With a $110 billion market cap, revenue of $9.9 billion in the first quarter of fiscal 2026 (ended Dec. 28, 2025), and more than 41,000 stores worldwide, Starbucks (SBUX 0.84%) is the king of the retail coffee market. But the consumer favorite hasn't been operating at full strength. And CEO Brian Niccol is trying to turn things around, as shares trade 23% below their peak (as of Feb. 4).
Investors can find a more exciting opportunity elsewhere in the industry. There's a little-known coffee stock that's running laps around Starbucks.
Here are three things to know.
Image source: Getty Images.
Winning the rest of the day
Dutch Bros (BROS 4.71%) generates almost 75% of its revenue after 10 a.m. This contrasts with the leading chains, which get half of their sales after 10 a.m.
The advantage for Dutch Bros is that its demand is more spread out throughout the day. This can make it easier for store management teams to staff their locations and handle customer traffic. And its steady sales support the company's goal of $1.8 million in average annual unit volumes. What's more, Dutch Bros is probably attracting a different kind of customer than the person commuting to work in the morning.
Meanwhile, Dutch Bros sees opportunity and is using food to target a bigger audience.
"As we expand the food program throughout 2026, we're aiming to be a one-stop shop during the morning daypart," CEO Christine Barone said on the Q3 2025 earnings call.
Healthy same-store sales growth
Before reporting same-store sales growth in Q4 2025, Starbucks posted six straight quarters of declines. This metric indicates the performance of existing locations on a year-over-year basis, and growth indicates operational health.
At the same time, Dutch Bros registered same-store sales increases in 12 straight quarters, a streak that's still active. It's standing out in the industry.
Starbucks' guidance calls for same-store sales to rise 3% in fiscal 2026, an encouraging trend. This outlook also bodes well for Dutch Bros.
NYSE: BROS
Key Data Points
Rapid expansion is in the cards
Investors might not be too familiar with Dutch Bros given its comparatively small market cap of $9 billion and the fact that it had just 1,081 locations as of Sept. 30, 2025. It's tiny compared to its bigger peer.
This setup just means there is much more room for expansion. The Dutch Bros leadership team believes there is room for 7,000 stores in the U.S. There is meaningful space in the eastern and northern parts of the country. If the business starts to realize its potential, revenue and earnings are set to soar.
Therefore, over the next 10 years, Dutch Bros shares present investors with more upside than Starbucks shares.
