Dutch Bros (BROS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $324.9 million, up 30% year-over-year, with net income of $22.2 million and diluted EPS of $0.12.

• Opened 36 new shops in Q2, surpassing 900 total locations, a 21% increase from the prior year.

• Adjusted EBITDA was $65.2 million, up from $48.6 million, with margin improving to 20.1%.

• Innovations like Boba, Protein Milk, and a robust Dutch Rewards program (67% transaction penetration) drove customer engagement and digital engagement.

• Leadership transitions, support center expansion in Arizona, and large-scale organizational realignment are progressing smoothly.

Financial highlights

• Company-operated shop revenue grew 33.6% to $295.3 million; contribution margin reached 30.8%, up 50bps year-over-year.

• Net income increased to $22.2 million from $9.7 million year-over-year; adjusted net income was $31.2 million.

• Company-operated shop gross margin was 23.7%; systemwide same shop sales grew 4.1% year-over-year.

• Adjusted SG&A was 14.6% of revenue, down from 15.6% in Q2 2023.

• Cash and cash equivalents rose to $260.9 million as of June 30, 2024.

Outlook and guidance

• 2024 revenue guidance raised to $1.215–$1.230 billion; adjusted EBITDA guidance increased to $200–$210 million.

• Adjusted SG&A expected at $190–$200 million; capital expenditures projected at $270–$290 million.

• Total system shop openings for 2024 expected at the lower end of 150–165.

• Same shop sales growth for 2024 projected in the low single digits.

• Management expects continued pressure from inflation and minimum wage increases, particularly in California.