Meet the Monster Stock That Continues to Crush the Market

Key Points

• Dutch Bros is developing products and creating a consumer experience that's generating loyalty.

• It reported outstanding second-quarter earnings.

• It sees the opportunity to increase its store count sevenfold.

• 10 stocks we like better than Dutch Bros ›

The market has been getting plenty of good news lately, and stocks are starting to climb again. President Donald Trump met with Apple CEO Tim Cook last week, with Apple announcing a $600 billion investment in U.S. operations, while Nvidia and Advanced Micro Devices agreed to give 15% of revenue from Chinese goods to the U.S. government in exchange for the ability to sell chips to China.

But coffee chain Dutch Bros' (NYSE: BROS) stock soared last week on its own news, and after middling performance for most of the year, it's up more than 26%, beating the S&P 500's 9% rise.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Here's why the market is loving Dutch Bros.

Image source: Dutch Bros.

Back to the basics

Investors love to get into a detailed earnings report or 10-K filing to see how a company's finances are doing. But the beginning of any great company is a great product. Dutch Bros sells coffee through its chain of just over 1,000 stores today, but its concept was built on innovative products, and that vibrant approach to coffee still drives the business.

Don't get me wrong; the economics here are excellent, which furthers the investment thesis. But it starts with great coffee that customers love, and the high sales follow.

CEO Christine Barone detailed the company's three-part plan to generate higher transaction growth. It involves menu innovation, paid advertising to enhance brand awareness as it rolls out in new regions, and leaning into the loyalty program.

Dutch Bros has always differentiated itself by launching its own branded beverages, and that's one way it stands out. Barone called it a mix of art and science, understanding what's trending in the coffee world and translating it into products that its customers want to drink. Some of the innovation is in the customized beverages, such as protein coffee and flavors like lavender, and some of that is in the menu itself. One of the initiatives it's working on is a pilot of a morning food menu, which is driving higher engagement and sales in the morning coffee run.

Part of the product is the experience, and making its stores a positive experience involves rigorous systems and technology to ensure speed and effective customer service. The company takes things slow in that respect to ensure it has its systems in check before opening new stores or making any changes. Barone said that the food menu will roll out slowly through 2026 even though it's already demonstrating positive metrics, to ensure that stores are ready to handle it.

Phenomenal performance

This fresh approach is driving incredible growth. Revenue increased 28% year over year in the 2025 second quarter, with a 6.1% increase in same-shop sales and a 3.7% increase in transactions.

Company-operated shop contribution margin was 31.1%, 0.3 percentage points higher than last year, and net income increased from $22.2 million to $38.4 million. Management raised full-year guidance after the report.

Massive expansion

Dutch Bros recently hit the 1,000-store mark, up from less than 500 when it went public in 2021. It's planning to double its store count again, hitting 2,029 stores by 2029.

The company is deliberate in its store opening strategy, but it's going to need to accelerate to reach that target. It opened 31 stores in the second quarter, and plans for at least 160 this year, which means things are going to speed up in the second half of the year. It's going to need to open even faster over the next four years to hit that target, but as it refines and perfects its strategy, it should be easier.

Longer term, it sees the opportunity for 7,000 stores, or seven times its current store count. It has already raised that from its original target of 4,000 stores, and that ceiling could be raised again as it builds its brand and generates consumer loyalty.

Dutch Bros is brimming with opportunity, and it's not surprising that investors are scooping it up.

Should you invest $1,000 in Dutch Bros right now?

Before you buy stock in Dutch Bros, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dutch Bros wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,119,863!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 11, 2025

Jennifer Saibil has positions in Apple. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, and Nvidia. The Motley Fool recommends Dutch Bros. The Motley Fool has a disclosure policy.