2023-08-09 14:28:36 ET
Dutch Bros ( NYSE: BROS ) gained 20.65% in afternoon trading on Wednesday after the restaurant operator topped EPS and adjusted EBITDA estimates with its Q2 earnings report .
Total revenue was up 34.1% in Q2 to $249.9M and system same-shop sales rose 3.8%. During the quarter, company-operated shop contribution margin, which included 150 basis points of pre-opening expense, improved 570 basis from a year ago to 30.3% of sales. BROS reported net income of $9.7M vs. the -$1.8M loss from a year ago.
Analysts said the rally for BROS was helped along by news from the C-suite. The company's board approved a plan to transition Christine Barone, who has served as the Dutch Bros. ( BROS ) President since February 2023, into the role of Chief Executive Officer. The remainder of 2023 will serve as a transitional period for both leaders before Barone takes over on January 1, 2024.
In its post-earnings breakdown of the report, Bank of America said that given continued easy traffic comparisons, it expects the better trends to persist in coming quarters. "Longer term, we believe these strategies – along with a measured approach to new market development – should stabilize/improve new unit AUVs," noted analyst Sara Senatore. Meanwhile, Stifel analyst Christopher O'Cull noted the sequential traffic and margin improvement were positives, and the decision to open locations farther apart to reduce cannibalization was seen as strategic.
Dutch Bros ( BROS ) rallied to its highest level since late February on Wednesday.
More on Dutch Bros:
- Dutch Bros earnings call transcript
- Growth metrics on Dutch Bros
- Valuation metrics on Dutch Bros
- Seeking Alpha's Quant Rating for Dutch Bros
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Dutch Bros jets to five-month high after earnings, CEO announcement