Dutch Bros Q1 Earnings Call Highlights

Key Points

• Dutch Bros beat first-quarter expectations and raised its full-year outlook. Revenue rose 31% to $464 million, adjusted EBITDA climbed 26% to $79 million, and management now expects 2026 revenue of $2.05 billion to $2.08 billion.
• Transaction growth remained strong, with the company logging its seventh consecutive quarter of growth. Same-shop sales rose 8.3% systemwide, helped by beverage innovation, food expansion and a strong limited-time offering lineup.
• The company is accelerating expansion, now planning to open at least 185 system shops in 2026 and reiterating a long-term target of 2,029 shops by 2029. Dutch Bros also said its food rollout and Clutch Coffee Bar conversions are outperforming early expectations.

Dutch Bros NYSE: BROS reported stronger-than-expected first-quarter results and raised its full-year outlook, with management citing sustained transaction growth, food rollout momentum, beverage innovation and an accelerated development pipeline.

On the company’s May 6 earnings call, Christine Barone, Dutch Bros’ CEO and president, said first-quarter results “meaningfully exceeded expectations,” driven by the company’s Broistas, its all-day beverage platform, limited-time offerings and food expansion. Total revenue rose 31% year over year to $464 million, while adjusted EBITDA increased 26% to $79 million.

Josh Guenser, Dutch Bros’ CFO, said system same-shop sales rose 8.3% in the quarter, driven by 5.1% transaction growth. Company-operated same-shop sales increased 10.6%, with transaction growth of 6.9%. Barone said the company has now delivered seven consecutive quarters of transaction growth.

Dutch Bros Raises 2026 Outlook

Based on first-quarter performance and trends seen so far in the second quarter, Dutch Bros raised several parts of its 2026 guidance. Guenser said the company now expects full-year revenue of $2.05 billion to $2.08 billion, representing 25% to 27% growth year over year. Adjusted EBITDA is now expected to be between $370 million and $380 million.

The company also raised its full-year system same-shop sales growth outlook to a range of 4% to 6%. Guenser said the updated forecast assumes second-quarter system same-shop sales growth approaching 5%, while noting that transaction comparisons become more difficult later in the year.

Dutch Bros now expects to open at least 185 system shops in 2026, up from its prior plan. The company opened 41 new shops in the first quarter, including seven converted Clutch Coffee Bar locations in North and South Carolina.

Management reiterated its long-term target of reaching 2,029 shops in 2029. Barone said the company’s real estate pipeline has strengthened and that Dutch Bros has “no shortage of potential sites for new builds,” along with conversion opportunities from limited-service operators, smaller growth concepts and legacy beverage brands.

Food Rollout and Beverage Innovation Support Traffic

Barone said Dutch Bros’ new food program continued to perform “exceptionally well.” As of the first quarter, the company had rolled out the program to 485 system shops, including 11 franchise shops. Food attachment rates were tracking in the low teens, slightly ahead of early test expectations, and management now expects the rollout to be largely complete across the company-operated fleet by the end of the third quarter.

In response to an analyst question, Guenser said shops with food are still tracking toward an expected roughly 4% same-shop sales lift on a system-wide basis. He noted that approximately 300 shops in the system will not be able to accommodate the new food program.

Barone said the company added a ninth food item, a cake pop, during the quarter, describing food as a platform but emphasizing that Dutch Bros intends to keep the menu limited and operationally simple.

Beverage innovation was also a major contributor to first-quarter performance. Barone said Dutch Bros’ March limited-time beverage lineup, which included a Brown Butter Chocolate Chip Latte, Fruit Punch Rebel with a Sour Candy Straw and Kool Blue Fizz, was one of the company’s strongest LTO windows on record. She said LTO unit velocity increased approximately 30% versus the prior year.

The company also launched Myst Energy Refreshers in early May, a plant-powered energy platform with antioxidants, electrolytes and fewer than 100 calories. Barone said Myst is intended to complement the company’s Rebel energy drink and address different customer occasions. She said early customer feedback has been strong.

Texas and Clutch Conversions Highlight Market Strategy

Barone pointed to Texas as an example of Dutch Bros’ market density strategy, saying the state generated almost 20% same-shop sales growth in the first quarter. Texas is the company’s largest comparable state by shop count.

She said Dutch Bros has been focused on building brand awareness in Texas through paid media and density, and said the market includes a range of competitive dynamics. “I think Texas is a great example to see how we do within all of those different circumstances,” Barone said.

The company’s converted Clutch Coffee Bar locations also outperformed early expectations. Barone said the seven reopened shops are already outperforming system-wide average unit volumes and generating, on average, more than three times their pre-conversion volumes. Guenser said conversion costs remain in line with expectations, with average capital expenditures, including an allocation of the purchase price, of approximately $1.4 million per shop.

Guenser said system-wide average unit volumes reached a record $2.2 million in the quarter, and new shop productivity remains in line with system-wide averages.

Margins Reflect Coffee Costs and Occupancy Pressure

Company-operated shop contribution rose 26% year over year to $121 million, representing a 28.3% contribution margin. Guenser said beverage, food and packaging costs were 26.2% of company-operated shop revenue, up 120 basis points from a year earlier, primarily due to higher coffee costs and costs tied to the food rollout.

Labor costs were 26.2% of company-operated shop revenue, 120 basis points favorable year over year, which Guenser attributed primarily to sales leverage from better-than-expected same-shop sales. Occupancy and other costs were 17.8% of company-operated shop revenue, up 130 basis points year over year, primarily because of higher rent on new shops as the company shifts toward more build-to-suit leases and because of higher repairs and maintenance costs.

Guenser said the updated full-year outlook includes about 60 basis points of total cost-of-goods-sold pressure, including higher coffee costs and costs related to food. The adjusted EBITDA outlook’s midpoint implies about 30 basis points of net adjusted EBITDA margin pressure, reflecting higher coffee and occupancy costs partially offset by adjusted SG&A leverage.

As of March 31, Dutch Bros had approximately $698 million in total liquidity, including $264 million in cash and cash equivalents and the balance in an undrawn revolver. Capital expenditure guidance remained unchanged at $270 million to $290 million for the year.

Rewards, Order Ahead and Brand Awareness Continue to Grow

Dutch Rewards reached an all-time high of 74% of transactions in the first quarter. Barone said order ahead adoption climbed to approximately 15% of total transaction mix, and the company is continuing to improve segmentation and in-app offer effectiveness.

Barone said transaction growth remained strong among Gen Z and millennial customers within the rewards program. She also said unaided brand awareness has more than doubled over the past year and a half, supported by paid media, community events and social media.

Dutch Bros also completed its first quarter with consumer packaged goods products in select retail outlets. Barone said the early results were ahead of expectations, with “exceptional velocity” in units per store per week, though Guenser cautioned that CPG remains early and is not yet a significant contributor.

Closing the call, Barone highlighted the company’s community efforts, including its Dutch Luv Day of Giving in February and upcoming Drink One for Dane Day with the Muscular Dystrophy Association in support of the fight against ALS.

About Dutch Bros NYSE: BROS

Dutch Bros Coffee, trading on the NYSE under the ticker BROS, is an American drive-through coffee chain known for its quick-service model and community-focused brand. Founded in 1992 by brothers Dane and Travis Boersma in Grants Pass, Oregon, the company began as a single coffee stand and has since expanded its footprint across numerous U.S. markets. Dutch Bros specializes in handcrafted espresso drinks, drip coffee, cold brew, energy drinks, smoothies, teas, and a variety of signature “Dutch Freeze” and “Dutch Frost” blended beverages.

The company operates a mix of company-owned and franchised locations, placing a strong emphasis on speed and customer engagement.

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