What happened
Shares of coffee chain Dutch Bros (BROS 0.48%) soared on Thursday after the company reported financial results for the second quarter of 2022 that Wall Street loved. As of 10 a.m. ET today, Dutch Bros stock was up 20%.
So what
Second-quarter results were basically what management had guided for. Revenue of $186 million was up 44% year over year. The company opened 31 new stores compared to guidance of 30 new stores. And same-store sales were down 3.3% from last year, but management had warned of this small decline.
NYSE: BROS
Key Data Points
After seeing these financial results, analyst Nicole Miller Regan of Piper Sandler and David Tarantino of Baird raised their price targets for Dutch Bros stock to $50 and $46, respectively, according to The Fly. Among reasons to be encouraged with the second-quarter results was how management is navigating inflation. By raising menu prices and looking for cost savings, the company was able to increase margins at company-owned locations to 24.6% compared to 18.3% just one quarter ago. That's a huge single-quarter jump.
Now what
Dutch Bros ended the second quarter with 603 stores. In the long term, it believes it can have 4,000 U.S. locations, and it'll keep marching toward that goal by opening at least another 65 in the second half of 2022.
Previously, management was guiding for full-year 2022 revenue of $700 million to $715 million. With its second-quarter report, it now believes $715 million will be on the low end of its revenue this year. For perspective, reaching $715 million in 2022 revenue would represent nearly 44% growth from 2021 and 192% growth from 2020.
Dutch Bros is a hot growth stock that investors love. Its operating loss of $11.6 million in the first half of 2022 isn't outrageous. And if it can keep putting up top-line growth numbers like these while keeping operating losses to a minimum, then the stock could have long-term upside.
