Today's conference is being recorded. At this time, I would like to turn the call over to Ms. Alicia Guo, the Head of Investor Relations of Luckin Coffee, for prepared remarks and introductions. Please go ahead, Alicia.
Hello, everyone, and thank you for joining us on today's call. Luckin Coffee announces Q1 2024 financial results earlier today. Today, you will hear from Dr. Jinyi Guo, Chairman and CEO of Luckin Coffee, and Ms. Jing An, CFO of Luckin Coffee. After the company's prepared remarks, the management team will conduct a question and answer session based on questions submitted via the company's webcast. We will be referring to a slide presentation on today's call, which can be found via a conference call webcast link, as well as on the company's IR website. The IR website link is investor.lkcoffee.com. During today's call, the company will be making some forward-looking statements regarding future events and results. Statements that are not historical facts, including but not limited to statements about the company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties.
Further information regarding these and other risks is included in the company's filings with the SEC. With respect to any non-GAAP measures discussed during the call today, the accompanying reconciliation information related to those measures can be found in the earnings press release issued earlier today. During today's call, Dr. Guo will speak in Chinese, and his comments will be translated into English. Now, I would like to turn the call over to Dr. Guo Jinyi, Chairman and CEO of Luckin Coffee. Dr. Guo, please go ahead.
[Foreign language]
Hello, everyone. Welcome to today's earnings conference call, and thank you for continuing to support Luckin Coffee. I am Luckin Coffee's Chairman and CEO, Jinyi Guo. This quarter, despite a market landscape filled with both opportunities and challenges, Luckin Coffee continued to achieve rapid revenue growth and reach a new record high in our total number of stores. This was made possible by leveraging our unique business model, continuous product innovation, and scale advantages. However, as industry competition intensifies and macroeconomic conditions fluctuate, we have experienced a slight dip in profits. Adjusting to the current market environment, Luckin Coffee has quickly recalibrated its product innovation and scale advantages. However, as industry competition intensifies and macroeconomic conditions fluctuate, we have experienced a slight dip in profits.
Adjusting to the current market environment, Luckin Coffee has quickly recalibrated its approach and solidified a resilient, sustainable expansion strategy so as to laid a solid foundation for the company's sustainable growth. Meanwhile, Luckin Coffee- [Foreign language] These stores, there are 12,199 self-operated stores and 6,391 partnership stores. We continue to lead the market, extending our comparative advantage over competing brands. As competition intensifies in the Chinese coffee market, we will remain vigilant in addressing customer needs and adhering to a prudent and sustainable store expansion strategy. While we plan-
[Foreign language]
Luckin Coffee remains proactively committed to China's carbon peak and neutrality targets. As part of this effort, we are dedicated to incorporating the principles of low carbon and sustainability across all aspects of our raw material procurement, manufacturing processes, operational activities, and consumer interactions. In March 2024, Luckin Coffee was proud to commence the trial- in detail.
Let's start with our financial highlights. In the Q1 of 2024, the total net revenues for the quarter reached RMB 6.3 billion, marking an increase of 41.5% compared to the same period last year. The growth was primarily driven by a surge in product sales. The expansion of us as a clear demonstration of our dedication to diversifying our geographical footprint and seizing fresh market opportunities. In the Q1 , our average monthly transacting customers reached 59.9 million, representing a staggering 103.2% increase from the same quarter last year. This underscores that navigated through these challenges and pursue strategic growth opportunities. Next, I would like to delve into the details of our margin performance.
From a group level perspective, our reported overall operating loss for the Q1 of 2024 was RMB 65.1 million, equating to an operating margin of -1%. Our general and administrative expenses as a percentage of revenue, stabilized at 8.9% in the Q1 of 2024, marginally increasing from 8.1% in the same quarter of 2023. In absolute terms, our G&A expenses experienced a 54.2% increase year-over-year, driven by augmented payroll cost, R&D expenditures, office supplies, and the rise in share-based compensation from restricted share units and options granted to management and employees. Store rental and other operating costs roughly doubled this quarter compared to the same period last year.
This uptick correlates with expansion in the numbers of operational stores and the volume of items sold this year, which resulted in the increase of payroll expenses, store rentals, utilities, and other operational costs. Compared to the previous year, our sales and marketing expenses as a percentage of revenue increased from 4.5% to 5.2%, and the absolute value of such expenses rose by roughly 63.4% year-over-year. This increase is reflective of our strategic investment in enhancing brand recognition, expanding product education outreach, and reinforce our market position through diverse channels, thereby attracting new customers and retaining current customers.
Concurrently, commission fees paid to third-party delivery platforms saw a sustained increase to accommodate the increased number of delivery orders. Loss and expenses related to the previously reported fabricated transactions and related restructuring were -RMB 52.5 million, as the company was entitled to receive approximately $7.3 million, which is RMB 52.7 million, from its primary D&O insurance carriers, pursuant to an arbitration award in the Q1 of 2024. Then, let's move on to balance sheet and cash flow statements.
Following our restructuring in 2022 and the settlement of the federal class action suit, we have fully redeemed the offshore notes. This has enabled us to sustain a robust balance sheet, while unlocking flexibility to allocate excess financial capacity towards shareholder value. As of March 31st, 2024, our financial reserves, inclusive of cash, cash equivalents, restricted cash, and short-term investments, stood at approximately RMB 2.4 billion. This represents a reduction from the RMB 3 billion recorded at the close of 2023. This decrease was mainly attributable to the purchase of a property and equipment and raw materials to meet the company's rapid footprint expansion. During the Q1 , we had a net operating cash outflow of RMB 264.4 million, compared to a net operating cash inflow of RMB 1.1 billion in the same quarter of 2023.
Our substantial cash reserves, coupled with a sound balance sheet, provide a solid foundation that enable us to navigate risks effectively and secure a competitive edge in this unpredictable market environment. The modest start to our Q1 aligns with our internal projects, given our ongoing rapid expansion of store locations. The overall coffee market in China continues to exhibit a robust growth, with industry tending towards more sustainable levels.
Despite anticipating continued volatility in market dynamics and competition, we remain confident in our brand, our products, and our dedicated employees. We are optimistic about our future growth as we are leading the industry with innovative and popular products and strategic promotion initiatives, all of which hold the promise of further propelling our business forward. I will now turn it over to Jinyi for concluding remarks, followed by Q&A.
[Foreign language]
China's coffee industry is currently at a pivotal phase, characterized by significant growth and strategic opportunities. Despite intense competition, Luckin Coffee, as a leading brand in the coffee market in China, is committed to expediting the expansion of our store network, enhancing our supply chain, fortifying our digital prowess, streamlining costs, and elevating efficiency. These concerted efforts are designed to extend and cement our competitive lead, consolidate our market leading position, and realize sustained, robust, and rapid growth over the long term.
We're steadfast in our commitment to drive business expansion and increase market share, ensuring enduring value for our customers, shareholders, and all other stakeholders. We also remain dedicated to social responsibility and the pursuit of sustainable practices. Our ongoing mission is to offer superior quality at more attractive prices, providing customers with coffee that is both delicious and affordable.
With the vision of becoming a global recognized coffee brand, we're making daily strides towards achieving our goal of becoming a global, renowned, century-old brand with enduring prosperity.
Ladies and gentlemen, we will now begin the Q&A session. I will turn the call over to Alicia Guo at Luckin Coffee, who will moderate today's Q&A session.
Thank you. Now, let's begin with the first question: How does the company view the significant drop in profit in the Q1 of 2024? Will there be any adjustments regarding the store expansion strategy?
[Foreign language]
Thank you for your question. The profit drop in the Q1 of 2024 was attributable to a combination of objective factors and deliberate strategic adjustments. Objectively, the cold weather and considerable temperature variations in the previous quarter had a tangible impact on customer visits. Concurrently, the Chinese coffee industry is undergoing a period of rapid expansion, brimming with strategic opportunities, which has led to fierce competition. In light of these dynamics, our company has prioritized the market share as the core focus of our growth strategy and recalibrated the pace of our store expansion. This aggressive expansion strategy has allowed us to widen the gap with our competitors.
The reorganization of our store portfolio has accentuated the seasonal nature of our stores, particularly those in malls and on street fronts. Nevertheless, the emergence of a holiday shopping trends has contributed to a more stable foundation for the company. With the onset of spring and warmer temperatures, we have seen an uptick in sales volumes, yet we continue to anticipate more challenges in the upcoming Q2 , similar to our Q1 challenges. In the current, increasingly competitive landscape, Luckin Coffee, as the leader in the Chinese coffee market, is committed to a robust and sustainable store expansion strategy, while maintaining our high standards for new stores, guaranteeing the excellence of each establishment.
We will continue to solidify our leading position in the industry through innovative products and customer-focused pricing - to a robust and sustainable store expansion strategy, while maintaining our high standards for new stores, guaranteeing the excellence of each establishment. We will continue to solidify our leading position in the industry through innovative products and customer-focused pricing strategies, as we persist in our pursuit of generating substantial long-term value.
Thank you, Dr. Guo. Let's move on to the next question. Are there any updates to the company's capital strategy?
[Foreign language]
As we have mentioned before, we will continue to monitor the U.S. capital markets, but our current emphasis is on the execution of our business strategy. As we have mentioned before, we will continue to monitor the U.S. capital markets, but our current emphasis is on the execution of our business strategy, which centers on the enhancement of our operational and developmental pursuits. We have no specific timeline or schedule for up-listing on any main board market currently. Our current focus is on executing our strategic plan through the provision of superior products and services to our customers, with the objective of increasing our market penetration and ensuring consistent long-term returns for our investors.
Thank you, Dr. Guo. Listen, that is all the time we have for today's earnings conference call. We thank you for your participation on today's call. We look forward to providing you with regular business updates and look forward to speaking with you again next quarter.
This concludes our call today. You may now disconnect.