Dutch Bros (BROS 0.18%) stock tumbled 9.6% through 10:45 a.m. Thursday despite beating on Q1 earnings report last night.
Analysts expected the coffee chain to earn $0.15 per share, pro forma, but the Bros poured out a $0.16 profit. Sales that were supposed to be $449.4 million came in at $464.4 instead.
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Dutch Bros Q1 earnings
Sales surged 31% year over year, with 8.3% coming from same-store sales growth, and the remainder from new store openings. Dutch Bros opened 41 new shops in the quarter, franchising eight and owning 33 of them.
That's the good news; now here's the bad: On earnings, it turns out the $0.16 figure was a non-GAAP number. Actual earnings calculated under generally accepted accounting principles (GAAP) were only $0.13 per share -- flat against last year's Q1.
(That number would have looked better, but Dutch Bros diluted its shareholders with stock issuances over the past year, growing its share count by 4.8% and spreading out profits among more shares outstanding.)
NYSE: BROS
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What's next for Dutch Bros stock?
Continuing to focus on sales growth, Dutch Bros raised its guidance for the rest of this year, promising revenue of $2.05 billion or more and same-store sales growth of 4% to 6%. The good news is that the company is free cash flow positive and will probably remain so this year.
Management noted it plans to spend about $280 million on capital investment in 2026. If analyst forecasts for $340 million in operating cash flow are correct, that should leave Dutch Bros with $60 million in positive cash profits this year, up about 10% from 2025.
That would still value the stock at roughly 120 times FCF, however. Pretty pricey for a cup of coffee if you ask me.
