The drive-thru coffee chain achieved 33% sales growth during the period, alongside improved profitability and sustained outlet growth
Dutch Bros opened 39 new stores in the third quarter, including its first outlets in Alabama and Kentucky | Photo credit: Dutch Bros
Oregon-based Dutch Bros has posted record third quarter revenues and remains confident on achieving full-year sales and outlet growth targets.
The drive-thru coffee chain achieved 33% year-on-year sales growth in the three months ended 30 September 2023 to reach $264.5m, with nearly 72% of revenues generated from company-operated stores.
High costs associated with Dutch Bros’ rapid outlet expansion contributed to annual net losses in 2021 and 2022, however, the coffee chain appears on track to achieve full-year profitability this year. Net income increased 38% on the previous quarter to reach $13.4m – its third consecutive quarterly profit during 2023.
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Dutch Bros opened 39 new stores in the third quarter, including its first outlets in Alabama and Kentucky, to reach 794 outlets across 14 US states.
The coffee chain, which has since reached 800 outlets following a wave of new store openings in the first few weeks of October 2023, opened 122 new stores in the first nine months of the year and plans to open at least another 28 before the year ends.
“By all accounts, Q3 was a fantastic quarter, and we are extremely pleased with our unit openings, same shop sales, revenue, and profitability results. I am encouraged by the strength of the underlying business as we execute on our plan. Even as we demonstrate our commitment to profitable growth, it is vital that we continue investing in the business. Our focus will therefore remain on recruiting and retaining top talent and keeping our operations efficient and competitive long-term,” said Joth Ricci, CEO, Dutch Bros.
Dutch Bros also completed a follow-on public offering of its stock during its third quarter, raising approximately $330m. Ricci said the follow-on equity offering, coupled with an upgrade of its credit facility, unlocked almost $500m in incremental liquidity which positions the coffee chain’s balance sheet ‘to support a long runway of growth’.
“We intend to continue confidently pursuing high-quality investments in new shops on our path to 4,000,” he added.
Dutch Bros, which will be led by current President Christine Barone from 1 January 2024, forecasts its full-year revenues will exceed $950m.