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Dutch Bros Up 10% in a Month: Should You Buy, Sell or Hold the Stock?
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Key Takeaways
BROS posts strong traffic and comp gains, supported by rapid shop expansion and digital engagement.
Record AUVs, rising loyalty use and a growing food program are driving sustained customer momentum.
Higher coffee, labor and preopening costs may pressure margins amid accelerating growth plans.
Dutch Bros Inc.’s (BROS - Free Report) shares have climbed about 10% over the past month against the industry’s decline of 1.1%.
The gain was supported by accelerating shop growth, strong transaction gains, improved digital engagement and early success from its new food program. Record-high AUVs, a strong development pipeline and rising loyalty penetration have fueled bullish sentiment. However, rising coffee costs, labor-related regulatory pressures and a more expensive rollout of hot food could weigh on margins.
In the past month, shares of other industry players like Starbucks Corporation (SBUX - Free Report) , Yum China Holdings, Inc. (YUMC - Free Report) and Texas Roadhouse, Inc. (TXRH - Free Report) have gained 4.9%, 7.7% and 2%, respectively.
Price Performance
Image Source: Zacks Investment Research
Here is a deeper breakdown to help investors decide whether to buy, sell, or hold BROS stock.
What’s Working for Dutch Bros
Dutch Bros delivered a standout quarter, with system same-shop sales up 5.7%, driven largely by 4.7% transaction growth, its fifth consecutive quarter of positive traffic. Company-operated shops performed even better with a 7.4% comp increase, fueled by nearly 7% transaction growth. This makes Dutch Bros a rare traffic outlier in a challenging industry backdrop. Management credits this trend to improved throughput, stronger labor deployment and rising loyalty engagement.
The company added 38 shops in third-quarter 2025, bringing the system total to 1,081. With a record-level development pipeline, Dutch Bros now approves more than 30 new sites per month, setting the stage for a projected 175 new system shops in 2026. The company remains confident in its long-term target of 2,029 shops by 2029, supported by strong real estate availability and consistent customer demand in new markets.
Digital continues to be a major catalyst. Order Ahead now represents 13% of system transactions, nearly double that rate in newer markets. Meanwhile, Dutch Rewards accounted for 72% of all transactions, reflecting deeper customer engagement and effective use of segmented offers. Both channels are still early in their development and offer meaningful runway for frequency and personalization-driven growth.
The company’s hot food rollout, now in roughly 160 shops, is delivering an estimated 4% comp lift, with both ticket and transaction benefits. The program strengthens Dutch Bros' morning positioning and enhances attach rates, especially when paired with mobile ordering. Management expects to continue rolling out food through 2026, expanding shop-level capabilities and broadening the chain’s appeal during breakfast dayparts.
Dutch Bros continues to highlight its “Broista-driven” culture as a key competitive moat. The brand ranks #1 in order accuracy, satisfaction and beverage quality across major beverage competitors, according to industry surveys referenced on the call. High-energy service and extensive beverage customization keep younger cohorts especially engaged — a positive sign given the broader industry’s Gen Z traffic concerns.
Negative Factors That Could Pressure the Stock
Coffee costs, a major input, were already 60 basis points unfavorable year over year in the third quarter and are expected to accelerate into fourth-quarter 2025 and stay elevated into 2026. The forthcoming broader food rollout will also raise COGS, adding incremental cost pressure. Additionally, labor costs will rise in the fourth quarter due to regulatory changes in California, amounting to a roughly 50-basis-point margin headwind, with partial impact likely extending into 2026. Together, these factors may constrain near-term profit expansion even as revenue grows.
As Dutch Bros expands aggressively into new states, preopening expenses have risen, up 60 basis points year over year. Training teams must travel to support new market launches, particularly in the Southeast and Midwest, creating incremental spend. With shop openings skewing later in the fourth quarter and a larger 2026 pipeline looming, these expenses are set to remain elevated. While necessary for scaling, they temporarily pressure earnings and could limit upside to EBITDA in the near term.
Expanding food, increasing digital penetration and scaling to more than 2,000 units introduce operational complexity. Management acknowledges the need for stronger analytics, labor deployment tools and cultural consistency mechanisms as the brand grows. Any misstep in execution, especially during peak hours or in newer markets, could affect the brand’s hallmark service experience. While the company appears proactive, the execution risk is real, particularly given the rapid expansion cadence.
Dutch Bros’ Estimate Revisions
In the past 30 days, the Zacks Consensus Estimate for 2025 and 2026 has been revised downward by 1.5% to 67 cents and 2.3% to 86 cents, respectively. These estimates indicate year-over-year growth rates of 36.7% and 27.6%, respectively.
Image Source: Zacks Investment Research
BROS Trades at Premium Valuation
Dutch Bros is trading at a premium to the industry, with a forward 12-month price-to-sales of 5.08X, which is well above the industry average of 3.22X. Meanwhile, Starbucks, Yum China and Texas Roadhouse are trading at P/S ratios of 2.54X, 1.38X and 3.22X, respectively.
P/S (F12M)
Image Source: Zacks Investment Research
Buy, Sell or Hold?
Dutch Bros appears well-positioned for long-term growth, supported by strong traffic momentum, an accelerating development pipeline and rising digital engagement, all of which reinforce the brand’s competitive edge. However, the near-term outlook is clouded by higher commodity costs, regulatory labor pressures and elevated expansion expenses that are likely to weigh on margins as the company scales its food program and enters new markets. At the same time, earnings expectations have softened and the stock carries a richer valuation than many peers, limiting the margin of safety for fresh entrants.
For existing investors, the company’s strategic execution, loyal customer base and multiyear growth visibility make it worth holding through temporary cost pressures. For new investors, however, the combination of rising expenses, downward estimate revisions and an elevated valuation suggests it is prudent to wait for a more attractive entry point before initiating positions in the stock.
Image: Bigstock
Dutch Bros Up 10% in a Month: Should You Buy, Sell or Hold the Stock?
Key Takeaways
Dutch Bros Inc.’s (BROS - Free Report) shares have climbed about 10% over the past month against the industry’s decline of 1.1%.
The gain was supported by accelerating shop growth, strong transaction gains, improved digital engagement and early success from its new food program. Record-high AUVs, a strong development pipeline and rising loyalty penetration have fueled bullish sentiment. However, rising coffee costs, labor-related regulatory pressures and a more expensive rollout of hot food could weigh on margins.
In the past month, shares of other industry players like Starbucks Corporation (SBUX - Free Report) , Yum China Holdings, Inc. (YUMC - Free Report) and Texas Roadhouse, Inc. (TXRH - Free Report) have gained 4.9%, 7.7% and 2%, respectively.
Price Performance
Image Source: Zacks Investment Research
Here is a deeper breakdown to help investors decide whether to buy, sell, or hold BROS stock.
What’s Working for Dutch Bros
Dutch Bros delivered a standout quarter, with system same-shop sales up 5.7%, driven largely by 4.7% transaction growth, its fifth consecutive quarter of positive traffic. Company-operated shops performed even better with a 7.4% comp increase, fueled by nearly 7% transaction growth. This makes Dutch Bros a rare traffic outlier in a challenging industry backdrop. Management credits this trend to improved throughput, stronger labor deployment and rising loyalty engagement.
The company added 38 shops in third-quarter 2025, bringing the system total to 1,081. With a record-level development pipeline, Dutch Bros now approves more than 30 new sites per month, setting the stage for a projected 175 new system shops in 2026. The company remains confident in its long-term target of 2,029 shops by 2029, supported by strong real estate availability and consistent customer demand in new markets.
Digital continues to be a major catalyst. Order Ahead now represents 13% of system transactions, nearly double that rate in newer markets. Meanwhile, Dutch Rewards accounted for 72% of all transactions, reflecting deeper customer engagement and effective use of segmented offers. Both channels are still early in their development and offer meaningful runway for frequency and personalization-driven growth.
The company’s hot food rollout, now in roughly 160 shops, is delivering an estimated 4% comp lift, with both ticket and transaction benefits. The program strengthens Dutch Bros' morning positioning and enhances attach rates, especially when paired with mobile ordering. Management expects to continue rolling out food through 2026, expanding shop-level capabilities and broadening the chain’s appeal during breakfast dayparts.
Dutch Bros continues to highlight its “Broista-driven” culture as a key competitive moat. The brand ranks #1 in order accuracy, satisfaction and beverage quality across major beverage competitors, according to industry surveys referenced on the call. High-energy service and extensive beverage customization keep younger cohorts especially engaged — a positive sign given the broader industry’s Gen Z traffic concerns.
Negative Factors That Could Pressure the Stock
Coffee costs, a major input, were already 60 basis points unfavorable year over year in the third quarter and are expected to accelerate into fourth-quarter 2025 and stay elevated into 2026. The forthcoming broader food rollout will also raise COGS, adding incremental cost pressure. Additionally, labor costs will rise in the fourth quarter due to regulatory changes in California, amounting to a roughly 50-basis-point margin headwind, with partial impact likely extending into 2026. Together, these factors may constrain near-term profit expansion even as revenue grows.
As Dutch Bros expands aggressively into new states, preopening expenses have risen, up 60 basis points year over year. Training teams must travel to support new market launches, particularly in the Southeast and Midwest, creating incremental spend. With shop openings skewing later in the fourth quarter and a larger 2026 pipeline looming, these expenses are set to remain elevated. While necessary for scaling, they temporarily pressure earnings and could limit upside to EBITDA in the near term.
Expanding food, increasing digital penetration and scaling to more than 2,000 units introduce operational complexity. Management acknowledges the need for stronger analytics, labor deployment tools and cultural consistency mechanisms as the brand grows. Any misstep in execution, especially during peak hours or in newer markets, could affect the brand’s hallmark service experience. While the company appears proactive, the execution risk is real, particularly given the rapid expansion cadence.
Dutch Bros’ Estimate Revisions
In the past 30 days, the Zacks Consensus Estimate for 2025 and 2026 has been revised downward by 1.5% to 67 cents and 2.3% to 86 cents, respectively. These estimates indicate year-over-year growth rates of 36.7% and 27.6%, respectively.
Image Source: Zacks Investment Research
BROS Trades at Premium Valuation
Dutch Bros is trading at a premium to the industry, with a forward 12-month price-to-sales of 5.08X, which is well above the industry average of 3.22X. Meanwhile, Starbucks, Yum China and Texas Roadhouse are trading at P/S ratios of 2.54X, 1.38X and 3.22X, respectively.
P/S (F12M)
Image Source: Zacks Investment Research
Buy, Sell or Hold?
Dutch Bros appears well-positioned for long-term growth, supported by strong traffic momentum, an accelerating development pipeline and rising digital engagement, all of which reinforce the brand’s competitive edge. However, the near-term outlook is clouded by higher commodity costs, regulatory labor pressures and elevated expansion expenses that are likely to weigh on margins as the company scales its food program and enters new markets. At the same time, earnings expectations have softened and the stock carries a richer valuation than many peers, limiting the margin of safety for fresh entrants.
For existing investors, the company’s strategic execution, loyal customer base and multiyear growth visibility make it worth holding through temporary cost pressures. For new investors, however, the combination of rising expenses, downward estimate revisions and an elevated valuation suggests it is prudent to wait for a more attractive entry point before initiating positions in the stock.
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.