Shares of drive-thru coffee shop Dutch Bros (BROS) rocketed 24% high in after-hours trading following an earnings report that handily surpassed Wall Street expectations.
The fast-growing coffee shop recently opened its 1,000th store as it expands its footprint through a strategy known as “fortressing” that floods a market with store to gain mindshare and make marketing more cost-effective.
BROS stock is up 53% year-to-date, including the after-hours gains, and has nearly tripled over the past year.
Dutch Bros is the third largest coffee chain behind Starbucks (SBUX) and Dunkin. Revenue for the quarter surged 35% year-over-year and was 1% higher sequentially as same store sales jumped 6.9%
The quarter represented the coffee chain's first full year with mobile ordering and it has grown in popularity with consumers, helping to deliver comparable transaction volume 2.3% higher. That's the highest level Dutch Bros has achieved in two years.
The earnings beat was the seventh consecutive quarter Dutch Bros topped analyst estimates.
President and CEO Christine Barone said the drive-thru coffee shop would further ramp up its mobile ordering capabilities in 2025, and looking further out, expected to expand its food offerings.
"We believe these efforts are contributing to current momentum and that there is considerable runway for further growth," Barone said in a statement.
Dutch Bros success has increased as it leaned into fortressing. It is a strategy popularized by the pizza chain Domino's (DPZ), which opens up more stores in an established market as well as entering new ones.
