Dutch Brothers Inc. New York Stock Exchange: BROTS is a thriving drive-thru operator and franchisor with 950 stores in 18 states. While they primarily focus on coffee drinks, they also offer teas, smoothies, protein drinks, and energy drinks. They prioritize speed and efficiency with an app-based, transit-centric operating model that caters to their customers’ on-the-go lifestyles.
Dutch brothers today
(As of 11/22/2024 ET)
- 52 week range
- $25.46
▼
$52.98
- P/E ratio
- 176.56
- Target price
- $47.30
The company reported revenue growth of 29% YoY and same-store sales (SSS) growth of 2.7% YoY in the third quarter of 2024. The most impressive statistic is the $2 million average sales volume (AUV) generated per 950 units. square feet, which is the average store size.
A company in the retail-wholesale sector competes with Starbucks Co. NASDAQ: SBUX And Lukin Coffee Inc. OTsMCTS: LKNCY. At the end of the fourth quarter of fiscal 2024, Starbucks had 40,199 stores (52% company-owned and 48% licensed), adding 722 new stores. Dutch Bros plans to open 150 stores in 2024.
Developing culture and management from within
Like KAWA Group Inc. New York Stock Exchange: KABADutch Bros also has a philosophy of promoting from within as they outline 6 steps towards becoming a regional operator from Broista. They have 400 operator candidates with an average of over seven years of experience. Each person in the process is ready to become a market operator. Dutch Bros received more than 400,000 applications annually for 11,000 open positions.
Impressive third quarter results showing growth across all metrics
Dutch Bros reported third-quarter 2024 earnings per share of 16 cents, beating consensus estimates by 4 cents. Revenue grew 27.9% YoY to $338.2 million, well ahead of consensus estimates of $324.97 million. System same store sales (SSS) rose 2.7% YoY and transactions rose 0 .8% YoY. The company’s managed SSS grew 4% year over year and transaction volume grew 2.4%. Dutch Bros has opened 38 news stores, including 33 company-owned stores, in 11 states. Gross profit at company-operated stores rose to $68.4 million from $57 million last year.
Loyalty program breaks records
The Dutch Rewards loyalty program has recorded its highest number of registrations since its launch, with more than 1 million thanks to the introduction of mobile ordering, of which 858 stores have enabled it. In the third quarter, more than 67% of all transactions were made by Dutch Rewards members. Mobile orders account for 7% of total revenue, leaving plenty of room for growth.
Dutch Bros raises guidance for 2024
Dutch Bros stock forecast for today
$47.30
-7.62% DisadvantageModerate purchase
Based on ratings from 11 analysts
| High forecast | $55.00 |
|---|---|
| Average forecast | $47.30 |
| Low forecast | $36.00 |
Dutch Bros stock forecast details.
For full-year 2024, Dutch Bros raised its revenue guidance to $1.255 billion to $1.260 billion, up from its previous forecast of $1.215 billion to $1.230 billion, compared to the consensus estimate of $1.23 billion. SSS growth is expected to be around 4.25 % YoY, compared to low single digits, and SSS growth in the fourth quarter is expected to be between 1% and 2%. The total number of system store openings in 2024 is expected to be about 150.
Food is the next growth driver
Dutch Bros sells a very limited number of food products. By limited, we mean four items to be exact: Chocolate Chip Cupcake Tops, Lemon Poppyseed Cupcake Tops, Orange Cranberry Cupcake Tops, and Granola Bars. Just as Starbucks rolled out snacks and hot breakfast items to boost food sales, Dutch Bros experimented with increasing the number of baked goods and sweet and savory hot meals at six stores in the third quarter. The initial response has been excellent and the company plans to launch more food products in 2026.
Dutch Bros CEO Christine Barone commented: “Based on the early results, it is likely that a more robust food outlet will play a role in the future for Dutch Bros and we will continue our testing in the coming quarters. With food now accounting for less than 2% of our sales, we clearly see this opportunity.”
BROS forms a daily pennant pattern
The pennant pattern is a combination of a flagpole, representing a parabolic price surge, and a symmetrical triangle pattern at a peak, consisting of a descending upper trend line and an ascending lower trend line converging at the apex point. A breakout occurs when a stock rises above an upper trend line, and a breakout occurs when a stock falls below a lower trend line.
BROS formed an intraday pennant after peaking at $50.24 following third-quarter earnings. A pennant consists of lower highs, indicated by a descending upper trend line, and higher lows, indicated by an ascending lower trend line. The daily flat support VWAP is $44.72. The daily RSI has been holding above the 70 band since the earnings gap. The price gap fill levels are at $43.50 and $35.40. Fibonacci (Fibonacci retracement support levels are located at $43.50, $39.06, $35.40 and $32.08.
BROS average target price is $47.30which implies a growth potential of 1.4%. and his highest analyst price target is US$55. Eight analysts have a Buy recommendation, and three have a Buy recommendation. Maintain your stock rating. The stock’s short interest is 10.79%.
Actionable Option Strategies: Bullish options investors can buy BROS stock on a deeper pullback using cash-backed put options at gap fill and Fibonacci retracement support levels.
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