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Dutch Bros Inc. (BROS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered strong topline and traffic: revenue rose 34.9% to $342.8M, system same shop sales grew 6.9% (transactions +2.3%), and company-operated comps were +9.5% (transactions +5.2%) .
  • Profitability mixed: adjusted EBITDA grew 41% to $48.8M, but company-operated gross margin (21.4%) and contribution margin (28.9%) declined sequentially vs Q3 as mix/seasonality lifted SG&A to 18.8% of revenue .
  • Structural momentum from mobile order and loyalty: Rewards drove 70.6% of transactions and mobile order reached ~8% of sales; management cited both as traffic catalysts in Q4 .
  • 2025 guide embeds coffee headwinds: revenue $1.555–$1.575B, same-shop sales +2–4%, adjusted EBITDA $265–$275M; management expects ~110 bps COGS pressure from coffee and ~150 bps adjusted EBITDA margin drag, partly offset by ~80 bps SG&A leverage .
  • Stock catalysts: accelerating comps/traffic and mobile order ramp vs. near-term gross margin pressure from coffee and higher rent from more build-to-suit leases; unit growth remains the primary revenue driver (≥160 openings in 2025) .

What Went Well and What Went Wrong

What Went Well

  • Sustained growth and traffic momentum: “We drove an impressive 35% revenue growth and system same shop sales growth of 6.9%,” with the “largest year-over-year [transaction] increase in over two years” . Management added, “Momentum in the business is strong” .
  • Loyalty and mobile order traction: Rewards transactions hit a record 71% (70.6% reported) with ~5.4M mobile orders; ~96% of system enabled mobile order and it accounted for ~8% of channel mix, aiding morning throughput and traffic .
  • Unit economics: Q4 company-operated shop contribution margin was 28.9% (up 240 bps YoY) with contribution dollars +51% YoY, reflecting strong four-wall performance and leverage on occupancy/other costs .

What Went Wrong

  • Sequential margin pressure and higher SG&A: Company-operated gross margin stepped down to 21.4% (Q3: 22.2%) and contribution margin to 28.9% (Q3: 29.5%); adjusted SG&A rose to 18.8% of revenue from 14.9% in Q3 as marketing and people investments elevated overhead .
  • Coffee commodity headwinds into 2025: Management expects ~110 bps net COGS pressure at company level and ~150 bps adjusted EBITDA margin impact if coffee holds ~$4/lb, with impacts beginning in Q1 and increasing in Q2 .
  • Leasing mix to increase rent burden: Shifting toward more build-to-suit leases lowers per-unit cash outlay but carries higher rent, which is contemplated in guidance and may weigh on shop-level margins over time .

Financial Results

Headline metrics by quarter

MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($MM)$324.9 $338.2 $342.8
Net Income ($MM)$22.2 $21.7 $6.4
Diluted EPS (GAAP)$0.12 $0.11 $0.03
Adjusted EBITDA ($MM)$65.2 $63.8 $48.8
Co-Op Gross Margin (%)23.7% 22.2% 21.4%
Co-Op Contribution Margin (%)30.8% 29.5% 28.9%
Adjusted SG&A (% of Rev)14.6% 14.9% 18.8%
System Same Shop Sales (%)4.1% 2.7% 6.9%
Dutch Rewards % of Transactions66.7% 67.2% 70.6%

Segment revenue and contribution

MetricQ2 2024Q3 2024Q4 2024
Co-Operated Shops Revenue ($MM)$295.3 $308.3 $314.2
Franchising & Other Revenue ($MM)$29.7 $29.9 $28.6
Co-Op Shop Contribution ($MM)$91.1 $90.8 $90.9
Franchising & Other Contribution ($MM)$21.3 $22.7 $22.2

KPIs and development

KPIQ2 2024Q3 2024Q4 2024
Shops Opened (Quarter)36 38 32
Total Shops (End of Period)912 950 982
Systemwide AUV (TTM, $)$2.005M $2.004M $2.018M
Mobile Order Penetration (%)N/AN/A~8%
Rewards % of Transactions66.7% 67.2% 70.6%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenuesFY 2025N/A$1.555–$1.575B New
Adjusted EBITDAFY 2025N/A$265–$275M New
Same Shop SalesFY 2025N/A+2% to +4% New
System OpeningsFY 2025N/A≥160 shops New
Capital ExpendituresFY 2025N/A$240–$260M New
Coffee Cost HeadwindFY 2025N/A~110 bps COGS headwind (company), ~150 bps adj. EBITDA margin headwind New
Adjusted SG&A LeverageFY 2025N/A~80 bps leverage assumed New
Q1 Comp ContextQ1 2025N/AToughest comp due to leap day & Bubble launch; guides +2–4% New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 and Q3)Current Period (Q4)Trend
Mobile orderQ2: early pilots; targeted rollout; focus on majority by year-end ; Q3: 90% system / 96% company-operated coverage 96% system enabled; 5.4M mobile orders; ~8% mix; traffic and morning daypart lift Adoption rising; traffic additive
Paid media & loyaltyQ2: 67% Rewards; paid ads driving awareness Rewards at 70.6–71%; segmentation accelerating; paid media aiding new and mature markets Strengthening engagement
Coffee commodityNot highlighted in Q2/Q3~$4/lb assumption; ~110 bps COGS and ~150 bps EBITDA margin headwind in 2025 New headwind
Unit growth & CapExQ2: 36 openings; raised FY outlook; CapEx $270–$290M ; Q3: 38 openings; raised FY24 revenue & Adj. EBITDA 32 openings; 2025 ≥160 openings; shift to build-to-suit to lower upfront cash; ~$1.8M capex per shop in Q4 Pipeline strong; lower cash per unit, higher rent
ThroughputNot a focus in Q2/Q3Deployment and mix shift to walk-up window; mobile order reduces order time; focus on morning throughput Early execution phase
Food testNot discussed in Q2/Q38-shop test; focus on assortment, operations; attach opportunity without hurting throughput Small-scale testing
Pricing/discountingLimited commentary in Q2/Q3Pulled back on discounting in Q4 (added >1 pt); ~3 pts net price roll-off expected in 2025 Value focus; modest 2025 pricing

Management Commentary

  • “We delivered exceptional performance in the fourth quarter… 35% revenue growth and system same shop sales growth of 6.9%... 2.3% system same shop transaction growth, the largest year-over-year increase in over two years.” — CEO Christine Barone .
  • “As of December 31… 96% system and 99% company-operated shops [had] mobile order… ~8% of our channel mix was mobile order… contributed to the traffic outperformance we experienced in Q4.” — CEO Christine Barone .
  • “If current coffee seed price levels are maintained, we would expect approximately 110 bps of net COGS margin pressure in 2025… overall adjusted EBITDA margin impact… about 150 bps.” — CFO Josh Guenser .
  • “We expect to open at least 160 new shops [in 2025]… capital expenditures… $240–$260 million… adjusted EBITDA… $265–$275 million.” — CFO Josh Guenser .

Q&A Highlights

  • Comp drivers and sustainability: Management attributed Q4’s comp acceleration to “everything firing on all cylinders,” including loyalty, paid media, mobile order, and morning daypart strength; new shop maturation also contributed .
  • 2025 comp framework: Full-year +2–4% assumes ~3 pts net price roll-off and tough Q1 compares (leap day & prior promotions) but expects positive traffic; Q1 guided +2–4% as well .
  • Throughput and mobile: Focus on labor deployment and balancing production; mobile order both shortens order time and shifts pick-up to walk-up, aiding throughput .
  • CapEx and leases: Per-unit capex expected to fall as mix shifts to build-to-suit leases (higher rent) in 2025; specifics to be detailed at Investor Day .
  • Discounting and value: Pullback in discounting added “a little bit over 1 point” to the quarter; management will continue to emphasize value via Rewards rather than heavy discounting .

Estimates Context

  • S&P Global consensus data for Q4 2024 revenue, EPS, and EBITDA was unavailable at the time of this request due to a provider limit; as a result, a vs.-consensus analysis could not be completed. We will update this section once S&P Global data becomes available.

Key Takeaways for Investors

  • Momentum improved into year-end: Q4 system comps +6.9% with positive traffic (+2.3%) and company-operated comps +9.5% (+5.2% traffic), suggesting marketing, loyalty, and mobile initiatives are working .
  • Loyalty and mobile order are structural levers: Rewards mix at ~71% and mobile at ~8% of sales support frequency and morning daypart throughput—key to sustaining traffic gains in 2025 .
  • Watch cost/margin headwinds: Coffee prices present a ~110 bps COGS and ~150 bps adjusted EBITDA margin headwind in 2025; management intends to preserve value positioning with only modest pricing .
  • Self-funding path aided by leasing mix: Shift toward build-to-suit reduces upfront capex (~$1.8M per shop in Q4) but increases rent; net impact is included in guidance .
  • Unit growth remains the growth engine: ≥160 openings guided for 2025 with a back-half acceleration; pipeline and market planning focus should support new unit productivity .
  • Near-term setup: Q1 faces the toughest comp; management still sees +2–4% comps, implying underlying traffic resilience despite coffee headwinds .
  • Monitoring list: coffee futures trajectory; mobile order penetration climb; throughput metrics; discounting discipline; build-to-suit rent impact on shop-level margins.

Sources:

  • Q4 2024 8-K earnings release and financials
  • Q4 2024 earnings call transcript (prepared remarks and Q&A)
  • Q3 2024 8-K / press release
  • Q2 2024 press release