- Dutch Bros Inc. (NYSE: BROS) posts 103% rise in second-quarter Ebitda
- Revenue rose 34% in second quarter to $250 million on new locations, same shop sales
- Raises full-year Ebitda guidance to $135 million and $140 million
- President Christine Barone will become CEO and President in January 2024
- Current CEO Joth Ricci to leave after five years at the helm
- Company plans to keep focus on profits but also on trajectory to 4,000 shops long term
Dutch Bros Inc. (NYSE: BROS) reported a surge in second-quarter Ebitda, leading it to raise full-year guidance as it announced company President Christine Barone would become CEO at the start of 2024.
The fast-growing beverage chain, which went public just under two years ago, reported Ebitda of $48.6 million as compared to $23.9 million in the same period of 2022. The improvement was driven in part by strong traffic that led to 580 basis points of sequential same shop sales growth quarter-over-quarter.
In turn, the company now expects full-year Ebitda of $135 million and $140 million, up from at least $125 million.
Store growth also continues to be a key top-line driver, with at least 150 expected in 2023. The company has said it has a target of 4,000 shops over 10-15 years.
“We plan to stay on that trajectory,” Ms. Barone told IPO Edge in an interview. “We have had eight straight quarters of 30-plus shop growth.”
In conjunction with the earnings announcement, Dutch Bros said Ms. Barone would become CEO on January 1, 2024 having been named President in February. Joth Ricci, who has been CEO for about five years, will remain onboard until January to assist the transition.
“This was a small regional business looking for a path to growth,” Mr. Ricci told IPO Edge. “We have achieved many of the goals we set out in August 2018.”
He added that he has known Ms. Barone for a decade and is happy to pass the torch. “It was a natural fit for her to come in,” he said. “We are looking forward to making it a great transition.”
Travis Boersma, Co-founder and Executive Chairman who started the company with his brother Dane in 1992, said, “Joth has been a true partner and will forever be part of the Dutch Bros family… I’m confident in the foundation he’s created and I’m grateful for the years he’s dedicated to Dutch Bros and our crews.”
Turning to strategy, Dutch Bros will continue to focus on reaching a young, growing demographic of consumers whose tastes differ from older generations. Cold drinks, strongly preferred by younger customers, drove over 90% of sales last quarter, consistent with similarly high levels in recent periods.
Mr. Ricci pointed out that Dutch Bros continues to focus on innovations, such as the Firecracker Rebel energy drink with Soft Top & Poppin’ Candy. The special drink, designed to be a fun addition to Fourth of July activities, is a twist on the popular Rebel energy drink topped with fizzing candies similar to Pop Rocks.
Dutch Bros was started in Oregon but has made a steady march further afield, especially in the last few years. Asked about the company’s expansion plans, Ms. Barone said the company pays close attention to what makes customers happiest as it rolls out new locations in states like Texas. “It allows us to continue our move toward the east coast,” she said.
There’s also scope to focus more technology as Dutch Bros grows in years to come, including a focus on an app for Dutch Rewards and the potential to harness more big data. “We’re at the beginning of our journey,” Ms. Barone said.