Ladies and gentlemen, welcome to Luckin Coffee's First Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode during management's prepared remarks. Today's conference is being recorded. At this time, I would now like to turn the call over to Mr. Bill Zima at ICR for opening remarks and introductions. Please go ahead, sir.
Hello, everyone, and thank you for joining us on today's call, the company's First Investor Conference Call in two years. Luckin Coffee announced its First Quarter 2022 Financial Results earlier today. A press release is now available on the company's IR website at investor.luckincoffee.com. Today, you will hear from Jingyi Guo, Chairman and CEO of Luckin Coffee, Reinout Schakel, CFO and CSO of the company, and Shan Jiang, Senior Vice President. Due to time constraints, we will not have a Q&A session on this call. 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. Again, the IR website link is investor.luckincoffee.com. During this 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. During today's call, Dr. Guo will speak in Chinese and his comments will be translated into English. With that said, I would now like to turn the call over to Dr. Guo, Chairman and CEO of Luckin Coffee. Please go ahead.
大家好，欢迎各位参加今天的电话会，也感谢各位对瑞幸咖啡的持续关注和支持。我是瑞幸咖啡的董事长兼CEO郭谨一。在中文中，我的名字很好记，谨言慎行的谨，表里如一的一。我在北京交通大学获得了交通运输规划与管理专业的工学博士学位，后续有多年的科研、政府和企业的工作经验。我平时的个人爱好是跑步和咖啡，也正是出于自身对咖啡的热爱，我在2017年参与创立了瑞幸咖啡。公司成立之初，我主要负责产品研发，帮助瑞幸搭建了第一代产品研发框架体系。2020年五月，在造假风波后，我临危受命，担任了公司的CEO。两个月后，公司的董事会任命我为董事长。
Hello, everyone, and welcome to today's conference call. Thank you for your ongoing interest and support of Luckin Coffee. I'm Jingyi Guo, the Chairman and CEO of Luckin Coffee. In Chinese, my name is easy to remember. Jin is from the Chinese idiom, 谨 言 慎 行 , which means to be cautious in word and action. Yi is from the Chinese idiom, 表 里 如 一 , which means consistent in deed as well as in word. I obtained a PhD in transportation planning and management from Beijing Jiaotong University, and I have worked for many years in scientific research, government, and business. My personal hobby includes running and coffee, and it is from my love for coffee that drove me to join Luckin Coffee in 2017. I was originally responsible for product R&D and helped Luckin Coffee build the first generation framework system of product R&D.
In May 2020, during the difficult and challenging time right after our disclosure of the fabricated transaction, I was appointed by the board as CEO of Luckin Coffee. Two months later, I was elected to become the Chairman of the board.
过去两年对公司对我个人都是重大的考验。感谢瑞幸全体团结奋进的员工，感谢忠诚热情的消费者，使得瑞幸得以凤凰涅槃，浴火重生。时隔两年，公司再一次举行业绩沟通会，这次会议的内容比较多，受时间限制，没有设置问答环节。我特别希望未来能够和各位投资人有更多更直接的沟通。我也希望自己能像我的名字一样，做到谨言慎行，表里如一，营造透明的企业文化，和各位朋友建立更多更长久的信任。
The past two years have been a great challenge for both me personally and the company. Thanks to all of our united and dedicated employees, as well as our loyal and enthusiastic consumers, we were able to rise from ashes. This is the first time we have held a conference call in the past two years, and we have a lot of information to share. Therefore, due to certain constraints, we will not have a Q&A session on this call. We look forward to engaging with you more frequently and directly down the road. I aspire to lead by the Chinese idiom from which my name is derived, which is to be present and consistent in my words and actions. We endeavor to create a transparent corporate culture, and I look forward to building a long-term relationship with all of you.
在刚刚过去的2022年一季度，尽管受到疫情影响，公司的业绩依然稳定增长，并且第一次实现了经营利润转正。这证明了瑞幸咖啡的商业模式。在此感谢近两万七千名瑞幸伙伴的坚守努力，感谢广大客户的支持厚爱，也感谢投资人的充分信任。过去的两年，瑞幸咖啡在战略、运营、治理机制、管理架构和组织文化等方面实现了根本性的提升。可以说除了公司的名字没有变以外，瑞幸已经涅槃重生，成为一家全新的公司。
In the first quarter of 2022, despite the impact of COVID-19, our performance continued its strong momentum and we achieved our first quarterly reported operating profit since our inception. This validates the Luckin Coffee business model. Now I want to say thank you to our 27,000 Luckin team members for their persistent efforts, to our customers for their ongoing loyalty and support, and to our investors for their trust. Over the past 2 years, Luckin Coffee has implemented fundamental improvements in the areas of strategy, operations, corporate governance, management structure, and organizational culture. Although the company has retained the same name, Luckin Coffee has been reborn and is essentially a new company.
公司的上一届董事会在过去的两年中，励精图治，带领瑞幸走出了至暗时刻，实现了逆风翻盘。上周，为了进一步提升公司治理和战略能力，董事会进行了调整，包括补选了四位新董事。这一届董事会新老结合，有着丰富的战略、运营、财务和法律背景。我们相信新一届董事会能够引领瑞幸再上高峰。
Over the past two years, the previous board of directors have helped lead us out of our darkest period and guided our turn around. Last week, to further enhance our corporate governance and strategic capability, we made changes to our board of directors, including welcoming four new members. The current board of directors combines old and new members with experienced backgrounds in the areas of strategy, operations, finance and legal. We believe our new board of directors will lead Luckin Coffee to achieve new heights.
公司的核心管理层共有七位成员。除了我以外，曹文宝分管运营，周伟宁分管产品及供应链。阳飞作为公司首席增长官和联合创始人，分管品牌营销和增长。吴刚分管对外合作。这次和我一同出席沟通会的Reinout和江山，分管财务和内控合规工作。他们也是解决境外重组等相关历史问题的具体负责人。相关工作一会儿会分别向大家做具体介绍。瑞幸的核心管理团队都具备良好的学历和职业背景，大家一起经历了艰难时刻的考验，也会继续凝聚在一起，为瑞幸的未来努力奋斗。
As can be seen on slide 3. Our core management team has a total of 7 members. In addition to myself, Mr. Wenbao Cao is currently in charge of company's operations. Mr. Weiming Zhou is in charge of product and supply chain. Co-founder Mr. Fei Yang is acting as the company's Chief Growth Officer, is in charge of brand marketing and sales growth. Mr. Gang Wu is in charge of public affairs and strategic cooperation. Mr. Reinout Schakel and Mr. Shan Jiang, who have joined me on the earnings call today, are in charge of finance and internal control and compliance respectively. They are also the individuals responsible for solving historical issues, including the restructuring of our financial indebtedness. Reinout and Shan will each provide insight into their efforts later in the call.
I'm proud that we have assembled this core management team with strong academic credentials and professional experience. This core management team has been working together during our most challenging period and will continue to work hard together for Luckin Coffee's future.
回顾2022年一季度，面对疫情冲击，我们仍然实现了逆势增长，其中净收入超24亿元，同比增长90%。自有门店同店销售增长率为42%。净增门店数556家，同比增长276%。经营利润首次转正。后面我们的CFO会对公司的业绩和财务表现做更详细的分享。在过去两年的时间里，瑞幸咖啡已经转型升级成为现代治理架构下由专业职业经理人团队领导的企业，通过不断强化内控合规体系，彻底完成了逆势切割。
Despite the impact of COVID-19 outbreak, we still managed to achieve strong growth in the first quarter of 2022. Total net revenue exceeds CNY 2.4 billion, representing a year-over-year increase of 90%, while the first quarter same store sales growth rate of our self-operated stores reached 42% year-over-year. The net number of new stores opened was 556, increasing by 276% year-over-year, and our operating profit turned positive for the first time in our history. Our CFO, Reinout Schakel, will share more details on the company's financial performance later on during the call. Over the past two years, Luckin Coffee have transformed and developed into a company with an appropriate corporate governance structure, led by professional managers.
Our continuous efforts to strengthen our system of internal controls and compliance has enabled us to cut ties with the past.
两年以来，我们的董事会和管理层一直在深刻思考和重塑公司的文化。关于瑞幸的使命，创造幸运时刻是我们创业的初心，更是瑞幸名字的来源。我们希望这杯咖啡能够给消费者带来一份幸运和美好的体验。咖啡是一种特别有魅力的饮料，我们也希望通过咖啡激发消费者对美好生活的热切期望。关于瑞幸的愿景。在我看来，世界级的咖啡品牌其内涵是品牌价值、用户数量、销售杯量、门店数量、财务数据等各个方面都应该是世界级的。根据公开领域能看到的数据，目前瑞幸的门店数量已经成为中国第一，但是从其他几个维度看，还有很大的进步空间，我们会继续努力。
For the past two years, our board of directors and the management team have worked hard to think about the reshape of our culture. Our mission, to create Luckin moment and inspire. This original intention of our business and the source of our name.
We hope our products can bring luck and enrich positive life experience to our customers. Coffee is an increasingly consumed experiential beverage in China, and we aim to inspire our customers to achieve a better life through coffee. Our vision, in our opinion, being a world-class coffee brand means achieving world-class level in all aspects of the business, including brand reputation, number of customers, cups of coffee sold, store counts, and financials. Based on publicly available information, we are already the largest coffee chain in China in terms of store counts, but there is still room for growth in other indicators, and we will continue to strive for it.
关于瑞幸的价值观，这是我们团队的DNA。我们通过反思历史，检视自己的业务模式，倾听员工和消费者的声音，总结提炼了这五项价值观。求真务实是瑞幸价值判断和价值选择的首要标准。品质至上是瑞幸始终如一的追求。持续创新是瑞幸长久发展的不竭动力。非我莫属是瑞幸伙伴愿意进取的拼搏精神。互信共赢是瑞幸内外对所有员工、企业、合作伙伴休戚与共，携手创造更大社会价值的有力保障。
Our values. At Luckin Coffee, our core values are part of our D&A. We have established five core values, which reflect our history, our business model, and the thoughts of our employees and customer alike. Integrity is the most fundamental and important criteria guiding our judgment and choice. Craftsmanship, which is a consistent pursuit of Luckin Coffee. Innovation is a major driving force for our long term growth. Ownership represents the dedication of Luckin Coffee's employees. Cooperation is the powerful bond among our Luckin Coffee stakeholders, both internal and external, who work together and create value to our society.
瑞幸变革的重点是清晰和彻底地重构了公司发展的总体战略和业务逻辑。我们更加明确地聚焦和专注于咖啡赛道。我们认为中国的咖啡市场是有极高潜力的增量市场。业务层面，我们坚定地以技术为核心驱动力，打造人、货、场三驱动的新消费新零售业务形态，持续为客户提供高品质、高性价比、高便利性的产品与服务。
The focus of our transformation is to clearly and thoughtfully rethink our overall strategy and business. We believe China's coffee industry is the largest market with strong growth potential, and therefore we want to focus on our core business, namely our coffee business. From an operation standpoint, we believe that technology will continue to be the driving force in building a new consumption and new retail business model, supported by the three pillars of people, products, and place, to continuously provide products and services with high quality, high affordability, and high convenience.
在品牌营销和增长方面，瑞幸坚持专业、年轻、时尚、健康的品牌调性。专业代表着瑞幸对产品品质的极度追求。年轻时尚是瑞幸和传统品牌的重要调性区别。我们坚持创新，从产品到代言人都深受年轻人的喜欢。2021年，在时代传媒集团消费者报告的评选中，荣获年度最受年轻消费者欢迎品牌。健康是瑞幸持续倡导的生活理念。咖啡本身就是全球消费者认可的健康饮品，有很多健康益处。而近期瑞幸上新的零卡糖系列的冰咖，以低卡低脂也更受消费者的喜爱。
In terms of brand marketing and sales growth, we have built our brand based on professionalism, youth, fashion and wellness. Professionalism represents our fundamental pursuit of high product quality. Youth and fashion is an important distinction between us and other traditional brands. We adhere to innovation, and our products and brand ambassadors are well liked, in particular by the younger generation in China. This is illustrated by our recognition as the 2021 Young Consumer's Favorite Brand by China Consumer Reports. Wellness. We continue to advocate for a healthy lifestyle. Coffee is a well-recognized drink around the world with many health benefits. Recently, we launched a new zero calorie sugar series of iced coffee, which is very popular because of its low calorie and low fat features.
截至2022年一季度，瑞幸月均交易客户数近1,600万，公号粉丝目前已超过2,900万。通过建立多个自有用户流量池，以数据和技术驱动，多渠道触达客户，不断拉新、留存、提频，实现了卓有成效的精细化用户运营，推动了业绩增长。从品牌认知度到美誉度方面，瑞幸已经成为当之无愧的中国市场咖啡头部品牌。2021年，在第一财经杂志持续十三年的金字招牌品牌偏好度调查中，瑞幸的偏好度首次在连锁咖啡类目中排名第一。
We have average monthly transaction customer of nearly 60 million during the first quarter of 2022, with over 29 million subscriber to our official WeChat account. By establishing multiple sales on user traffic sources, driven by data and technology, we have managed to reach users through multiple marketing channels and continuously attract and retain new users. In turn, this enable us to realize effective and targeted customer engagement, further driving our performance. This effort has enhanced our brand recognition and reputation, thus putting Luckin Coffee into a leading coffee brand in China. In fact, in 2021, Luckin Coffee was ranked number one in the coffee chain industry for the first time in the Top Brands report, a research report conducted by Yicai, which has evaluated brand preference in China for the last 13 years.
从产品侧来看，我们坚持两手抓，一手抓专业，一手抓好喝。对于咖啡专业性的极致追求，离不开我们在咖啡专业供应链上的持续投入。原材料采购方面，瑞幸已经成为中国最大的生豆进口商之一，2021年共进口咖啡豆15,808吨。通过与世界顶级的咖啡豆贸易商合作，采购全球优质产区的高品质咖啡豆。22年一季度，瑞幸从埃塞俄比亚采购超过3,000吨高品质咖啡生豆，已成为埃塞花魁在中国的超大买家。2021年4月，我们的第一家咖啡烘焙工厂在福建正式投产，设计产能1.5万吨。我们的第二个咖啡烘焙工厂也已经在选址进行中。布局上游咖啡豆产业链，不仅长期有利于原材料的品质稳定，更提升了对原材料采购成本的把控能力，起到降本增效的作用。持续深耕咖啡供应链将是我们最深的护城河和最高的竞争壁垒。
In terms of our product strategy, our focus on professionalism and good flavor is critical to our development and success. The pursuit of professionalism in the coffee industry goes hand in hand with our continued investment in the professional coffee supply chain. In terms of procuring raw material, we have become one of the largest importers of green coffee beans in China, importing a total of 15,808 tons of coffee beans in 2021. We source premium green coffee beans from renowned plantations around the world through the world's top coffee bean suppliers. In the first quarter of 2022, we sourced more than 3,000 tons of high-quality green coffee beans from Ethiopia, becoming the largest buyer of Ethiopia's Hambela beans in China. In April 2021, we opened our first coffee roasting facility in Fujian Province, designed with a capacity of 13,000 tons.
In addition, we are currently finalizing site selections for our second roasting facility. Upstream expansion in the coffee bean supply chain allows us to visualize the quality of raw materials in the long run and optimize control over procurement costs of raw materials. This reduced cost while boosting efficiency. We believe continuous investment in our supply chain will help create one of our strongest competitive advantage over the long term.
对于好喝的追求来自于产品团队优秀高效的数字化研发机制与策略。我们的研发部门的最重要工作不只是为了做出某一个爆款产品，而是要建立一套完善的数字化研发体系。目前已经形成了从前端业务数据到后台研发创新相互支撑的良性循环。从厚乳拿铁到生椰拿铁，再到椰云拿铁，瑞幸已经成为引领中国饮品创新的潮流力量。通过产品口味形态的迭代创新，不断吸引年轻消费者。
The pursuit of good flavor is achieved by our excellent product development team, which employs efficient digitalization in R&D mechanism and strategy. The most important work of our product development team is not simply to develop popular products, but also to establish a comprehensive digitalized R&D framework. Therefore, we have achieved a virtuous circle of combining front-end operational data and back-end product development. Our innovative beverages such as Mirror Latte, Coconut Milk Latte, and Coconut Cloud Latte have enabled us to become a leading force in beverages innovation in China. By offering innovative products with unique flavor and form, we are able to continuously attract young customers.
就门店侧来看，根据公开领域能看到的数据，瑞幸已经成为了中国门店数第一的连锁咖啡品牌。截止22年一季度，我们共计拥有门店六千五百八十家，其中直营门店已经进入全国五十多个城市，联营门店已布局全国二十七个省级行政区，超过两百二十个城市。未来我们会持续坚持直营加联营并进的门店策略。一方面通过直营门店在一二三线城市不断加密布局，另一方面通过联营合伙人模式加速下沉到更广阔的低线市场。中国的咖啡市场具有极为广阔的空间。我们对未来的门店拓展充满了信心。
In terms of our retail store strategy, we have become the largest coffee network in China in terms of the number of stores at the end of 2021. Based on publicly available information. As of March 31st, 2022, we had 6,518 stores in total. Among them, our self-operated store network had a presence in over 50 cities across China, and our partnership store network spanned over 220 cities in 27 provinces. Going forward, we will continue to maintain our store expansion strategy through a well-balanced mix of self-operated stores and partnership stores. They will be effective to continue to expand in Tier one, Tier two, and Tier three cities through our self-operated store model. We also intend to quickly penetrate into lower tier cities through the retail partnership model. This will further solidify our market penetration.
We believe there is a great potential in China's coffee market, and we are confident in our future store expansion.
技术优势是瑞幸区别于一般传统餐饮企业的最重要优势之一。通过技术数据驱动人货场变革，实现科技全赋能。瑞幸的科技能力涵盖了全业务链条，覆盖了从数据支撑门店选址、算法驱动供应链采购到用户营销自动化，以及门店设备IoT管理等各业务环节。正是这样的数字基因，让我们能够快速响应消费者需求，提升供应链和门店效率，用科技驱动研发，用技术加强品质管控。未来，我们还将持续加大对于数据算法、IoT等方面的智能化建设投入，包括人才引进、自动化营销、智慧门店和智慧供应链体系建设等等。
Our technological advantage is what sets us apart from other traditional F&B companies. We leverage our capability in technology and data analytics to drive the evolution of our people products place strategy to achieve full technology coverage in every aspect of our business, including data-supported site selection, algorithm-driven supply chain procurement, automated user engagement, and IoT-based store equipment management. Such digital features allow us to quickly respond to customer demands, improve supply chains and store operation efficiency, drive research and development, and enhance quality control. We will continue to increase our investment in data algorithms, IoT and other technologies initiatives, including investing in new talents, technology-driven sales and marketing, smart store and smart supply chain management systems.
从三月开始，各地不断爆发的疫情给公司经营带来了很多困难和不确定性。但一季度我们依然逆势实现了收入强劲增长，并首次实现公司营业利润转正。这得益于我们的多项优势。一是门店布局科学，通过直营和联营不同的管理模式，灵活应对不同城市的不同特点。此外，瑞幸的门店类型和场景结构对疫情也具有天然的抗风险性。分场景看，截至Q1的经营门店结构中，近48%是写字楼门店，12%是大学高校门店。这些封闭的场景，除了封城等最严重的情况外，基本可以保持正常营业。
Since March of 2022, the outbreaks of COVID-19 in various cities has brought difficulties and uncertainties to our operations. Despite these challenges, we continue to achieve strong revenue growth this quarter and achieved for the first time quarterly reported operating profit since our inception. Much of this strong performance was fueled by our competitive advantage, including, first, the strategic roll-out of our store network. Through our multi-store approach, self-operated store and partnership store, we can flexibly respond to evolving customer needs in different cities. In addition, our store model and location strategy can help us mitigate the challenges posed by the COVID-19 pandemic. For example, as of March 31st, 2022, among our self-operated store base, 48% were located in office buildings and 12% in college. Generally speaking, we were able to remain normal operations in these relatively closed off locations, except during strict city lockdowns.
二是成本结构合理。以自提店为主的小型门店结构和高度智能化门店管理系统，使得我们能够采取更为节约高效的房租和人力成本结构。三是品牌势能助推。瑞幸已经成为越来越多年轻人的首选咖啡品牌。2021年，声波拿铁在社交媒体平台话题量过亿。2022年一季度，瑞幸咖啡携手冬奥冠军谷爱凌，获得了极大的市场成功。
Second, on a reasonable cost structure. As we mainly operate through a small scale pickup store combined with our advanced and intelligent store management system, we are able to achieve a more efficient store rental and labor structure. Third, our strong brand influence. Luckin Coffee has become the coffee brand of choice for more and more young people. In 2021, our Coconut Milk Latte achieved over 100 million hot-topic mentions on social media. In the first quarter of 2022, we recruited Olympic champion Eileen Gu to be our brand spokesperson, resulting in a successful marketing campaign for Luckin Coffee.
四是持续的产品创新能力。一季度我们上市了三十四只新饮品，包括花魁5.0、瓦尔登滑雪拿铁、诺加樱花拿铁等都成为了当季爆款。即使在疫情严重的四月，我们上新的椰云拿铁，第一周销量就超过了四百九十五万杯。五是应急预案完善。在疫情物流受阻的情况下，供应链部门充分利用现在的多地布局，分城分仓的网格式供应体系，紧急设立应急仓库和中转站，尽全力做好供应保障。
Fourth, our robust product development capabilities. During the first quarter, we launched 34 new beverage products, including Hambella specialty, Walden Ski Latte, and the Vanilla Waffle flavored Velvet Latte, which all become bestsellers. Despite the challenge posed by the COVID-19 in April, our new Coconut Cloud Latte sold over 4.95 million cups in the first week after its launch. Lastly, our well-prepared pandemic emergency plan. Facing logistical constraints during the pandemic, our supply chain department made full use of our existing grid-based warehouse network in multiple locations, quickly setting up emergency warehouse, transfer station, and other measures to ensure sufficient supply.
再次，我要感谢疫情下坚守岗位的近两万七千名幸运伙伴，也感谢广大客户的厚爱和支持。下面请Reinout和Sam分别向大家详细介绍财务数据和内控合规情况。谢谢。
I'd like to express my most sincere gratitude to our nearly 27,000 Luckin employees who have stuck with us during this challenging time, as well as to our customers for their ongoing love and support for Luckin Coffee. At this time, I'd like to turn the call over to Reinout and Sam to discuss details related to the restructuring of our financial indebtedness and updates on our remediation and internal cultural and compliance efforts and our financial performance during this quarter.
Thank you very much, Jingyi, and good morning or good evening to those who are joining us today. I would first like to give everyone an update on the restructuring of our financial indebtedness. As previously announced, and as detailed on slide 12, we have successfully completed the restructuring of our financial indebtedness and emerged from all bankruptcy proceedings in all jurisdictions. There are a few milestones that I would like to highlight. With the overwhelming support of our creditors, we successfully restructured the $460 million convertible notes issued in January 2020 with a close to par recovery for the note holders. We entered into a negotiated resolution with the United States Securities and Exchange Commission. We entered into an agreement to settle the U.S. securities class action lawsuit.
This was preliminarily approved by the U.S. courts, and is expected to get final court approval in Q3 2022. We also obtained sufficient U.S. dollar capital to fund the restructuring through a combination of a $250 million investment by two of our existing shareholders, and by remitting $250 million of our onshore excess cash. Furthermore, in January 2022, a consortium led by Centurium, and including IDG and Ares, acquired a significant amount of Luckin's shares from the affiliates of Charles Lu and Zhiya Qian , both former management of Luckin Coffee. For details of any pending matters, I would refer you to our 20-F 2021, filed on April 14, 2022, and in particular Item 8.A. We are thankful to all of our stakeholders throughout this process.
They were instrumental in helping us to achieve a positive outcome and ultimately emerge as a stronger company. Moving forward, our team is highly energized and laser-focused on our future prospects and delivering long-term sustainable shareholder value. I'd now like to turn it over to Sam Jiang, who leads our internal control and compliance efforts and has played and continues to play a critical role in our remediation efforts and ongoing progression.
Thank you, Jingyi and Reinout. Welcome, everyone, and thanks for listening in. First, let me introduce myself as I'm the newest member of Luckin Coffee senior management team. My name is Shan Jiang, and I go by Sam. I joined Luckin Coffee in September 2020. I went to Columbia Law School and started my legal career with Davis Polk & Wardwell in the firm's Silicon Valley office. After Davis Polk, I had worked in the legal departments at Amazon and at Airbnb. Before joining Luckin Coffee in September 2020, I was an associate general counsel of Airbnb. When I joined Luckin, one of my primary missions was to rebuild the company's legal and compliance function and enhance its internal controls. Luckin's rebuilding efforts started with a thorough and independent investigation of the fabricated transactions.
From day one, the objectives were very clear: to identify the wrongdoing and to remove those responsible. In March 2020, our board formed a special committee of independent directors, which was assisted by independent legal and forensic advisors to conduct a thorough investigation. The company acted swiftly based on the findings of the special committee. As of July 31, 2020, the company has terminated all the wrongdoers identified by the special committee and on the do not rehire list. In total, 40 employees were terminated, including the company's former CEO and COO. The board also required the former chairman of the board to resign, who was later removed from the board pursuant to the results of a shareholder meeting. In addition, the company subjected 15 personnel to disciplinary action for missing red flags or failing to identify misconduct.
The fact that the fabricated transactions occurred and continued for months before being detected made it clear to management and the board that we needed to enhance our corporate governance and internal controls. Therefore, we have made significant investments and important changes in these areas. We engaged external firms on internal controls, and we have implemented enhancement measures recommended by those firms to address the root cause of the historical problems. First of all, in terms of governance structure, we restructured the company's management team and changed reporting structure to provide our CFO, Reinout Schakel, full control over the finance department, which was previously managed in part by the former CEO. In order to ensure the highest attention is devoted to maintaining accurate financials, Reinout Schakel has a dotted reporting line to the audit committee.
Under Reinout Schakel's leadership, we restructured and reorganized our finance function and recruited new talent familiar with U.S. GAAP for key finance positions. We also now have an internal audit function, with auditing and IT experts reporting directly to the audit committee. We have rebuilt our legal and compliance function by recruiting new talent to manage our legal, internal control, and internal investigation teams within the function. Moreover, we have taken steps to significantly enhance internal control measures, covering important areas such as payments, accounting, IT, financial disclosure, and others. Just to give some examples, we strengthened controls on payments by requiring all payments to go through centralized office automation system and proper internal approvals. We tightened up controls on contract cycle and investment activities by implementing a contract approval matrix on the OA system and setting up a procurement review board of senior management.
We improved IT related controls by recording all changes in the system, conducting periodic log reviews, tightening IT system access control, and requiring independent IT review by the internal audit team. We developed and strengthened a number of compliance policies and programs, such as a whistle-blower program, anti-fraud program, conflict of interest and related party transaction policies, gift and entertainment policy, and insider trading policy. As a result of these efforts, and as stated in our 2021 financial filing, we did not identify any material weaknesses as of December 31, 2021. Our auditors concluded that the company's internal control over financial reporting was effective as of the end of 2021. For details on our internal control enhancements, please refer to our 20-F disclosure under item 15 for the financial years 2019, 2020, and 2021.
We believe our significant investment in corporate governance and internal control has played a critical role in our turnaround story. Luckin Coffee's leadership team are committed to continuously investing in these important areas to support our future growth. Now back to Reinout to discuss our Q1 financial results. Thank you.
Thank you, Sam. I will now turn to our Q1 2022 performance. Before I discuss our financial results, I would like to provide some context on the recent COVID-19 situation in China and the impact on our business. Since the end of 2021, cases of the Omicron variant have emerged in China, spreading to several major cities including Beijing, Shanghai, Shenzhen. In terms of what it means for our business, temporary store closures as a result of COVID-19 gradually increased during the first quarter. March was the most impacted month during the first quarter. We had an average of around 700 daily temporary store closures.
Starting early April 2022, as Shanghai entered into a citywide lockdown, this number further increased, and for the period between April 1, 2022 and the day prior to this earnings announcement, the daily average number of temporary store closures was around 950. There has also been increasing pressure on our supply chain, in particular in areas surrounding the affected cities. Because we've been operating in an environment affected by COVID-19 since early 2020, we have been able to act swiftly and definitively to address the dynamic environment. For example, we strictly implemented a set of measures for our stores in the government-identified high risk or medium risk areas. These measures included monitoring and safeguarding our personnel's health conditions on an ongoing basis and implementing social distancing rules for our in-store and delivery services process.
We simplified our menu to streamline our operations and added a new menu for bulk purchases. We set up temporary warehouses in several cities, including Beijing and Shanghai, and activated our specifically designed epidemic warehouse and logistics plan to ensure stabilization of our operations. Finally, we also delivered thousands of food packages to our staff in lockdown areas, including in Shanghai and Beijing. With practical measures, the impact on our financial results in the first quarter was nonetheless substantial and continues to impact our business into the second quarter. We are encouraged by the recent government initiatives to introduce measures to support the local economy and have seen a partial reopening of Shanghai and will continue to keep a close eye as that progresses. That said, the lack of visibility through this uncertain and unclear operating environment means we will not be providing any forward-looking guidance on this call.
Despite the challenges to our business from this recent outbreak, our sound strategy and solid execution have ensured we delivered strong results during the first quarter, as detailed on slide 15. I'll now discuss some specific highlights from the quarter. We are pleased to deliver our first quarterly reported operating profit since our inception. This is a milestone we are very proud of and one that is illustrative of the early success of our revised strategy under the current management team and our relentless focus on execution. Now let's look at our revenue growth. We achieved total net revenues of CNY 2.4 billion during the first quarter, an increase of almost 90% compared to the same period last year. This is due to very strong demand for our products.
We sold on average 2 million products per day across all of our sales channels, which is an increase of 86% compared to last year. We also introduced over 34 newly freshened group products during the quarter, which contributed materially to incremental sales. This success continued in April when our new Coconut Cloud Latte sold over 4.95 million cups in the first week after its launch. During the quarter, we also achieved an increase in net average selling prices compared to last year. In terms of new unit growth, we opened 556 net new stores, a significant acceleration from the most recent quarters, and I will elaborate on this a bit more during this presentation. For our self-operated stores, we delivered same-store sales growth of over 40% and a store-level operating profit margin of just over 20%.
This compares to a 6.2% store margin for the same period last year and a loss-making position in the year prior to that. I should also note that historically, the first quarter is seasonally our weakest quarter for our self-operated stores as a result of fewer purchase orders during Chinese New Year holidays. For our partnership stores, revenue grew by approximately 240% and now represents around 23% of our total revenues, compared to just under 30% last year. I will elaborate on our partnership business model and strategy momentarily. Overall, we are very pleased with our results and believe these illustrate the strong momentum of our brand, the huge demand for our products throughout China, and clear benefits of our scale and our technology-enabled operating model. Let's look at our unit growth and break it down a bit further.
As I mentioned, and as can be seen on slide 16, we opened 556 net new stores during the quarter, which is materially higher than the last few quarters and reflects the strong demand for our products nationwide. This unit growth in the first quarter is partly in anticipation of the Beijing Olympics in February 2022 and the promotional activity surrounding the Olympics to ensure we could capitalize on that momentum. In terms of store mix, we opened 278 net new stores for both self-operated and our partnership stores, respectively. This mirrors our strategy to gain market share by increasing our store footprint nationwide through an optimized mix of self-operated and partnership stores. I should mention that as part of the strategic review in 2020, we implemented revised store opening criteria to focus on the quality of new store openings.
This is a very important point because we care deeply about the quality of our growth. To illustrate this point, for all the new self-operated stores opened during 2021 that are in operation as of the 30th of April, 2022, almost 90% of these stores were profitable on a store level in the third full month after opening. Moving on to discuss our partnership model on slide 17. As I mentioned earlier, revenue of our partnership stores, which is predominantly for profit sharing and from sale of materials and equipment to our partners, is now just under a quarter of our total revenues in the first quarter and has been rapidly expanding. This forum provides a good opportunity for me to update everyone on our partnership store logic and strategy.
First, in terms of our business model and key responsibilities, Luckin Coffee is responsible for all technology, data gathering and analytics, product selection and innovation, supply chain and marketing. Our partner will be responsible for funding and securing the location, renovations, equipment purchases, staff hires, and managing daily operations. Our partnership model is different compared to a traditional franchise model. For example, we obtain customer payment and data and require our partners to use our supply chain. We therefore have significant control over our partners' operations. From a quality assurance perspective, we treat our partnership stores in essentially the same way as our self-operated stores and are determined to maintain the high level and consistent service quality across all of our stores.
The key advantages for our partners include the following. Very strong demand for products given Luckin's premier brand recognition, innovative product portfolio, and proven value proposition. Favorable partnership terms. For example, no initial upfront partnership fee other than a refundable deposit. No profit sharing if the partner is loss-making at the gross profit level. However, the partner will generally have to fund operating losses. We charge a profit sharing fee based on a tiered profit sharing mechanism only once the operations are profitable. Lastly, an attractive payback period for our partners. The key advantages to Luckin Coffee include the rapid expansion of our footprint and nationwide presence, limited upfront capital requirements, complementary effect to our self-operated store model, with partnership stores targeting predominantly lower-tier cities. Further diversification. Partnership stores typically perform better during the weekends and holidays, which is the opposite for self-operated stores.
Lastly, attractive economics with favorable returns on invested capital. We will strive to continue to expand our partnership stores, and as of the date of this earnings report, we have a strong pipeline of potential partners. There are a few important points to make on our improving profitability profile, as illustrated on slide 18. First, I want to highlight our store level profit margin for self-operated stores. This is one of our most important KPIs and a key area of focus. This metric includes all direct expenses that can be allocated for our self-operated stores, but excludes all overhead expenses. A clear definition is provided in the 6-K we filed earlier today. We achieved a store margin of just over 20% as a result of a material increase in average revenue per store, our efficient store operations and benefits of scale.
This is a significant improvement over last year and already exceeds the full-year store-level profit margin for 2021. Now, in terms of our overhead expenses, let's first look at sales and marketing and our general and administrative expenses. As mentioned by both Jingyi and Sam earlier, we have made significant investments in our organization, talent acquisition and brand recognition. As a result, our overhead expenses have been increasing as our business expanded. However, as a result of our increasing scale and operating leverage, all key cost components have been decreasing as a percentage of revenue sequentially. Our current organization is built to support our future growth, and we currently expect these expenses to further decrease as a percentage of revenues over the coming years if we can continue to deliver growth.
Furthermore, there's been a material reduction of losses and expenses related to the restructuring since the provisional liquidation of the company in the Cayman Islands was completed in March 2022. This further contributed to our improved profitability profile. Lastly, let me address our balance sheet and liquidity position on slide 19. Let me start with our cash flow. During the quarter, we achieved positive operating cash flow of around CNY 108 million, which was more than sufficient to cover all of our capital expenditures during the quarter, which were around CNY 70 million. In terms of our balance sheet, let me highlight the following. We had over CNY 5 billion of cash and cash equivalents at the end of the quarter, which was predominantly held in local bank accounts to support our onshore operations.
The decrease in cash and cash equivalents during the quarter was primarily due to the repayment of senior convertible notes as part of the restructuring of our indebtedness and purchase of property and equipment, offset by the proceeds from issuance of senior preferred shares and operational cash generation. In terms of our liability, our only outstanding interest-bearing debt is the $109.9 million five-year note that we issued to the holders of the convertible bonds on the 28th of January 2022. For the U.S. securities class action, we have a funding requirement of $175 million prior to June 30, 2022, and we have the required capital available to fulfill this obligation. Currently, we have a strong liquidity position and a healthy balance sheet.
We believe we are relatively well positioned to deal with any uncertainty, including from further COVID-19 outbreaks, and will continue to invest in our core competencies. A good example is our contemplated investment to construct a second roasting facility in China, which Jingyi mentioned earlier. This will support the rapidly increasing demand for our coffee-related products and ensure the highest quality at the best possible price. Finally, we will review our liquidity requirements on an ongoing basis to ensure that we can meet all of our business needs and continue to further optimize our capital structure. Thank you. I'll now turn it over to Jingyi for concluding remarks.
To conclude, I would like to once again thank our shareholders for their unwavering support over the last few years, which have enabled us to achieve this turnaround. We believe the best is yet to come. We are striving to be the most effective and passionate team as we seek to create a more efficient and advanced business model in China's consumer market. We remain committed to building Luckin Coffee into a long-standing world-class coffee brand and achieve sustainable, healthy, and long-term growth. We remain dedicated to the capital market and strive to drive returns and deliver long-term value for our shareholders and to the society. Thank you for your time and interest in Luckin Coffee. Thank you.
This concludes our conference call for today. You may now disconnect.