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Is Dutch Bros Positioned to Benefit From Rising Coffee Demand?
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Key Takeaways
Dutch Bros Q2 revenues rose 28% y/y to $416M, with the adjusted EPS of $0.26 beating estimates.
It opened 31 shops, expanding into Indiana and keeping the 2025 target of 160 openings on track.
Loyalty program drove 72% of transactions, while mobile ordering grew to more than 11% of sales.
Dutch Bros Inc. ((BROS - Free Report) ) is demonstrating strong momentum as it seeks to capture a larger share of the growing U.S. coffee and beverage market.
In second-quarter 2025, the company reported revenues of $416 million, up 28% year over year, with adjusted EPS of 26 cents, beating estimates. Same-shop sales rose 6.1%, driven primarily by a 3.7% increase in transactions, underscoring resilient customer demand.
Growth is being fueled by shop openings, 31 in the quarter, as Dutch Bros expanded into Indiana, marking its 19th state. The company remains on track to open at least 160 shops in 2025, pushing its footprint beyond 1,000 locations. Strong new-shop productivity and elevated average unit volumes suggest sustained consumer enthusiasm.
Dutch Bros is also investing in innovation and digital engagement. Seasonal flavors, expanded food pilots and the Dutch Rewards loyalty program, now accounting for 72% of transactions, are helping deepen customer relationships. Meanwhile, mobile ordering has gained traction, accounting for more than 11% of sales, particularly strengthening morning traffic.
Financially, the company delivered a 37% jump in adjusted EBITDA and raised its full-year revenue and same-store sales guidance. A healthy balance sheet, with $694 million in liquidity, supports its aggressive growth strategy.
With secular demand trends for cold beverages, energy drinks and customizable coffee on the rise, Dutch Bros’ differentiated culture, expanding footprint and disciplined execution position it well to capitalize. While competition in the coffee space remains intense, the company’s consistent transaction growth and strong unit economics signal long-term potential.
Competing in a Crowded Coffee Landscape
While Dutch Bros is scaling rapidly, it faces stiff competition from established players like Starbucks Corporation ((SBUX - Free Report) ) and Tim Hortons, owned by Restaurant Brands International Inc. ((QSR - Free Report) ). Starbucks remains the dominant force in specialty coffee, leveraging its global presence, strong mobile order ecosystem, and premium beverage innovation. Its extensive scale and digital loyalty program make it a formidable rival in capturing repeat visits and higher spend per customer.
Tim Hortons, though primarily Canada-based, is expanding in the United States and has sharpened its value-driven strategy with affordable coffee and breakfast options. Its emphasis on convenience and bundling resonates with price-sensitive consumers, a segment Dutch Bros is also targeting with its customizable, competitively priced drinks.
Both competitors highlight the challenges Dutch Bros faces in balancing speed, culture and innovation while differentiating itself in a saturated market. Yet its regional brand strength and youthful positioning give it room to carve out a niche.
BROS’ Price Performance, Valuation & Estimates
Dutch Bros’ stock has skyrocketed 66.5% in the past year against the industry’s decline of 8%.
Price Performance
Image Source: Zacks Investment Research
BROS is trading at a premium to the industry, with a forward 12-month price-to-sales of 5.11X. The figure is well above the industry average of 3.59X.
P/S(F12M)
Image Source: Zacks Investment Research
Over the past 60 days, BROS' 2025 earnings estimates have increased to 68 cents per share from 59 cents.
Image: Bigstock
Is Dutch Bros Positioned to Benefit From Rising Coffee Demand?
Key Takeaways
Dutch Bros Inc. ((BROS - Free Report) ) is demonstrating strong momentum as it seeks to capture a larger share of the growing U.S. coffee and beverage market.
In second-quarter 2025, the company reported revenues of $416 million, up 28% year over year, with adjusted EPS of 26 cents, beating estimates. Same-shop sales rose 6.1%, driven primarily by a 3.7% increase in transactions, underscoring resilient customer demand.
Growth is being fueled by shop openings, 31 in the quarter, as Dutch Bros expanded into Indiana, marking its 19th state. The company remains on track to open at least 160 shops in 2025, pushing its footprint beyond 1,000 locations. Strong new-shop productivity and elevated average unit volumes suggest sustained consumer enthusiasm.
Dutch Bros is also investing in innovation and digital engagement. Seasonal flavors, expanded food pilots and the Dutch Rewards loyalty program, now accounting for 72% of transactions, are helping deepen customer relationships. Meanwhile, mobile ordering has gained traction, accounting for more than 11% of sales, particularly strengthening morning traffic.
Financially, the company delivered a 37% jump in adjusted EBITDA and raised its full-year revenue and same-store sales guidance. A healthy balance sheet, with $694 million in liquidity, supports its aggressive growth strategy.
With secular demand trends for cold beverages, energy drinks and customizable coffee on the rise, Dutch Bros’ differentiated culture, expanding footprint and disciplined execution position it well to capitalize. While competition in the coffee space remains intense, the company’s consistent transaction growth and strong unit economics signal long-term potential.
Competing in a Crowded Coffee Landscape
While Dutch Bros is scaling rapidly, it faces stiff competition from established players like Starbucks Corporation ((SBUX - Free Report) ) and Tim Hortons, owned by Restaurant Brands International Inc. ((QSR - Free Report) ). Starbucks remains the dominant force in specialty coffee, leveraging its global presence, strong mobile order ecosystem, and premium beverage innovation. Its extensive scale and digital loyalty program make it a formidable rival in capturing repeat visits and higher spend per customer.
Tim Hortons, though primarily Canada-based, is expanding in the United States and has sharpened its value-driven strategy with affordable coffee and breakfast options. Its emphasis on convenience and bundling resonates with price-sensitive consumers, a segment Dutch Bros is also targeting with its customizable, competitively priced drinks.
Both competitors highlight the challenges Dutch Bros faces in balancing speed, culture and innovation while differentiating itself in a saturated market. Yet its regional brand strength and youthful positioning give it room to carve out a niche.
BROS’ Price Performance, Valuation & Estimates
Dutch Bros’ stock has skyrocketed 66.5% in the past year against the industry’s decline of 8%.
Price Performance
Image Source: Zacks Investment Research
BROS is trading at a premium to the industry, with a forward 12-month price-to-sales of 5.11X. The figure is well above the industry average of 3.59X.
P/S(F12M)
Image Source: Zacks Investment Research
Over the past 60 days, BROS' 2025 earnings estimates have increased to 68 cents per share from 59 cents.
Image Source: Zacks Investment Research
Dutch Bros currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.