Dutch Bros Beats Earnings for 11th Consecutive Quarter

Key Points

• Dutch Bros reported Q3 financials on Wednesday after the close, beating on EPS and revenue.
• Shares of the coffee retail chain gained 4% in after-hours trading and have enormous upside over the next 12 months.
• Dutch Bros increased its full-year guidance following system-wide same-store sales growing by 5.7% and company-operated same-store sales growing by 7.4%.

Shares of coffee retail chain Dutch Bros NYSE: BROS climbed 4% in after-hours trading on Wednesday following the company’s blowout Q3 earnings call. 

Dutch Bros announced that it beat on earnings for the 11th consecutive quarter, with earnings per share (EPS) of 19 cents surpassing analysts’ expectations of 17 cents. Meanwhile, third-quarter revenue of $423.6 million—representing a more than 25% year-over-year increase—beat expectations of $414 million.

Icing the cake, Dutch Bros increased its full-year guidance following system-wide same-shop sales growing by 5.7% and company-operated same-shop sales growing by 7.4%. 

Despite the stock being up nearly 139% from its five-year low in September 2023, analysts still see enormous potential upside over the next 12 months. Here’s why. 

How Dutch Bros Roasted Q3 Earnings Expectations

In addition to beating on the top and bottom lines in Q3, as well as seeing strong same-shop sales growth, Dutch Bros also announced that 38 new store locations across 17 states were opened during the quarter. That aligns with its target of opening 160 new shops by the end of 2025. 

The company’s ability to scale while maintaining quality and a cult-like following has been an enormous part of its success. The Tempe, Arizona-based chain now has a footprint in 24 states with long-term plans to reach 4,000 locations. 

But that degree of growth is not negatively impacting the company’s bottom line.

Dutch Bros expects full-year capital expenditures between $240 million and $260 million in 2025, largely attributable to its exceptionally high growth rate.

However, it also expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $285 million and $290 million by year’s end. 

As a result, during its Q3 earnings call, the company announced that it was raising full-year guidance with total revenues in the target range of $1.61 billion to $1.6145 billion. In her remarks, CEO Christine Barone highlighted how the company’s culture resonates with customers and prospective employees alike, the latter of which demonstrate a Chick-fil-A-esque passion for service and quality. 

“Year to date, we have received over 400,000 applications to work at Dutch Bros,” Barone pointed out. “For about 11,000 open field positions.”

Dutch Bros’ ‘Broista’ Culture Is Overshadowing Competitors

Dutch Bros is competing for consumer discretionary dollars with the likes of Dunkin’ and Starbucks NASDAQ: SBUX—and the company has done an incredible job of differentiating itself from other coffee retailers. 

Foremost, Dutch Bros primarily operates drive-thru locations. While some shops have walk-up windows and very few have indoor seating, customers are increasingly placing their orders on the company’s mobile app, earning subsequent rewards and grabbing their orders at the drive-thru window.  

The strength of the company is in its brand. And while that includes iced coffees and energy drinks, it also involves “the continued importance of genuine connection, which our Broistas embody and has been a cornerstone of Dutch [Bros’] growth since … 1992,” as Barone noted in her earnings call comments.

This is a stark contrast from Starbucks, which continues to grapple with store closures, labor strikes, and generally inferior optics. Dutch Bros also differentiates itself from its largest competitor by making its brand more accessible. Whereas Starbucks is considered a premium brand with its trendy cafe vibe, Dutch Bros is tech-centric and energetic.

Through its app, the company accelerated its mobile order rollout over the past quarter. As of Sept. 30, Dutch Bros achieved 90% for its total system of shops and 96% coverage for its company-operated shops.

Much of that success is due to Veniki Krishnababu, the company’s chief technology and information officer, who served in the same role with lululemon athletica NASDAQ: LULU and, prior to that, with Primera Blue Cross. Since joining Dutch Bros in December 2024, Krishnababu has prioritized the company’s mobile app and its accompanying rewards program, which has been enormously successful in creating brand loyalty.  

That combination of culture and technology is separating Dutch Bros from the pack, which has resulted in it being the fastest-growing coffee chain in the United States by revenue growth.  

Looking Forward, Analysts Are Incredibly Bullish 

After an 11th consecutive earnings beat and the upward revision to forward guidance, it’s not surprising to see Wall Street being incredibly bullish on Dutch Bros moving forward. 

Of 23 analysts rating the stock, BROS receives a consensus Buy rating, with 20 assigning it a Buy, three assigning it a Hold, and none assigning it a Sell. Meanwhile, analysts’ average 12-month price target of $77 represents nearly 38% potential upside. 

The stock is also heavily favored among the smart money.

While publicly traded large-cap companies average around 70% institutional ownership, that figure for Dutch Bros stands at 85.54%, with 361 institutional buyers outnumbering 190 institutional sellers over the past 12 months.