BROS ABOUT TO GO-!
FAIR WARNING!
Dutch Bros: The huge expansion program
Dutch Bros operates 641 coffee shops in 14 Western U.S. states. Those locations have been posting mixed comparable-store results in the pressured economy, but with the company's differentiated culture and focus on customer service, my hunch is that those will improve with a stronger macro economy.
In the meantime, Dutch Bros is opening many new stores that are powering high sales growth. Sales increased 53% year over year in the third quarter, a huge increase by any standards, but even more so when compared with similar restaurant chains during this period.
Dutch Bros' strategy is to continue opening at a fast pace to drive sales. Considering that it sees a market for at least 4,000 new stores over the next 10 to 15 years, it has a long runway to open many stores for years.
NYSE: BROS
Dutch Bros
Today's Change
(-1.06%) -$0.32
Current Price
$29.90
BROS
Key Data Points
Market Cap
$5B
Day's Range
$29.45 - $30.50
52wk Range
$20.05 - $66.00
It plans to open 150 stores in 2023, even more than this year. And as it opens stores, Dutch Bros benefits from greater economies of scale, from which it's already benefiting. Company-operated shop contribution margin, which measures how much more each new shop adds to total sales, improved by 0.4% in the third quarter.
By 2025, Dutch Bros could be operating more than 1,000 stores. Between sales from those stores and higher
same-store sales, Dutch Bros could, and should, be a huge growth company with plenty more opportunity. As the market recovers, Dutch Bros stock is likely to take off big. And with shares trading at 2.3 times trailing-12-month sales,
now is a great time to buy.
