Dutch Bros ($BROS) presents their first earnings report as a public company in the next few minutes.
Obviously this isn’t SAAS. But that doesn’t mean it can’t provide SAAS-level returns, IF it can deliver. If it can hit a couple numbers today, I do believe it will portend future success. I’ll post what those numbers are below.
DutchBros operates a chain of 471 drive-thru coffee shops throughout the West Coast (as of June 30, 2021) If we keep this on this Board’s discussion in the future, please don’t comment on the quality of their coffee. Let’s try to keep this based on the numbers.
Here’s what I’d like to see today:
Q3 Same Store Sales growth above 10%. This is aggressive for restaurants, but we need to see that the back-to-work thesis is intact - keep in mind Dutch Bros operates drive-thru kiosks. We need to see that people are buying coffee on their way to work, and if Q3 wasn’t aggressive, then maybe this isn’t worth our time. I wouldn’t accept same store sales to stay in double digits in the future, but I want to see it now. I’d also like to see cohort analyses on each shop based on when they opened. Does the new Texas market behave differently than the older Oregon market? I’d like to see that broken out.
Guidance for new kiosks in 2022 that suggest they’ll build 100+. they are currently on a run rate of around 60 new stores in FY2021, after building more than 70 in 2020. We can’t have them slowing down new store construction 2 years in a row, especially when they have 39 other states to add to their footprint.
Employee turnover. I know I scolded everyone above about not discussing non- quantitative matters, but there is an interesting aspect of Dutch Bros in that people like working there. Labor supply will continue to be tight for the foreseeable future. Keeping employees actually matters these days! There’s sort of a way we can measure this quantitatively: employee turnover. I don’t have an exact figure in mind, but I don’t want to see this metric any higher than others in the industry, for what that’s worth.
Anyway, I do believe this can be the type of company that can grow at greater than 35% per year for the next decade, but let’s see how this first call shakes out to see how it measures up vs our SAAS racehorses.