Oregon drive-thru coffee chain Dutch Bros said Monday it expects sales will approach $1 billion this year as the company accelerates the pace of new store openings.
“In 2023, we’re targeting 150 new shops, which positions us to achieve our five-year goal of 800 systemwide shops by year-end,” CEO Joth Ricci said in a written statement.
Dutch Bros said it expects revenue will grow by about 20% annually over the next five to 10 years. That’s slower than in recent years, when growth has topped 35% — and was sometimes as high as 50% — but still represents an ambitious long-term target. The company said one measure of profitability will outpace its sales growth.
Dutch Bros announced the new targets and some preliminary financial results early Monday, ahead of its participation in a series of investor conferences this month.
The chain didn’t report last year’s sales or profits Monday, but Dutch Bros said it finished 2022 with 671 shops in 14 states. It had been targeting more than $700 million in revenue for 2022 and it expects at least $950 million in revenue in the coming year.
The Grants Pass company said sales in stores open for at least 15 months declined 0.6% in the fourth quarter compared to a year earlier. That reflects the impact of sales transferred from existing shops to new ones.
Investment analysis had been anticipating a decline of 2% in sales at existing stores, according to Sharon Zackfia, who follows Dutch Bros for William Blair & Co. She reiterated her “outperform” rating on the stock.
Dutch Bros’ shares rose 7.2% ahead of the market opening, to $31.66. The stock has traded between $20.05 and $66 in the past year, a wide range reflecting the impact of inflation on the company and investor uncertainty about the national economy and consumer demand.
Founded in Grants Pass in 1992, Dutch Bros sells energy drinks, coffee and other beverages at kiosks throughout the West Coast and Southwest. Dutch Bros’ initial public offering in 2021 was the biggest in state history.
