By Evie Liu
Beverage chain Dutch Bros posted first-quarter results after the market closed on Wednesday that were stronger than Wall Street expected, and raised its outlook for the full year. Still, shares fell on Thursday as consumers worried about whether growth could be sustained amid a weaker consumer environment and intense competition.
In the three months ended in March, total revenue grew 30.8% from a year ago to $464.4 million, easily beating Wall Street analysts' expectation of $450 million.
Same-shop sales increased 8.3% from a year ago, lifted partially by a 5.1% rise in transactions. Management noted that transaction volume has grown for the seventh quarter in a row.
Net income was $23.7 million, also up 5.3% from the same period of 2025. That translated into earnings of 16 cents per share, higher than Wall Street expectations of 15 cents.
CEO Christine Barone highlighted strength in both existing and new markets throughout different periods of the day and customer demographics.
Based on the strong performance throughout the first quarter and the performance so far in the second quarter, the company raised its full-year guidance for 2026.
Revenue is now projected between $2.05 billion and $2.08 billion, up from $2 billion to $2.03 billion in previous estimates. Same-shop sales growth is estimated in the range of 4% to 6%, up from 3% to 5% previously.
Adjusted earnings before interest, taxes, depreciation, and amortization is estimated to be between $370 million and $380 million, up from $355 million to $365 million in previous estimates.
Still, Dutch Bros stock took a 10% dive on Thursday. Investors might be worried that expectations had run too high and turned weary of the stock's valuation.
Before Thursday's fall, shares were trading at nearly 60 times forward earnings. While that's much lower than the nearly 140 times valuation in early 2025, it's still much higher than Starbucks' 38 times.
Concerns about competition might also have weighed on the narrative, said BNP Paribas analyst Steve McManus. Management had addressed those concerns on the earnings call, noting that growth in some regions remained strong despite overlapping with rivals and that some of its best-selling locations are nearby legacy peers.
"We believe Dutch Bros' first-mover advantage, differentiated engagement model, and innovation pipeline continue to support outsized growth," said McManus, who raised his target price for the stock to $76 from $73.
Write to Evie Liu at evie.liu@barrons.com
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(END) Dow Jones Newswires
May 07, 2026 12:19 ET (16:19 GMT)
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