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Why Luckin Coffee Stock Jumped 25% in July

Beth McKenna, The Motley Fool

What happened

Luckin Coffee (NASDAQ: LK) stock popped 24.6% last month, according to data from S&P Global Market Intelligence. The S&P 500 returned 1.4% in July. 

Investors who bought shares of the Beijing-based, technology-driven coffee retailer at its May initial public offering have been lucky, indeed. Since its IPO at $17 per share, Luckin Coffee stock has soared more than 52% through Aug. 9. 

Close-up of steaming coffee being poured into a white coffee cup sitting on a saucer with coffee beans scattered on surface in background.

Image source: Getty Images.

So what

We can attribute Luckin Coffee stock's robust July performance to investor enthusiasm surrounding the company's IPO and growth prospects. The young company, founded in 2017, is China's second-largest coffee chain and is gunning to overtake the country's top player, the mighty Starbucks (NASDAQ: SBUX)

Moreover, Luckin has plans brewing to expand beyond its native market. On July 22, it announced that it was forming a joint venture with Kuwait Food Company Americana, the largest integrated food product company in the Middle East, to launch a new retail coffee operation in the Greater Middle East and India.

Now what

Investors don't have long to wait for material news. Luckin Coffee is scheduled to report its second-quarter results on Wednesday, Aug. 14, before the market opens. Wall Street is expecting a loss of $0.43 per share on revenue of $130.3 million.


Beth McKenna has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com