SBUX - Dutch Bros: Delicious Growth Like Good Old Coffee

2024-06-09 01:39:43 ET

Summary

• Company free from Economic and Financial Risk. Your need for liquidity is met by the Immobilization Model.
• The company has a strong focus on maintaining organizational culture to generate value and authenticity for customers.
• Dutch Bros plans to reach 4,000 units in the medium term and is expanding with three new unit models.
• The company is experiencing accelerated growth and is proving to be sustainable. Although FCF remains negative due to Capex, in approximately two years the company will change this scenario (if not sooner).
• Multiples when adjusted for growth indicate there is still room to buy.

Contextualization and Investment Thesis

Dutch Bros ( BROS ) is a drive-thru restaurant operator and franchisor that has been in the industry since 1992. With a very characteristic organizational culture, a value proposition based on brand authenticity and the creation of other non-functional benefits that make up the customer experience and differentiate Dutch from other regional operators.

In addition to its authenticity and characteristics that are qualitatively positive for an operator within the QSR segment, what is making the market look so fondly at this company? To put it into context, since its IPO in 2021, Dutch Bros has performed well above the industry average (in six months Dutch's performance was 1,076.35% above the restaurant industry overall), and even more so when we put it into perspective Quick Service Restaurants are going through a very characteristic moment, with large operators entering a spiral of promotional environments with the aim of increasing unit turnover....

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