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Key Takeaways
- Shares of Dutch Bros lost more than a fifth of their value in intraday trading Thursday, a day after the coffee chain projected low-single-digit 2024 same-store sales growth.
- The coffee chain’s second-quarter results beat analysts’ estimates, but its same-store sales outlook was deemed “underwhelming” by Wedbush analysts.
- Analysts said Dutch Bros could see sales decrease in the second half of the year.
Shares of Dutch Bros (BROS) lost more than a fifth of their value in intraday trading Thursday, a day after the coffee chain projected low-single-digit 2024 same-store sales growth.
The company reported $324.9 million in revenue and $22.2 million in net income for the quarter, both above analysts’ estimates compiled by Visible Alpha. Sales rose 30% from last year, while profits more than doubled as same-store sales rose 4.1% across all Dutch Bros locations.
Dutch Bros Lifts Guidance, With Modest H2 Outlook
Dutch Bros lifted its 2024 revenue guidance to a range of $1.215 billion to $1.23 billion, up from $1.2 billion to $1.215 billion previously. Same-store sales growth is projected in the low-single digits, which analysts said could mean Dutch Bros has a weaker second half of the year after Q1 and Q2 comparable-store growth came in at 10% and 4.1%, respectively.
Wedbush analysts called the affirming of the same store sales growth projection “underwhelming” considering the positive first half of the year, but said it’s not surprising given the company’s history of being conservative with its estimates.
Dutch Bros also said Wednesday that it expects new store openings to end up on the lower end of its previously guided range of 150 to 165 locations. JPMorgan analysts said the company has worked to “refine” its strategy of opening new locations in terms of real estate and market. However, JPMorgan and Wedbush analysts both maintained positive ratings on the stock and price targets of $44 and $45, respectively.
Markets appeared to be focused on the new store projections and likelihood that the second half of the year brings lower same-store sales growth or a decline, as Dutch Bros shares were down 22% to $29.46 as of 11:35 a.m. ET Thursday, their lowest point since May.