Dutch Bros Inc. Reports First Quarter 2023 Financial Results
GRANTS PASS, Ore.–(BUSINESS WIRE)– Dutch Bros Inc. (NYSE: BROS; “Dutch Bros” or the “Company”) one of the fastest-growing brands in the food service and restaurant industry in the United States by location count, today reported financial results for the first quarter ended March 31, 2023.
Joth Ricci, Chief Executive Officer of Dutch Bros, stated, “In Q1, we opened a record 45 shops system-wide and grew revenue almost 30%. We also saw meaningful margin expansion, driven by significant improvements in labor efficiency and G&A leverage. We doubled down in our pursuit of more profitable growth and delivered strong company-operated shop margins. I’m proud of how our teams responded quickly and decisively to the economic climate, demonstrated by their focused effort on accelerating profitability as we grow our shop footprint.”
He continued, “During the quarter, we were encouraged by our customers’ responses to our traffic-driving initiatives, including our “Fill-a-Tray” promotion, which resulted in the largest single sales day in Dutch Bros recorded history. We will continue to utilize innovative strategies to generate traffic demand and build momentum.”
He concluded, “Our new shops are highly efficient, mature quickly, and continue to demonstrate predictable and attractive margin profiles. The class of shops opened in 2019, 2020, and 2021 have already achieved our 30% contribution margin target, and the class of 2022 is maturing in line with our margin expectations. We are hitting these targets as we continue entering new trade zones across the country. This performance gives us confidence in Dutch Bros growth strategy – both in the near-term and beyond.”
First Quarter 2023 Highlights
Opened 45 new shops, 42 of which were company-operated, across 9 states. All of these new shops continue to be led by existing or newly-promoted regional operators.
Total revenues grew 29.6% to $197.3 million as compared to $152.2 million in the same period of 2022.
System same shop sales2 declined (2.0)%, inclusive of the impact of our fortressing strategy, which results in sales being transferred from existing shops to new ones, as compared to the same period in 2022. Company-operated same shop sales declined (3.5)%, inclusive of the impact of our fortressing strategy, as compared to the same period of 2022.
Company-operated shop revenues increased 33.0% to $173.2 million, as compared to $130.2 million in the same period of 2022.
Company-operated shop gross profit was $28.9 million as compared to $16.6 million in the same period of 2022. In the first quarter of 2023, company-operated shop gross margin, which includes 190bps of pre-opening expenses improved to 16.7%, a year-over-year increase of 390bps.
Company-operated shop contribution1, a non-GAAP financial measure, grew 76.1% to $41.9 million as compared to $23.8 million in the same period of 2022. In the first quarter of 2023, company-operated shop contribution margin, which includes 190bps of pre-opening expense, improved to 24.2%, a year-over-year increase of 590 bps.
Selling, general, and administrative expenses were $46.0 million (23.3% of revenue) as compared to $45.2 million (29.7% of revenue) in the same period of 2022.
Adjusted selling, general, and administrative expenses1, a non-GAAP financial measure, were $36.7 million (18.6% of revenue) as compared to $31.7 million (20.8% of revenue) in the same period of 2022.
Net loss was $9.4 million as compared to $16.3 million in the same period of 2022.
Adjusted EBITDA1, a non-GAAP financial measure, grew 147.2% to $23.9 million as compared to $9.7 million in the same period of 2022.
Adjusted net loss1, a non-GAAP financial measure, was $0.5 million as compared to $2.5 million in the same period of 2022.
Net loss per share of Class A and Class D common stock – diluted was $0.07 as compared to net loss per share of $0.10 in the same period of 2022.
Adjusted net loss per fully exchanged share of diluted common stock1, a non-GAAP financial measure, was $0.00 as compared to $0.02 in the same period of 2022.
Dutch Bros is reaffirming the following full-year 2023 outlook:
Total system shop openings in 2023 are expected to be at least 150, of which at least 130 shops will be company-operated.
Total revenues are projected to be between $950 million and $1 billion.
Same shop sales2growth is estimated to be in the low single digits. At this point we have no plans to take additional pricing action in 2023. We expect low-single digits growth from pricing to roll-over into 2023 from pricing action taken in 2022.
Adjusted EBITDA3 is estimated to be approximately $125 million. This includes approximately $8 million we elected to make in labor investments related to wage increases in federal minimum wage markets and approximately $11 million in mandated wage increases in markets that do not adhere to the federal minimum wage standard.
Capital expenditures are estimated to be in the range of $225 million to $250 million, which includes approximately $15 million to $20 million in spending in 2023 for our new roasting facility projected to open in 2024.
By Press Release – 05/09/2023