Dutch Bros initiated with an Outperform at CICC
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Yahoo
3 hours ago
- Yahoo
Dutch Bros (BROS) Stock Drops Despite Market Gains: Important Facts to Note
In the latest trading session, Dutch Bros (BROS) closed at $66.05, marking a -1.56% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 0.48%. Elsewhere, the Dow lost 0.02%, while the tech-heavy Nasdaq added 0.94%. Shares of the drive-thru coffee chain operator and franchisor have depreciated by 5.23% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 3.33%, and the S&P 500's gain of 5.13%. Analysts and investors alike will be keeping a close eye on the performance of Dutch Bros in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.18, reflecting a 5.26% decrease from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $401.06 million, indicating a 23.43% upward movement from the same quarter last year. Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.59 per share and revenue of $1.58 billion. These totals would mark changes of +20.41% and +23.35%, respectively, from last year. It is also important to note the recent changes to analyst estimates for Dutch Bros. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability. Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model. The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.52% lower. As of now, Dutch Bros holds a Zacks Rank of #3 (Hold). Investors should also note Dutch Bros's current valuation metrics, including its Forward P/E ratio of 112.91. This signifies a premium in comparison to the average Forward P/E of 22.63 for its industry. Investors should also note that BROS has a PEG ratio of 3.49 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.6 based on yesterday's closing prices. The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 91, which puts it in the top 37% of all 250+ industries. The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Be sure to use to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dutch Bros Inc. (BROS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Bloomberg
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Fast Company
19 hours ago
- Fast Company
China's Luckin Coffee is the anti-Starbucks. Will it work in the U.S.?
China's biggest coffee chain just opened stores in the U.S. for the first time. Its business model is the antithesis of Starbucks 's 'back to basics' plan. Luckin Coffee has dominated the java-slinging business in its home country, where it overtook Starbucks as the largest coffee chain both by total sales and number of locations back in 2023. Now it's setting its sights on the U.S., with its first retail stores officially open in New York City. Luckin's rapid growth is a product of what it calls its 'technology-driven retail model.' At most locations, the company operates without any cashiers, instead taking orders entirely through its popular mobile app—a strategy that prioritizes convenience and speed above all else. It's a structure that's almost the direct opposite of the new business model at Starbucks under CEO Brian Niccol, which emphasizes human interaction and personalized touches as a core part of the coffee-drinking experience. What is Luckin Coffee? For American consumers, Luckin's offerings are perhaps most comparable to those of Dutch Bros., covering a wide range of beverages, from specialty lattes and teas to refreshers, matcha, and a series of fruity Americanos. The prices are typically about 30% less than a Starbucks alternative. In a highly saturated American beverage market that's constantly vying to identify the next Gen Z drink craze, Luckin's menu isn't exactly reinventing the wheel. However, its business model does represent a coffee shop experience that no American brand has yet to fully emulate. According to an analysis by the University of Pennsylvania's Wharton School, Luckin Coffee's founder, Jenny Qian, pulled inspiration for the shop's retail model from popular ride-hailing services. Virtually all the company's transactions are cashless, given that the entire ordering and payment process is handled through the brand's app—similar to the way one might order an Uber or Lyft. While American brands like Dunkin', Dutch Bros., and Starbucks all have their own apps and mobile-ordering functions, none has made the plunge into a fully mobile-first strategy. 'We advocate a more convenient and rapid 'new retail' experience,' Luckin's website reads. 'Users can purchase, pick up and take out coffee through our mobile app, completely changing the traditional coffee business mode[l].' Luckin's simplified sales approach lent itself to an astronomical pace of growth. From January 2018 to March 2019, Wharton's analysis notes, Qian and her team opened an average of 5.2 stores per day. The brand's success was significant enough that in May 2019 Luckin made its first play at a U.S. presence by filing for an initial public offering. Just a year later, though, a U.S. Securities and Exchange Commission investigation revealed that the company's earning reports had been artificially inflated, causing Luckin to delist from the Nasdaq and fire Qian and six other executives involved in the scheme. In 2021, the company also filed for bankruptcy to recover from the $180 million in fines accrued during the legal proceedings. Six years later, Luckin's new leadership team has pulled off an impressive financial turnaround. Per Luckin's first-quarter 2025 financial report, the brand now boasts more than 24,000 locations, primarily across China, Malaysia, and Singapore (Starbucks operates roughly 40,000 locations globally and about 8,000 in China). Luckin also notched $1.2 billion in net revenue during the three months ending on March 31—a 41.2% year-over-year increase. Meanwhile, Starbucks's sales in the region have stalled, with same-store sales down 8% in fiscal year 2024. Due to New York's prohibition on cashless businesses, it's likely that Luckin's first two stores are operating under some combination of app and in-person orders. The brand did not immediately respond to Fast Company 's request for clarification on the stores' operations, or whether Luckin plans to expand its mobile app model to other states in the U.S. At the same time that Luckin is perfecting its efficiency-first, in-and-out structure, Starbucks is working on backtracking to its former glory as a human-centric third place. Since Niccol took the helm at Starbucks back in September 2024, he's been working to address the brand's image problems—a result of higher costs, longer wait times, and waning sales—with a plan he calls 'Back to Starbucks.' In an interview with Fast Company earlier this year, Niccol shared that he believed Starbucks had veered off course as a business during the mobile-ordering era of the pandemic. 'I think it just really took a lot of the soul out of what this business is all about,' Niccol said. To recapture Starbuck's original 'magic' as a sit-down coffeehouse, Niccol has been working on bringing back human touches like handwritten notes, warm, familiar ads, and a simplified menu that emphasizes coffee quality over beverage trend-chasing. So far, it's clear that the turnaround won't happen overnight: In April, Starbucks reported financial results that even Niccol called 'disappointing,' with revenue and same-store sales falling below investor predictions. While Starbucks de-emphasizes its mobile-ordering features, Luckin's entire business model revolves around them. Even the two companies' branding seems to underscore their opposing strategies: Starbucks embraces a warm aesthetic through its iconic dark green siren logo and color-graded advertising, while Luckin's bright blue branding and stag logo feel more reminiscent of a tech company or bank than a coffee shop. Luckin's entrance into the American market is poised to offer a case study in whether Niccol's thesis around the importance of the coffee shop as third place holds true. Or perhaps what consumers really care about is how quickly they can pick up their iced matcha.
