Black Rock Coffee Bar Touts 20% Growth Goals, 1,000-Store Ambition at Conference

Key Points

• Black Rock Coffee Bar told investors it is targeting 20% annual growth in units, revenue and profitability, with a longer-term goal of reaching 1,000 stores by 2035. Management also highlighted attractive unit economics, including average unit volumes of about $1.3 million and first-year returns modeled at 30% to 40%.
• The company said its differentiation comes from its baristas and store experience, with guest satisfaction scores of 93% to 96% and lower employee turnover than the broader industry. Executives argued that Black Rock can coexist with major rivals like Starbucks, Dutch Bros and 7 Brew because it serves a distinct customer base and offers sit-down lobbies alongside drive-thru service.
• Same-store sales growth has moderated, with first-quarter comps up 5.2% versus 9% a year earlier, which management partly tied to loyalty program changes and tougher comparisons. Executives said future sales drivers could include more marketing, expanded food offerings, and selectively longer store hours, while Phoenix store clustering has created some sales transfer but is still viewed as a growth opportunity.

Black Rock Coffee Bar NASDAQ: BRCB executives outlined the company’s growth strategy, unit economics and near-term sales trends during a Baird investor session, emphasizing the brand’s store experience, barista engagement and expanding development pipeline.

Chief Executive Officer Mark Davis said the company operates in seven states, broadly spanning “everything Dallas, Colorado west,” and has an average unit volume of about $1.3 million. He described Black Rock’s model as combining drive-thru access, third-party delivery, order-ahead capabilities and in-store lobbies designed with what he called a “newer, cooler, hipper” feel.

Davis said the company’s biggest point of differentiation is its baristas, citing guest satisfaction scores between 93% and 96%. He also said employee turnover runs around 50%, compared with what he characterized as an industry range of 130% to 150%.

“When you got that great barista and you have that great engagement, what it’s done is put up incredibly strong same-store sales, same-store transactions,” Davis said.

Management Targets 20% Growth Across Key Metrics

Chief Financial Officer Rodd Booth said Black Rock’s long-term model calls for 20% annual unit growth, 20% annual revenue growth and 20% or greater annual profitability growth. He said store-level margins are running “north of 29%,” supported by what management views as strong store-level execution.

Booth said new units are modeled to enter the comparable sales base at roughly $1.1 million in sales, with store-level margins in the low 20% range. He cited average net investment costs of about $650,000 per store after landlord contributions, with targeted first-year returns of 30% to 40%.

The company has set an intermediate goal of reaching 1,000 locations by 2035. Davis said that target was derived by compounding the current store base at a 20% annual growth rate over the next decade. He said the company still sees room to expand within existing markets, noting that Colorado has 18 stores averaging about $1.4 million to $1.5 million in sales and could “easily” support 50 locations. He also said Black Rock expects to have at least 20 California stores by the end of 2027.

Executives Address Competition and Customer Positioning

Davis said Black Rock’s customer base skews from ages 18 to 45 and is “a little more coffee-based” than some competitors. Coffee represents about 55% of the company’s mix, while energy drinks have risen from 19% two years ago to 25%, and food accounts for about 13%.

He said Black Rock can coexist with brands such as Starbucks, Dutch Bros, 7 Brew and McDonald’s, pointing to the Pacific Northwest as a highly penetrated coffee and beverage market where multiple chains perform well. Davis said Black Rock locations often operate near competitors and still draw a distinct customer.

“There is a significant group that wants to come in” and sit down, Davis said, adding that the company’s lobby format differentiates it from drive-thru-only beverage concepts.

Same-Store Sales Moderation Tied to Loyalty Program Comparisons

Booth said first-quarter comparable sales rose 5.2%, following 9% growth in the prior-year period. He said management was pleased with the result, particularly on a two-year basis, and described mid-single-digit comparable sales growth as a strong target range.

Booth attributed part of the comparison to the company’s loyalty program, which launched in June 2024 and initially drove accelerated transaction growth through new offers and promotions. He said Black Rock later adjusted the program so points would expire, encouraging customers to return more frequently rather than accumulate unused rewards.

Davis said first-quarter transactions were down 0.6%, compared with transaction growth of about 10% to 10.5% a year earlier. On a two-year basis, he said transactions were up about 9.5%, which he characterized as strong relative to broader industry trends. He added that second-quarter trends were “relatively in the same spot” as the first quarter.

Phoenix Store Density Creates Some Sales Transfer

Executives also discussed cannibalization, or what they called sales transfer, in the Phoenix market. Davis said the company opened new stores within roughly three miles of some high-volume Phoenix locations, leading to sales transfer from existing stores. He said management viewed the tradeoff favorably if two nearby stores collectively generate substantially more revenue than one store alone.

Booth said the issue was concentrated in Phoenix, the company’s most dense market, and that Black Rock still sees significant opportunity there. He said the company expects some impact in the second and third quarters, but noted that two affected stores will lap the comparison in September. Davis said five more Phoenix stores planned this year and six planned for next year are not expected to create sales transfer.

Food, Marketing and Later Hours Seen as Comp Drivers

Davis identified several potential drivers of future same-store sales growth, including increased paid media, more personalized loyalty offers, higher food attachment and possible extensions of store hours. He said the marketing budget has doubled from about 1% of sales to 2%, with programmatic digital marketing aimed at customers who have not previously visited stores.

Management said food remains an opportunity after the successful launch of egg bites last year. Booth said the company believes egg bites still have room to grow, while a grilled cheese test in the Pacific Northwest and Arizona could help support both the comparison against last year’s launch and the afternoon daypart.

Davis said Black Rock generally closes around 7 p.m., while some competitors remain open later. He said extended hours could be considered on a location-by-location basis, depending on market density and demand.

On technology, Davis said artificial intelligence is being used primarily in back-of-house applications such as sales forecasting, scheduling and inventory. He said the company intends to preserve the front-of-house emphasis on human connection between baristas and customers.

About Black Rock Coffee Bar NASDAQ: BRCB

Our Mission: To Fuel People Forward - One Connection, One Moment, One Cup at a Time We are a high-growth operator of guest-centric, drive-thru coffee bars offering premium caffeinated beverages and an elevated in-store experience crafted by our engaging baristas. Black Rock Coffee Bar was founded in 2008 in Beaverton, Oregon, by our co-founders Daniel Brand and Jeff Hernandez. What started as a single 160 square foot coffee bar in 2008 is now one of the fastest growing beverage companies in the United States by revenue and the largest fully company-owned coffee retailer in the country, with 158 locations spanning seven states as of June 30, 2025, from the Pacific Northwest to Texas.

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