Dutch Bros brews up strong quarter; sees potential for 4,000 locations

Dutch Bros Inc. reported top- and bottom-line growth for its third quarter as it continues its aggressive expansion.

The fast-growing drive-thru coffee chain is on track to open at least 150 new shops this year. It opened 39 new locations across 11 states — including its first ever in Alabama and Kentucky — during the quarter, for a total count of 794 stores in 16 states as of Sept. 30, a 23.9% year-over-year increase. (It has since reached 800 locations.) Of the 39 new shops, 37 were company operated.

On Dutch Bros’ earnings call, CEO Joth Ricci said the company will continue to “confidently pursue high-quality investments in new shops on our path toward 4,000” [shops]. 

Ricci, who has served as CEO since January 2019, will depart at the end of year. He will be succeeded by Christine Barone, who has served as Dutch Bros president since February 2023, effective January 1. 

Dutch Bros reported that its net income increased 38% to $13.4 million in the quarter ended Sept. 30, compared to $1.6 million in the year-ago period.  Adjusted earnings per share came in at $0.14 as compared to $0.09 in the same period last year. 

Total revenues grew 33.2% to $264.5 million as compared to $198.6 million in the same period of 2022. Systemwide same-store sales increased 4%.

“By all accounts, Q3 was a fantastic quarter, and we are extremely pleased with our unit openings, same shop sales, revenue, and profitability results,” said Ricci. “I am encouraged by the strength of the underlying business as we execute on our plan. Despite a difficult consumer backdrop, we drove a 4.0% increase in systemwide same shop sales and delivered 33% growth in our top-line revenue.”

Dutch Bros forecasts that its full-year revenues will exceed $950 million.

The company welcomed two new members of its board, C. David Cone and Sean Sullivan, who were recently added to fill vacancies resulting from the resignations of Shelley Broader and Charles Esserman. 

Cone served as CFO and executive VP at Taylor Morrison Home Corp., a residential homebuilding business and land developer from October 2012 to December 2021. Prior to that, he held various roles at PetSmart from 2003 to 2012.

Sullivan has served as executive VP, chief strategy and legal officer of The Duckhorn Portfolio, a producer of luxury wines in North America, since February 2019.