Why Dutch Bros Stock Lost 22% in March

Dutch Bros is simply a tiny but fast-growing concatenation of java shops headquartered connected the West Coast but moving rapidly passim the country. It precocious surpassed 1,000 stores and is unrecorded successful 18 states.

Between caller stores and same-store income growth, gross is expanding astatine double-digit rates. It was up 35% successful the 4th fourth driven by caller stores and same-store sales. It opened 32 caller stores successful the 4th and reported a 6.9% summation successful same-store income twelvemonth implicit year.

It's besides go highly profitable astatine scale. Contribution margin, which is similar operating borderline astatine the edifice level, expanded from 26.5% to 28.9% successful the 4th quarter, and nett income accrued from $3.8 cardinal to $6.4 million.

Management is expecting to accelerate store openings successful 2025 from 151 past twelvemonth to astir 160 this year, and it has semipermanent goals of 20% yearly gross growth.

For a while, absorption had said it saw the accidental for 4,000 stores. It precocious got caller management, and it's been making galore changes, including what it sees arsenic its marketplace opportunity. Its caller extremity is to scope 2,029 stores by 2029, much than doubling its existent store count, with the longer-term accidental to scope 7,000 stores.

Another breathtaking accidental is successful packaged goods. It conscionable announced a concern with Trilliant Food and Nutrition to motorboat a caller enactment of packaged java and different products to beryllium sold astatine retail stores.

Dutch Bros banal had been hitting astronomical valuations earlier its caller fall, and it's a bully acquisition successful wherefore valuation matters. Highly valued stocks are astir apt to driblet erstwhile the marketplace gets nervous. However, adjacent down past month, Dutch Bros banal is inactive beating the market, up 20% twelvemonth to date.

At the existent price, it's inactive not cheap, trading astatine a guardant one-year P/E ratio of 76. There's a accidental it volition spell adjacent lower, but you can't clip the market. If you person immoderate appetite for hazard and a agelong clip horizon, you tin bargain immoderate shares astatine this price. You mightiness privation to usage a dollar-cost-averaging strategy to unfastened a presumption contiguous and payment from amended prices astatine different point.

Before you bargain banal successful Dutch Bros, see this: