Drive-thru coffee kiosk operator Dutch Bros (BROS) is fresh off its latest earnings report where it boosted its outlook for 2025. Dutch Bros stock is digesting in a base after the stock got a jolt higher following the report.
The IBD Sector Leaders name said it had 1,043 locations across 19 states as of June 30, with a goal of opening at least 160 new shops in 2025.
Dutch Bros ranks No. 1 out of 56 stocks in the Retail-Restaurants group. The stock holds an IBD SMR Rating of "A," meaning it is in the top 20% of names in terms of sales growth, profit margins, and return on equity, or ROE.
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The stock popped 21.6% in heavy volume after the coffee shop chain reported better-than-expected second-quarter earnings and sales on Aug. 6. Shares have been testing their 10-week moving average since the jump.
Dutch Bros is in a stage-three consolidation pattern with a 77.88 buy point, according to MarketSurge pattern recognition. But a trendline can be drawn from its all-time high of 86.88, offering an early entry around 72. Something to watch is its relative strength line, as it has been on a downtrend since peaking in February.
Mutual funds own a whopping 83% of shares and have boosted their positions for eight straight quarters, according to IBD Stock Checkup.
Dutch Bros reported second-quarter profit of 26 cents per share vs. 19 cents per share a year ago. Its revenue grew 28% while its same-shop sales increased 6.1%. The retailer's sales growth has averaged 31% over the last eight quarters.
"I am pleased to announce that we are raising our full-year guidance for total revenues, same-shop sales growth, and adjusted EBITDA," Chief Executive Christine Barone said in the earnings release. EBITDA is a measure of profitability.
Dutch Bros now expects full-year 2025 revenue between $1.59 billion and $1.6 billion, with same-shop sales growth of around 4.5%.
But the company may have to battle higher bean costs due to tariffs, as the Bureau of Labor Statistics reported that coffee prices soared 14.5% in July on a year-over-year basis.
Analysts see sales rising an average of 24% over the next four quarters. Moreover, Wall Street 2025 earnings growth forecasts have been recently revised up to 37%, and to 30% in 2026.
The company holds a 97 out of 99 IBD Earnings Per Share Rating and a 96 Composite Rating.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
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