Is Dutch Bros Stock Is a Buy on the Dip as Same-Store Sales Continue to Sizzle?

In one of the more head-scratching moves this earnings season, Dutch Bros (NYSE: BROS) shares sank despite the coffee shop operator turning in another stellar quarter. As of this writing, the stock is down about 13% year to date.

Let's take a closer look at its results and prospects, and at why I think Dutch Bros could be a great long-term stock buy.

Image source: The Motley Fool.

Same-store sales shine again

In what has been a very uneven consumer environment, Dutch Bros once again found a way to shine. Its same-store sales surged by 8.3% in the quarter, as transactions climbed 5.1%. Company-owned stores once again outperformed, with comparable-shop sales climbing 10.6% on a 6.9% increase in transactions.

The company credited drink innovation, as well as limited-time offerings (LTOs) and merchandise drops, for its strong results. It said it saw a 30% increase in LTO unit sales and 50% higher merchandise sales versus last year.

Use of the Order Ahead option (available via mobile app and the website) continues to rise, now accounting for 15% of all Dutch Bros orders, up from 14% at the end of last year. Meanwhile, 74% of all transactions now come through the Dutch Rewards program. Food continues to deliver a 4% lift in comparables, and it is now being offered at 485 shops.

Dutch Bros also continues to aggressively grow its store base. It opened 41 new shops in the quarter, including 33 company-owned locations. It now expects to add at least 185 new shops in 2026, up from prior guidance for at least 181 stores.

Overall revenue climbed 31% to $464.4 million, while earnings per share (EPS) were flat at $0.13. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 26% to $79.4 million.

Looking ahead, the company raised its full-year revenue guidance to $2.05 billion to $2.08 billion, up from a prior outlook of $2 billion to $2.03 billion. It also raised its adjusted EBITDA forecast to $370 million to $380 million, up from $355 million to $365 million. It projected same-store sales growth of 4% to 6% for the year and near 5% for the second quarter.

Why the stock is a buy

Dutch Bros is seeing some of the best same-store growth in the restaurant space and has one of the largest expansion opportunities in the industry as well. The only real knocks on the company are rising rent costs as it shifts to built-to-suit leases and higher coffee bean prices.

However, this is still an efficient model. While rent costs as a percentage of revenue are higher than for Starbucks, this is largely due to its rival having a more mature store base. Meanwhile, Dutch Bros has lower labor expenses, and it hasn't understaffed its stores as Starbucks has done in the past.

Dutch Bros is still in the early phases of its growth, yet it trades at a forward price-to-sales (P/S) multiple of 3.2, versus 3.1 for the much more mature Starbucks. That makes it one of the most intriguing growth stocks in the consumer space to own long-term.

Geoffrey Seiler has positions in Dutch Bros. The Motley Fool has positions in and recommends Dutch Bros and Starbucks. The Motley Fool has a disclosure policy.