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Dutch Bros Inc. BROS is scheduled to release third-quarter 2025 results on Nov. 5.
The Zacks Consensus Estimate for BROS’ third-quarter earnings per share (EPS) is pegged at 17 cents, suggesting 6.3% growth from 16 cents reported in the prior-year quarter. The consensus mark for earnings has remained unchanged over the past 60 days.
The consensus mark for third-quarter revenues is pegged at $411.1 million, indicating growth of 21.6% from the year-ago quarter’s reported figure.
Dutch Bros has an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 91.9%.
Our proven model predicts an earnings beat for Dutch Bros this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here.
BROS’ Earnings ESP: Dutch Bros has an Earnings ESP of +6.93%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dutch Bros’ Zacks Rank: The company carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Revenue Drivers
Dutch Bros’ third-quarter performance is expected to have reflected continued momentum from strong transaction trends, disciplined unit expansion and sustained customer engagement. Strategic initiatives centered on enhancing throughput, expanding brand awareness and deepening digital loyalty are likely to have supported top-line growth in the to-be-reported quarter.
The company entered the third quarter with robust traffic levels and elevated shop productivity, underscoring the effectiveness of its marketing cadence and operational execution. Dutch Bros’ ongoing menu innovation — including the success of limited-time offerings and the expansion of its food pilot across select markets — is expected to have bolstered average ticket and frequency, particularly in the morning daypart.
The Zacks Consensus Estimate for third-quarter revenues from company-operated shops is pegged at $378.6 million, compared with $308.3 million reported in the prior-year quarter. Franchising and other revenues are projected at $32.7 million compared with $29.9 million reported in the year-ago quarter.
Increased focus on shop development is likely to have aided the company’s performance in the third quarter. Management indicated plans to open approximately 40 new system shops, supported by a refined market-planning process and an increasingly capital-efficient build-to-suit model. Early performance of these new openings, coupled with steady same-shop sales growth and rising Dutch Rewards participation, likely reinforced revenue momentum in the third quarter.
Transaction-driving initiatives, such as the order-ahead channel and targeted paid advertising, may have further expanded customer reach and supported incremental sales in the third quarter. The company expects third-quarter system same-shop sales growth to be in the range of 3.5% to 4%, factoring in roughly 60 basis points of net price rollover.
Margins
Dutch Bros’ third-quarter margins are expected to have reflected a balance between strong sales flow-through and ongoing reinvestments in growth initiatives. Continued dairy cost favorability likely provided a modest offset to rising coffee input costs and tariff-related pressures. The company expects the third-quarter company-operated shop contribution margin to be approximately 28.5%.
While labor efficiency gains from improved deployment models and speed-based performance dashboards may have aided shop-level leverage, incremental occupancy costs tied to accelerated unit growth and higher preopening expenses likely weighed on profitability. In addition, transitional expenses related to the headquarters relocation and sustained marketing investments to build brand awareness may have tempered third-quarter margins.
Shares of Dutch Bros have gained 6.1% so far this year against the industry’s fall of 12.4%. In the same time frame, other industry players like Starbucks Corporation SBUX, Sweetgreen, Inc. SG and Chipotle Mexican Grill, Inc. CMG have declined 11.3%, 80.3% and 47.4%, respectively.
From a valuation standpoint, BROS trades at a forward price-to-sales (P/S) multiple of 4.76, above the industry’s average of 3.34. Conversely, industry players, such as Starbucks, Sweetgreen and Chipotle, have P/S multiples of 2.37, 0.91 and 3.27, respectively.
Dutch Bros’ robust demand trends and consistent transaction growth continue to reinforce management’s confidence in its multiyear expansion strategy. Elevated new-shop productivity, strong same-shop sales momentum and rising brand awareness underpin the company’s ability to sustain long-term revenue growth. Strategic initiatives centered on throughput optimization, menu innovation and digital engagement — particularly through the Dutch Rewards program, which accounts for more than 70% of system transactions — are strengthening customer frequency and loyalty. The company’s capital-efficient build-to-suit model and disciplined market-planning approach support its goal of opening at least 160 shops in 2025 and achieving more than 2,000 locations by 2029, positioning Dutch Bros to capture meaningful share in the expanding specialty beverage category.
On the financial front, the successful refinancing of its $650 million credit facility has enhanced liquidity and extended financial flexibility, allowing continued reinvestment in high-return growth initiatives. Efficiency gains from refined labor deployment, improved throughput tools and disciplined cost management are expected to support margin stability even as the company navigates rising coffee and occupancy costs. Backed by a scalable drive-through model, strong cultural foundation and expanding national footprint, Dutch Bros is well-positioned to sustain profitable growth and deliver long-term shareholder value.
Dutch Bros enters its third-quarter earnings release on a strong operational footing, backed by robust traffic trends, disciplined expansion and continued digital engagement. The company’s strategic investments in throughput optimization, menu innovation and loyalty-driven marketing have positioned it well to sustain top-line momentum. Although near-term margin pressures from higher input and occupancy costs may persist, improved cost controls and favorable commodity trends should likely provide partial relief.
Supported by firm same-shop sales gains, improving shop productivity and increased liquidity from its recent refinancing, Dutch Bros is well-positioned to absorb cost pressures while continuing its robust expansion strategy. With a track record of positive earnings surprises, a favorable Earnings ESP and a strong Zacks Rank, the company looks poised for another potential beat — reinforcing its appeal as a steady growth play in the specialty beverage market. As momentum builds into the third quarter of 2025 and beyond, Dutch Bros’ strong fundamentals and disciplined execution further strengthen its case as a stock worth owning.
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This article originally published on Zacks Investment Research (zacks.com).
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