Coffee's plan to relist, Guo said there is "no definite timetable" for returning to the main board in the United States.

Luckin Coffee's cash and short-term investments reached CNY9.4 billion as of Sept. 30, up from CNY5.9 billion at the end of last year, boosted by CNY2.1 billion in operating cash flow.

Editor: Martin Kadiev