Dutch Bros Shifts to Build-to-Suit Leases Amid Rising Costs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy BROS?
Source: NASDAQ.COM
- Lease Transition: Dutch Bros is shifting its leases to build-to-suit arrangements, which will increase occupancy costs; however, management believes this strategy will support future expansion plans, with a goal of opening 181 new locations in 2026.
- Coffee Cost Pressure: Due to coffee price volatility, Dutch Bros expects a 60 basis point pressure on adjusted EBITDA margins, with a 200 basis point headwind in the first quarter primarily from rising coffee costs, potentially impacting short-term profitability.
- Expansion Plans: As of the end of 2025, Dutch Bros had 1,136 coffee shops nationwide, and management sees significant market potential, aiming for 7,000 shops in the U.S., with projected revenue growth of 25% CAGR over the next three years.
- Investor Confidence: Despite near-term margin pressures, management remains optimistic about coffee cost fluctuations, viewing them as temporary; in the long run, sustained expansion and healthy store performance are expected to enhance overall profitability.
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Analyst Views on BROS
Wall Street analysts forecast BROS stock price to rise
10 Analyst Rating
10 Buy
0 Hold
0 Sell
Strong Buy
Current: 50.600
Low
70.00
Averages
78.80
High
85.00
Current: 50.600
Low
70.00
Averages
78.80
High
85.00
About BROS
Dutch Bros Inc. is an operator and franchiser of drive-thru shops, which is focused on serving hand-crafted beverages. The Company sells a range of customizable hot, iced and blended beverages. Coffee-based beverages include handcraft espresso shots for both hot and cold custom classic and signature coffee beverages. It also sells proprietary coffee-based Freeze blended beverages and cold brew. Its Private Reserve coffee is a 100% Arabica three-bean blend, roasted by the Company in Grants Pass, Oregon or Melissa, Texas facilities. The Company has two segments: Company-operated shops, and Franchising and other. The Company-operated shops segment includes retail coffee shop sales to end consumers. The Franchising and other segment includes bean and product sales to franchise partners and includes the initial franchise fees, royalties, and marketing fees. It has approximately 1,101 shops, of which over 779 are operated by the Company and 322 are franchised, across 26 states.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Dutch Bros Rapid Expansion and Strong Sales in 2025
- Rapid Store Expansion: Dutch Bros opened 154 new locations in 2025, increasing its store count by 16%, which, while coming off a small base, indicates significant growth potential compared to Starbucks' 40,000 locations.
- Same-Store Sales Growth: The company achieved same-store sales growth every quarter in 2025, culminating in a 5.6% annual increase and an impressive 7.7% in Q4, indicating strong customer attraction and a 3.2% rise in transaction volume.
- Significant Revenue Increase: With new store openings and robust same-store sales, Dutch Bros saw a 29% revenue growth in 2025, demonstrating solid profitability with earnings of $0.64 per share, an 88% year-over-year increase.
- Future Growth Plans: Although Dutch Bros is still in growth mode with plans to open 181 new stores in 2026, this will consume most of its earnings, making it less appealing to conservative investors, while aggressive growth investors should consider a deeper analysis of the company.
See More
Dutch Bros Shows Strong Performance Despite 30% Stock Drop
- New Store Openings: Dutch Bros opened 154 new locations in 2025, increasing its total store count by 16%, which, while coming off a small base, offers significant growth potential for long-term investors compared to Starbucks' 40,000 locations.
- Same-Store Sales Growth: The company achieved same-store sales growth every quarter in 2025, with an annual increase of 5.6% and an impressive 7.7% in Q4, alongside a 3.2% rise in transaction volume, indicating its ability to attract new customers.
- Significant Revenue Increase: With new store openings and strong same-store sales, Dutch Bros reported a remarkable 29% revenue growth in 2025, demonstrating solid profitability with earnings of $0.64 per share, an 88% year-over-year increase.
- Future Expansion Plans: Although Dutch Bros remains in growth mode with plans to open 181 new stores in 2026, which will consume most of its earnings, it presents a compelling opportunity for aggressive growth investors looking for high-potential investments.
See More
McDonald's Expands Beverage Options, Poses Challenge to Dutch Bros
- Increased Market Competition: McDonald's has confirmed the rollout of handcrafted sodas and refreshers next month, with flavored energy drinks to follow in summer, posing a potential threat to Dutch Bros, which has built its reputation on creative beverages popular among younger consumers.
- Dutch Bros' Growth Journey: Founded 34 years ago, Dutch Bros now operates over 1,000 locations across nearly half of U.S. states, with coffee accounting for about 50% of sales and its proprietary Blue Rebel energy drinks making up 25%, showcasing its strong growth potential in the beverage market.
- McDonald's Market Strategy: McDonald's previously launched the CosMc's concept in Illinois focusing on artisan beverages, and although it closed some locations early on, its strategy to test premium drinks nationwide indicates a serious commitment to the beverage market, which could further impact Dutch Bros' market share.
- Dutch Bros Financial Performance: Despite a generally positive market, Dutch Bros' stock has declined 6% this week, reflecting investor concerns about future growth under pressure from larger competitors like McDonald's, even as it reported a 29% revenue increase and a 7.7% rise in same-store sales in its latest quarter.
See More
Dutch Bros Growth Potential Over Next Five Years
- Significant Sales Growth: Dutch Bros achieved a 29% year-over-year sales increase in Q4 2025, with comparable sales rising by 7.7%, indicating strong customer return and increased spending even amid economic pressures, suggesting a promising future.
- Ambitious Expansion Plans: With 1,136 stores at the end of 2025, Dutch Bros aims to reach 7,000 stores in the coming years, planning to open at least 181 new locations in 2026; if these perform well, they will further drive sales and comparable sales growth.
- Optimistic Revenue Projections: Should the company maintain a 20% compound annual growth rate over the next five years, revenue could reach nearly $4 billion, significantly exceeding the $1.6 billion total in 2025, reflecting strong market demand and growth potential.
- Substantial Stock Potential: As sales and profits grow, Dutch Bros stock could potentially double over the next five years, if not rise even higher, reflecting the company's ongoing expansion and improving profitability outlook.
See More
Dutch Bros Rapid Expansion and Sales Growth
- Significant Sales Growth: Dutch Bros achieved a 29% year-over-year sales increase in Q4 2025, with comparable sales rising by 7.7%, indicating a strong customer return and increased purchasing power despite macroeconomic pressures, thereby solidifying its market position.
- Store Expansion Plans: As of the end of 2025, Dutch Bros operates 1,136 stores and aims to expand to 7,000 stores in the coming years, planning to open at least 181 new locations in 2026, which, if successful, will further boost sales and comparable sales growth.
- Massive Revenue Potential: If the company maintains a 20% compound annual growth rate, revenue could reach nearly $4 billion by 2029, significantly exceeding the 2025 total of $1.6 billion, showcasing strong growth potential and market appeal.
- Stock Price Recovery Expectations: With rising sales and profits, Dutch Bros stock could potentially double over the next five years, although the analyst team did not include it among the best investment stocks, its market performance remains noteworthy.
See More
Dutch Bros Faces Rising Coffee Cost Pressures Amid Growth
- Performance Pressure: Dutch Bros anticipates a 60 basis point pressure on its adjusted EBITDA margin for 2026, primarily due to rising coffee costs and increased occupancy expenses, which will negatively impact profitability.
- Expansion Plans: As of the end of 2025, Dutch Bros operated 1,136 coffee shops across 25 states and aims to open at least 181 new locations in 2026; while this will raise occupancy costs, it is viewed as crucial for future financial growth.
- Revenue Growth Expectations: Consensus analyst estimates project Dutch Bros to achieve a 25% compound annual growth rate in revenue over the next three years, with adjusted earnings per share expected to rise by 27% annually, indicating strong market potential.
- Coffee Cost Volatility: Although coffee prices have decreased by 22% in the past year, they remain double the price from five years ago; Dutch Bros' CFO noted that coffee costs account for 10% of the company's cost of goods sold and believes that the volatility is temporary, with normalization expected in the future.
See More
Dutch Bros Rapid Expansion and Strong Sales in 2025
- Rapid Store Expansion: Dutch Bros opened 154 new locations in 2025, increasing its store count by 16%, which, while coming off a small base, indicates significant growth potential compared to Starbucks' 40,000 locations.
- Same-Store Sales Growth: The company achieved same-store sales growth every quarter in 2025, culminating in a 5.6% annual increase and an impressive 7.7% in Q4, indicating strong customer attraction and a 3.2% rise in transaction volume.
- Significant Revenue Increase: With new store openings and robust same-store sales, Dutch Bros saw a 29% revenue growth in 2025, demonstrating solid profitability with earnings of $0.64 per share, an 88% year-over-year increase.
- Future Growth Plans: Although Dutch Bros is still in growth mode with plans to open 181 new stores in 2026, this will consume most of its earnings, making it less appealing to conservative investors, while aggressive growth investors should consider a deeper analysis of the company.
See More
Dutch Bros Shows Strong Performance Despite 30% Stock Drop
- New Store Openings: Dutch Bros opened 154 new locations in 2025, increasing its total store count by 16%, which, while coming off a small base, offers significant growth potential for long-term investors compared to Starbucks' 40,000 locations.
- Same-Store Sales Growth: The company achieved same-store sales growth every quarter in 2025, with an annual increase of 5.6% and an impressive 7.7% in Q4, alongside a 3.2% rise in transaction volume, indicating its ability to attract new customers.
- Significant Revenue Increase: With new store openings and strong same-store sales, Dutch Bros reported a remarkable 29% revenue growth in 2025, demonstrating solid profitability with earnings of $0.64 per share, an 88% year-over-year increase.
- Future Expansion Plans: Although Dutch Bros remains in growth mode with plans to open 181 new stores in 2026, which will consume most of its earnings, it presents a compelling opportunity for aggressive growth investors looking for high-potential investments.
See More
McDonald's Expands Beverage Options, Poses Challenge to Dutch Bros
- Increased Market Competition: McDonald's has confirmed the rollout of handcrafted sodas and refreshers next month, with flavored energy drinks to follow in summer, posing a potential threat to Dutch Bros, which has built its reputation on creative beverages popular among younger consumers.
- Dutch Bros' Growth Journey: Founded 34 years ago, Dutch Bros now operates over 1,000 locations across nearly half of U.S. states, with coffee accounting for about 50% of sales and its proprietary Blue Rebel energy drinks making up 25%, showcasing its strong growth potential in the beverage market.
- McDonald's Market Strategy: McDonald's previously launched the CosMc's concept in Illinois focusing on artisan beverages, and although it closed some locations early on, its strategy to test premium drinks nationwide indicates a serious commitment to the beverage market, which could further impact Dutch Bros' market share.
- Dutch Bros Financial Performance: Despite a generally positive market, Dutch Bros' stock has declined 6% this week, reflecting investor concerns about future growth under pressure from larger competitors like McDonald's, even as it reported a 29% revenue increase and a 7.7% rise in same-store sales in its latest quarter.
See More
Dutch Bros Growth Potential Over Next Five Years
- Significant Sales Growth: Dutch Bros achieved a 29% year-over-year sales increase in Q4 2025, with comparable sales rising by 7.7%, indicating strong customer return and increased spending even amid economic pressures, suggesting a promising future.
- Ambitious Expansion Plans: With 1,136 stores at the end of 2025, Dutch Bros aims to reach 7,000 stores in the coming years, planning to open at least 181 new locations in 2026; if these perform well, they will further drive sales and comparable sales growth.
- Optimistic Revenue Projections: Should the company maintain a 20% compound annual growth rate over the next five years, revenue could reach nearly $4 billion, significantly exceeding the $1.6 billion total in 2025, reflecting strong market demand and growth potential.
- Substantial Stock Potential: As sales and profits grow, Dutch Bros stock could potentially double over the next five years, if not rise even higher, reflecting the company's ongoing expansion and improving profitability outlook.
See More
Dutch Bros Rapid Expansion and Sales Growth
- Significant Sales Growth: Dutch Bros achieved a 29% year-over-year sales increase in Q4 2025, with comparable sales rising by 7.7%, indicating a strong customer return and increased purchasing power despite macroeconomic pressures, thereby solidifying its market position.
- Store Expansion Plans: As of the end of 2025, Dutch Bros operates 1,136 stores and aims to expand to 7,000 stores in the coming years, planning to open at least 181 new locations in 2026, which, if successful, will further boost sales and comparable sales growth.
- Massive Revenue Potential: If the company maintains a 20% compound annual growth rate, revenue could reach nearly $4 billion by 2029, significantly exceeding the 2025 total of $1.6 billion, showcasing strong growth potential and market appeal.
- Stock Price Recovery Expectations: With rising sales and profits, Dutch Bros stock could potentially double over the next five years, although the analyst team did not include it among the best investment stocks, its market performance remains noteworthy.
See More
Dutch Bros Faces Rising Coffee Cost Pressures Amid Growth
- Performance Pressure: Dutch Bros anticipates a 60 basis point pressure on its adjusted EBITDA margin for 2026, primarily due to rising coffee costs and increased occupancy expenses, which will negatively impact profitability.
- Expansion Plans: As of the end of 2025, Dutch Bros operated 1,136 coffee shops across 25 states and aims to open at least 181 new locations in 2026; while this will raise occupancy costs, it is viewed as crucial for future financial growth.
- Revenue Growth Expectations: Consensus analyst estimates project Dutch Bros to achieve a 25% compound annual growth rate in revenue over the next three years, with adjusted earnings per share expected to rise by 27% annually, indicating strong market potential.
- Coffee Cost Volatility: Although coffee prices have decreased by 22% in the past year, they remain double the price from five years ago; Dutch Bros' CFO noted that coffee costs account for 10% of the company's cost of goods sold and believes that the volatility is temporary, with normalization expected in the future.
See More
