Dutch Bros Inc (BROS) Q3 2024 Earnings Call Highlights: Strong Revenue Growth and Strategic ...

GuruFocus News
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In This Article:

  • Revenue: $338 million for Q3, a 28% increase year over year.

  • Adjusted EBITDA: $64 million, a 20% increase year over year.

  • Adjusted EPS: $0.16 per share, up $0.02 from Q3 last year.

  • Same-Shop Sales Growth: System-wide 2.7%, company-operated 4%.

  • System-wide AUVs: $2 million, consistent with the all-time record.

  • New Shop Openings: 38 new shops in Q3, total shop count at 950.

  • Company-Operated Shop Revenue: $308 million, a 30% increase year over year.

  • Company-Operated Shop Contribution Margin: 29.5%.

  • Cash and Cash Equivalents: $281 million as of September 30.

  • Net Cash Position: Approximately $43 million.

  • Guidance for 2024 Revenue: Projected between $1.255 billion and $1.26 billion.

  • Guidance for 2024 New Shop Openings: 150 new shops expected.

  • Guidance for 2024 Adjusted EBITDA: Estimated between $215 million and $220 million.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Dutch Bros Inc (NYSE:BROS) reported a 28% increase in revenue and a 20% rise in adjusted EBITDA for Q3 2024, exceeding expectations.

  • The company successfully opened 38 new shops in Q3, bringing the total to 950, and plans to open at least 160 shops in 2025.

  • Mobile order rollout reached 90% system coverage, contributing to a 5% increase in customer frequency and higher tip rates.

  • Dutch Rewards program saw significant growth, with over 1 million new registrations in Q3, accounting for 67% of transactions.

  • Paid advertising efforts have tripled unaided brand awareness in Texas and are driving sales growth in new and mature markets.

Negative Points

  • Labor costs increased by 160 basis points year-over-year, primarily due to higher compensation expenses in California.

  • Occupancy and other costs rose by 110 basis points, driven by elevated repair and maintenance expenses.

  • The company faces challenges in reducing per unit development costs, with average CapEx per shop at approximately $1.7 million.

  • Despite strong growth, food sales remain less than 2% of total sales, indicating limited current impact from food offerings.

  • The mix of transactions showed a negative trend, with a 2% decline in Q3, attributed to discounts and mix changes.

Q & A Highlights

Q: Can you share insights on the shops with higher mobile order penetration and their performance? A: Christine Barone, CEO, explained that newer shops are seeing higher mobile order usage, establishing new customer routines. This is also linked to increased Dutch Rewards registrations, potentially bringing new customers into the brand.

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