Dutch Bros Inc. Q4 FY2024 earnings call

• Revenue growth in 2024 was 33%, driven by 18% new shop growth (151 new shops) and 5.3% system same-shop sales growth. - Adjusted EBITDA grew 44% in 2024 due to strength in 4-wall P&L and adjusted SG&A leverage. - Q4 2024 highlights: 6.9% system same-shop sales growth, largest quarterly transaction growth since 2022, first full quarter of mobile order, return of holiday LTOs (Candy Cane Mocha and Hazelnut Truffle Mocha) with strong performance. - People and culture: Over 450 regional operator candidates, improved shop level turnover, Investor Day on March 27, 2025 planned. - Real estate: 32 new shops opened in Q4, 151 new shops in 2024, strong pipeline for 2025. - Transaction growth: Enhanced innovation, paid advertising, and Dutch Rewards program (71% transactions from members). Mobile order adoption: 96% system shops with mobile order, 8% channel mix. Food test: Initial test in 8 shops with encouraging signs.

In 2024, Dutch Bros achieved 33% total revenue growth, with $1.28 billion in revenue. Adjusted EBITDA grew 44% in 2024. For Q4 2024, revenue was $343 million, up 35% YoY. System same-shop sales growth in 2024 was 5.3%, and Q4 2024 saw 6.9% system same-shop sales growth. Company-operated same-shop sales growth in Q4 2024 was 9.5%. Adjusted EBITDA in Q4 2024 was $49 million, up 41% YoY. System AUVs were $2 million. Revenue contribution from new shops was significant, with 151 new shops opened in 2024, driving 18% new shop growth.

• Total revenues projected $1.555B-$1.575B (21%-23% growth YoY). - Expect to open at least 160 new shops (16% system growth). - System same-shop sales growth estimated 2%-4% for 2025. - CapEx estimated $240M-$260M. - Adjusted EBITDA projected $265M-$275M (15%-20% growth YoY), with ~150 basis points adjusted EBITDA margin impact from coffee costs and ~80 basis points adjusted SG&A leverage.

• Coffee price volatility: Expected 110 basis point COGS margin pressure in 2025, accelerating through the year. - Construction/development delays: Managed by maintaining a larger development pipeline than planned openings. - Advertising/marketing returns: Ensuring targeted investments deliver expected ROI.

Q: David Tarantino from Baird on company-operated comps.

A: Christine Barone and Josh Guenser discuss factors like Rewards program, paid advertising, mobile order, and innovation contributing to comp growth.

Q: Dennis Geiger from UBS on throughput and mobile incrementality.

A: Christine Barone talks about throughput improvements from mobile order and incrementality from Dutch Rewards, new members, and throughput.

Q: Chris O'Cull from Stifel on CapEx and lease impact.

A: Josh Guenser discusses shifting to build-to-suit leases to lower per unit CapEx and impact on margins.

Q: Andy Barish from Jefferies on new store openings.

A: Christine Barone explains shifting new store openings to back half of 2025 due to market planning efforts.

Q: Andrew Charles from TD Cowen & Company on same-shop sales guidance.

A: Josh Guenser explains factors like price roll-off, Q1 lap, and momentum seen driving 2%-4% same-shop sales growth.

Q: Sara Senatore from Bank of America on pricing and new unit productivity.

A: Josh Guenser confirms 3 points of price roll-off in 2025, and Christine Barone discusses strong new shop productivity and Florida market reception.

Q: Jeffrey Bernstein from Barclays on unit pipeline and coffee costs.

A: Christine Barone talks about unit pipeline mix and Josh Guenser discusses coffee price volatility impact on margins.

Q: John Ivankoe from JPMorgan on paid media in mature markets.

A: Christine Barone and Josh Guenser discuss targeted digital marketing and consistent advertising spend.

Q: Gregory Francfort from Guggenheim Securities on new store comps.

A: Josh Guenser discusses waterfall effect of new stores on comps and Christine Barone mentions Investor Day details on newer markets.

Q: Jeff Farmer from Gordon Haskett on comp growth drivers and discounting.

A: Christine Barone discusses transaction growth drivers, discount pullback, and new shop tailwind.

Q: Nick Setyan from Wedbush Securities on COGS beyond coffee.

A: Josh Guenser discusses overall COGS impact including coffee and other commodities.

Q: Sharon Zackfia from William Blair on development delays and mobile journey.

A: Christine Barone talks about managing development delays with larger pipeline and mobile journey focus on operations and steady growth.