Shares of Starbucks have dipped over 20% in the past year, while Dutch Bros is on the rise, trading up 35% in the same period. Dutch Bros, founded in Oregon, operates with a unique model—small drive-thru-focused locations that ensure quick service. The company has seen impressive growth, with same-store sales up 10% last quarter, contrasting Starbucks' 4% decline. Dutch Bros' Q1 sales soared nearly 40% year-over-year to $275.1 million, with profitability metrics like adjusted EBITDA growing 120%. Currently, Dutch Bros has 876 locations in 17 states and plans to expand to 4,000 locations over the next 10-15 years. They recently introduced a mobile ordering app, aiming for full rollout by year-end. Despite trading at a higher forward P/E ratio than Starbucks, Dutch Bros shows promise with significant room for expansion and higher earnings growth potential. While it carries some risks due to ongoing expansions, Dutch Bros presents a compelling long-term investment opportunity.
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