-
Total Revenue: $355 million, a 29% increase year-over-year.
-
Adjusted EBITDA: $63 million, a 20% increase year-over-year.
-
System Same-Shop Sales Growth: 4.7%.
-
Company-Operated Same-Shop Sales Growth: 6.9%.
-
Transaction Growth: 1.3% system-wide; 3.7% for company-operated shops.
-
Net Income: Adjusted EPS of $0.14, up from $0.09 in the previous year.
-
New Shops Opened: 30 new shops in Q1, bringing the total to 1,012.
-
Cash and Cash Equivalents: $316 million as of March 31.
-
Capital Expenditures: Average CapEx per shop was approximately $1.67 million.
-
Liquidity: Total liquidity of $658 million, including cash and undrawn revolver.
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
-
Dutch Bros Inc (NYSE:BROS) reported a 29% increase in total revenue for Q1 2025 compared to the same period last year, driven by new shop growth and productivity.
-
The company opened its 1,000th shop in Orlando, Florida, and plans to open 1,000 more by 2029, indicating strong expansion plans.
-
System same-shop sales grew by 4.7%, with company-operated same-shop sales increasing by 6.9%, showcasing strong brand resonance and customer loyalty.
-
The Dutch Rewards program contributed to 72% of system transactions, showing a 5-point improvement from the previous year, enhancing customer engagement.
-
Dutch Bros Inc (NYSE:BROS) successfully implemented an order-ahead program, which accounted for 11% of transaction mix, improving customer convenience and throughput.
-
Labor costs increased by 100 basis points year-over-year, primarily due to investments in California, impacting overall margins.
-
The company faces potential cost pressures from tariffs, with less than 10% of its COGS basket being sourced internationally, including coffee.
-
Despite strong revenue growth, adjusted EBITDA margin faced a 60 basis point pressure due to elevated beverage, food, and packaging costs.
-
The company is still in the early stages of its food pilot program, with food sales currently less than 2% of total sales, indicating limited immediate impact.
-
Dutch Bros Inc (NYSE:BROS) anticipates continued cost pressures from coffee prices, which could affect future profitability despite current price locks.
Q: How is Dutch Bros performing in the second quarter, and what are the expectations for same-store sales growth? A: Christine Barone, CEO, stated that Dutch Bros is experiencing strong momentum in Q2, aligning with expectations. The company anticipates 3% to 4% same-store sales growth, considering a 150 basis point price roll-off. The traffic trend from Q1 is continuing into Q2, adjusted for the Leap Day impact.
Q: Can you elaborate on the productivity of new stores and any factors contributing to this? A: Christine Barone highlighted that Q1 saw some of the top openings of all time, indicating strong brand reception. The company expects strong new shop productivity and average unit volumes (AUVs) to persist throughout the year, with particular strength noted in Q1.
Q: What is the impact of mobile ordering on sales and customer behavior? A: Mobile ordering is driving incremental sales and increased frequency among rewards members. Christine Barone noted that new markets are seeing quicker adoption of the rewards program, and mobile orders are boosting morning daypart traffic, aligning with customer demand for convenience.
Q: How is Dutch Bros managing labor costs, and what are the expectations moving forward? A: Josh Guenser, CFO, explained that strategic investments in shop leadership compensation are expected to offset sales leverage benefits. Labor costs are anticipated to remain stable, with adjustments made for investments in California and shop leadership.
Q: What are the plans for the food pilot program, and how does it impact the business? A: Christine Barone mentioned that the food pilot has expanded from 8 to 32 shops, with plans for a broader market test. The focus is on capturing additional beverage opportunities with minimal complexity. Although food margins are lower than beverage margins, the overall business impact is positive due to incremental beverage sales.
Q: How does Dutch Bros plan to address potential macroeconomic challenges? A: Christine Barone expressed confidence in Dutch Bros' value proposition and brand resonance with customers, despite broader macroeconomic concerns. The company is leveraging innovation, rewards, and advertising to sustain growth and mitigate potential consumer environment impacts.
Q: What is the strategy for Dutch Bros' entry into the CPG channel? A: The CPG channel is seen as a long-term opportunity to drive brand awareness and complement the existing business. Christine Barone noted that it is a license deal, allowing for a light-touch approach while expanding brand presence.
Q: How are new markets, particularly Texas, expected to impact comparable store sales? A: Christine Barone indicated that newer markets, including Texas, are performing strongly, contributing to overall growth. The company expects these markets to provide a tailwind as they mature and enter the comparable store base.
Q: What operational improvements are being implemented to enhance productivity and throughput? A: Dutch Bros is focusing on visibility during peak hours and identifying bottlenecks in shops. Christine Barone described the use of speed dashboards and flexible deployment systems to optimize team performance and improve service speed.
Q: How does Dutch Bros plan to leverage paid advertising to drive trial in new markets? A: Paid advertising is effective in building brand awareness in new markets. Christine Barone emphasized the importance of combining advertising with rewards program adoption and menu exploration to accelerate customer engagement and trial.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
