Dutch Bros Is Down 18% in 2026, But Its Loyalty Program and Unit Economics Still Look Strong
Key Points
Dutch Bros' loyalty program accounted for 72% of all transactions in 2025 -- a healthy sign.
The coffee chain is targeting 181 new stores in 2026 with total revenue reaching $2 billion.
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The coffee is hot, but Dutch Bros (NYSE: BROS) stock has cooled in 2026. Shares of the Oregon-based drive-thru coffee chain have slid more than 17% since the start of the year, but the company's fundamentals tell a strong growth story. The pullback in stock price could be a compelling entry point for long-term investors.
The coffee and fundamentals are hot
In 2025, the business opened 154 new shops across 22 states. Revenue grew by nearly 28% last year, and net income almost doubled from $66.5 million in 2024 to $117.3 million in 2025.
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Dutch Bros' unit economics are impressive. As the coffee franchise expands its footprint, the latest quarterly report shows increased profitability among shops as well. The company's average unit volumes (AUVs) reached a record $2.1 million, with shop-level contribution margins of about 29%. AUVs are an important metric calculated by dividing total annual sales by the number of shops.
In 2025, systemwide sales grew from $1.8 billion to $2.2 billion. As sales grow, it's becoming increasingly clear that Dutch Bros' most powerful competitive edge is the Dutch Rewards loyalty program. An astonishing 72% of all transactions were from the loyalty program last year. This is up from 68% in 2024. The loyalty program now boasts more than 15 million members.
The stock was poured over ice
Dutch Bros stock was largely seen as expensive and perhaps overvalued. The long-term growth prospects justify these concerns, however. While competitors like Starbucks saw a decline in same-store visits last year, Dutch Bros saw a 13.4% year-over-year increase. Dutch Bros' scalable model is working.
The coffee chain is targeting at least 181 new stores in 2026 and plans to exceed 2,000 locations by 2029. Dutch Bros' 2026 outlook projects revenue of at least $2 billion. The long-term growth trajectory is stronger than a cup of black coffee here, as Dutch Bros still only operates in 25 states. Starbucks has more than 32,000 locations globally, and Dunkin' has over 14,000.
Dutch Bros' forward and trailing P/E ratios are still high at 64 and 79, respectively. Yet, with the stock down significantly year to date, these metrics have also declined and could represent an attractive entry point for investors who believe in the franchise's long-term growth strategy.
The decline in stock price was more representative of macroeconomic conditions than the company's actual fundamentals, which is why Dutch Bros remains a solid buy for long-term investors.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dutch Bros and Starbucks. The Motley Fool has a disclosure policy.
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