RLX Technology (RLX) Bets Big On Europe And Nicotine Pouches

RLX Technology (NYSE: RLX) revealed mixed second-quarter results on August 14, with international sales accounting for about 70% of revenue. The company strengthened its European presence after acquiring a new distributor, with 30,000 retail endpoints and a digital ordering platform for 20,000 independent merchants. However, mainland China's revenue is projected to remain flat for the year as government approval procedures become more stringent.

International revenue growth and a recent acquisition contributed to a 14.8% year-over-year increase in net revenues to RMB1.01 billion. Gross margins expanded to 35.4% from 27.5% due to supply chain optimization and a better product mix. Non-GAAP income from operations rose 28.8% to RMB149.6 million, marking the 11th consecutive quarter of positive non-GAAP operating profit.

The company is investing in oral nicotine pouches and building a manufacturing hub in Southeast Asia, while facing regulatory challenges in the UK and the U.S.