Dutch Bros: Coffee & Chaos – A Buy!

Listen up, folks! Dutch Bros. (BROS 4.69%) – yes, the coffee people – they’ve been doing a little tap dance lately. A bit of a wobble, if you will. Last year? Oy vey! The whole restaurant business was looking like a Borscht Belt comedian on a bad night. Down 21%? That’s enough to give a portfolio hives! But hold on to your hats, because their latest numbers? They’re not just good, they’re…well, they’re caffeinated! It’s like they slipped a little something extra into the brew, and investors are finally waking up.

Fourth quarter revenue jumped 29% to $443.6 million! 29%! That’s not a growth spurt, that’s a rocket launch! And the earnings per share? Surged 143% to $0.17! I haven’t seen numbers like that since I tried to count all the pigeons in Times Square. A truly impressive feat. And speaking of feats, can someone explain why the pigeons aren’t wearing tiny hats?

Now, let’s talk about same-store sales. Up 7.7%! Transactions up 5.4%! These people aren’t just grabbing a quick jolt; they’re coming back for more! Company-operated shops? Even better – 9.7% and 7.6% respectively. Nineteen consecutive years of positive same-store sales! That’s not luck, folks, that’s a well-oiled, caffeine-fueled machine. It’s like they’ve discovered the secret to eternal coffee happiness.

And the unit economics? Forget about it! Average unit volume climbing to $2.1 million! Two. Point. One. Million! Starbucks, that behemoth, is only at $1.8 million. That’s like comparing a Rolls Royce to…well, to a slightly smaller Rolls Royce. Still fancy, but Dutch Bros. is driving the faster car, I tell ya. It’s a beautiful thing, really. A beautiful, profitable thing.

They opened 55 new shops during the quarter, bringing the total to 1,136. 1,136! They’re planning for 2,029 by 2029. That’s nearly doubling the number of locations! They’re not just expanding; they’re building a coffee empire! A caffeine-fueled, strategically-placed coffee empire. I suspect they’re secretly training an army of baristas to take over the world, but that’s just a theory.

The outlook? Robust! They’re guiding for roughly $2 billion in revenue for 2026, which is 23% growth. In line with expectations, yes, but let’s be honest, analysts are often about as accurate as a broken clock. Still, it’s a good sign. And same-store sales growth of 3% to 5%? Not bad, not bad at all. It’s enough to keep this old investor buzzing.

CEO Christine Barone says it’s all about “authentic human connection, industry-leading innovation, and incredible depth in field leadership.” Sounds like a marketing speech, right? But you know what? She’s right! It’s the little things – the friendly baristas, the innovative drinks, the sheer volume of coffee being consumed – that make Dutch Bros. special. And special, my friends, translates to profit.

The stock was up as much as 14% in after-hours trading! Investors are cheering! They’re throwing confetti! They’re demanding more coffee! Okay, maybe not the confetti, but the point is, confidence is back. And that, my friends, is a beautiful sight to behold. It’s like watching a comeback story unfold in real time. A caffeinated, financially-sound comeback story.

Okay, let’s talk valuation. The stock is trading at 102 times earnings. Rich, yes, very rich. But Dutch Bros. is growing so fast, traditional metrics are a little…wonky. The forward price/earnings-to-growth (PEG) ratio is a mere 0.34. Anything under 1 is considered undervalued. That’s like finding a twenty-dollar bill in an old coat pocket! A delightful surprise!

So, here’s my take: I believe Dutch Bros. is a buy. A strong buy. A caffeinated, potentially world-dominating buy. Don’t ask me for financial advice, I’m just a guy who likes coffee and a good stock. But trust me on this one. This isn’t just about coffee; it’s about a culture, an experience, and a whole lot of profit. And that, my friends, is something worth investing in.

2026-02-13 03:34

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