Revenue Exceeds Estimates Despite Asset Sales

Drive over to the Dutch Bros. coffee chain NYSE: BROS reported Q1 2026 results on May 6, and despite a big year-over-year (YOY) increase in revenue, the market punished the stock.

BROS shares traded off before and after Wednesday’s earnings call, falling as much as 9.9% before recovering slightly on Thursday afternoon.

But for shareholders and prospective investors, it’s important to understand that the sudden drop in value was largely due to profit-taking and short-term concerns, and the long-term bull case for Dutch Bros remains intact.

As Revenue Increases, Dutch Bros Raises Full-Year Guidance

Unlike well-established competitors like Starbucks NASDAQ: SBUXDutch Bros remains a volatile, high-growth stock.

Known for its fast service model and community-oriented product, the company is growing rapidly. In Q1, Dutch Bros opened 41 new locations and expects that number to reach 185 by the end of 2026. That will go a long way in reaching the company’s goal of 2,029 stores by 2029.

Notably, Dutch Bros also saw its 2026 acquisition of Clutch Coffee Bar—a North Carolina-based drive-thru chain—start paying off. Clutch locations are being converted at a cost of approximately $1.4 million per store, bringing new Dutch Bros stores online at a reduced cost and resulting in those locations becoming more efficient than ever with nearly 3x volumes.

That growth led to a top-line hit in Q1, while earnings per share (EPS) of 16 cents met analyst expectations. Revenue for the quarter was the big story, however, with $464.4 million easily beating the consensus of $449.7 million.

It’s now 12 months in a row since Dutch Bros last missed earnings, which happened in Q1 2023. But the result was quarterly revenue, which rose 30.8% YOY—the highest since Q4 2024. Much of that was driven by same-store sales (SSS) growth of 8.3%, as Texas grew at a higher 20%.SS

Ultimately, the strong report translated into revised guidance for the full year, including:

• Revenue is estimated at $2.05 billion and $2.08 billion

• SSS growth between 4% and 6%

• Adjusted EBITDA increased to $370 million to $380 million

• At least 185 new store locations, up from an initial estimate of 181

In her earnings call comments, CEO Christine Barone highlighted the success of app-based Dutch Rewards, noting that the company “ended Q1 with a record 74% in-app sales.”

With a forward price-to-earnings (P/E) ratio of nearly 65—a significant improvement over its trailing 12-month P/E of 83.68—Dutch Bros is expected to grow its earnings by nearly 32% next year, from 82 cents per share to $1.08 per share.

After a Strong Q1, Why Did Dutch Bros Sell?

Post-earnings declines can happen even after a beat, especially when valuations are inflated and investors are focused on what’s next.

The market reaction was partly driven by profit taking, but also by a negative reaction to the company’s full-year guidance. The decline in SSS growth from 8.3% in Q1 to around 3.6% in the second half of the year was the main reason.

Concerns about the stock’s still-elevated P/E, and margin compression were another focus. Net income for Dutch Bros company-operated stores increased to 20% from about 22% last year, driven by higher input costs, particularly higher labor and material costs. That led management to forecast full-year cost of goods sold about 60 basis points higher.

Another concern was long-term debt. Capital lease obligations jumped more than 30% YOY from $709 million to a record $922 million, but that underscores the company’s rapid growth, which should continue to drive revenue growth.

Dutch Bros vs. Starbucks: What’s the Limit?

While the analyst consensus rating for both coffee chains is a Neutral Buy, the one-year price target estimate for Dutch Bros indicates that it has much higher strength than Starbucks.

Currently, analysts see about a 40% potential upside for BROS shares, while SBUX shares are predicted to be less than 3%.

Meanwhile, slightly more than half (16 out of 30) analysts covering Starbucks give the stock a buy rating, while 23 out of 26 analysts covering Dutch Bros give it a buy rating.

Institutional ownership also favors Dutch Bros, with nearly 86% ownership near buyers (394) more than double sellers (183) over the past year.

Starbucks institutional ownership is in line with the S&P 500 average at just over 72%, while buyers (1,507) have made less than sellers (1,499) over the past year.

Another big difference is the short interest. Given Dutch Bros’ natural volatility as a growth stock, resulting in a beta of 2.40, it continues to be a target for Wall Street bears.

Current short interest stands at more than 20% of the float, or more than 20 million shares of approximately 165 million shares outstanding.

By comparison, Starbucks’ short interest—though not as much at about 4% of the float, or about 45 million shares for nearly 1.14 billion shares—is down significantly.

It is worth noting that Starbucks remains the standard benchmark for coffee sales in the US, but the risk profiles differ between the two companies: The rapid growth of Dutch Bros could come with a sharp drawdown, while the scale of Starbucks could translate into different strength and expectations.

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