Dutch Bros: Coffee & Existential Dread

Right. Dutch Bros. (BROS +4.68%). It’s a coffee chain. Apparently, that’s a good thing, in this economy. Or at least, it was a good thing. The stock is down 35% over the last year. Thirty-five percent! It feels…significant. Like a personal failure, somehow. I mean, I didn’t buy the stock, but still. It’s a reflection on everything, isn’t it? A sign that even caffeine-fueled optimism has its limits.

I’ve been looking at the numbers, trying to make sense of it all. It’s a bit like trying to decipher my own dating history – lots of activity, not always a clear path forward. Anyway, the Q4 earnings were…fine. Actually, better than fine. They were…robust. Which is a word I don’t use often, mostly because it makes me think of Victorian novels.

Let’s break it down, shall we? Because lists are calming. And also, I need to justify the hours I’ve spent staring at charts instead of, you know, doing something productive.

Same-Store Sales: Up 7.7%. Which is good. It means people still crave overpriced beverages. Or maybe they’re just seeking a temporary escape from the relentless march of time.
Transactions: Up 5.5%. More people buying coffee. I suspect a correlation with increased anxiety levels.
Company-Owned Stores: Soaring 9.7%. Apparently, owning the means of caffeination is the key to happiness. Who knew?

They’re doing this mobile ordering thing, which is apparently a big deal. About 14% of transactions are done through the app. Which means I’m probably one of the few people still ordering in person, making awkward small talk with the barista. It’s a cross to bear, really. And they’re adding hot food. Hot food! As if coffee wasn’t enough to complicate my already fragile digestive system.

They’re projecting 3-5% same-store sales growth for 2026. Which sounds…reasonable. Assuming the world doesn’t end before then. They also opened 154 new shops last year and plan to open at least 181 more. It’s…ambitious. It feels a bit like they’re trying to outrun something. Or maybe they just really, really like coffee.

Free cash flow was $54.4 million. Which is good. It means they can fund their expansion without resorting to, you know, asking me for money. And they’ve managed to reduce the cost of building each shop from $1.8 million to $1.3 million. Progress! Small victories. I’m clinging to them.

Total Q4 revenue was up 29% to $443.6 million. Adjusted EBITDA surged 49%. Adjusted earnings per share more than doubled. It’s all very…positive. And yet, the stock is still down 35%. It’s a paradox. A cruel, caffeinated paradox.

They’re projecting revenue of $2 billion to $2.03 billion for 2026, with adjusted EBITDA between $355 million and $365 million. It all sounds…promising. If you ignore the looming specter of inflation, geopolitical instability, and the general existential dread that permeates modern life.

Is it a Buy?

Dutch Bros is…expanding. Aggressively. It’s growing its store base, self-funding its expansion, and generating an impressive $2.1 million in average unit volume. It’s a good story. A very good story. If you can stomach the risk. Which, let’s be honest, I rarely can.

They still have room to grow same-store sales with their new food offerings. And trading at a forward price-to-sales multiple of 3.2 versus 2.8 for Starbucks, it’s…a relative bargain. If you believe in the power of caffeine and the enduring appeal of a perfectly brewed latte. Which, on a good day, I do.

Units of Cryptocurrency Lost: 12. Hours Spent Watching Charts: 9. Number of Panicked Texts to Friends: 24. Perhaps I should just stick to tea. Or maybe just give up on investing altogether. It’s all so… exhausting.

But yes. Between its expansion opportunities and same-store growth levers, this is a growth stock to own. If you’re brave enough. I’m not sure I am.

2026-02-17 11:22

Is it a Buy?

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