It has become a phenomenon reminiscent of the early days of Starbucks (SBUX). Motley Fool has boldly claimed that the up-and-coming coffee shop franchise is “the next big one,” as it offers a similar playbook to Starbucks.
A Motley Fool analyst pointed out that Dutch Brothers is building customer loyalty and appealing to next-gen customers by enticing them with products like Iced Tiger’s Blood Lemonade or Iced Electric Berry Rebel — drinks with caffeine, colorful names and flashy looks.
BROS already has 2.3 million active accounts in its mobile app, which was launched only a year ago. Its drive-thru business model is working well during the never-ending pandemic. Same-store sales grew by 7.3% in the past year. Total revenue climbed by 50% to $130 million in the third quarter.
BROS’s management plans to expand rapidly from the company’s current 503 locations in the West and the South to 4,000 locations across the country.
Dutch Bros. may already be profitable. Prior to the initial public offering (IPO), it was making money. It reported a loss of $117 million in the third quarter of 2021, largely due to the additional costs of going public.
While the stock came out in the low $40s, it surged to over $70 in a matter of days. Then, it briefly fell below $40. The stock has excellent long-term potential. So let’s add Dutch Bros. to our speculative portfolio.