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Dutch Bros Stock Plunges as Earnings Guidance Is Slashed

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Maranie Staab/Bloomberg

Shares of


Dutch Bros

were plunging Thursday after the coffee chain lowered its forecast for adjusted Ebitda in 2022.

Dutch Bros (ticker: BROS) said it expects adjusted Ebitda, or earnings before interest, taxes, depreciation, and amortization, of at least $90 million, down from its previous forecast of $115 million to $120 million, “reflecting near-term margin pressure in our company-operated shops and our decision to take modest price increases during the year.”

The company said it still expects revenue for the year of $700 million to $715 million, but added that same-store sales growth would be about flat vs. previous guidance of gains in the mid-single digits.

“We were not immune to the record inflation that surpassed our expectations and pressured margins in our company-operated shops,” said Chief Executive Joth Ricci said in a statement. “While we believe these margin impacts may be short-term, we have opted to take a more conservative stance regarding adjusted Ebitda for 2022 as we monitor our pricing and the escalating cost environment.”

The stock was falling 37.8% to $21.37 on Thursday. It has declined 58% year to date.

Dutch Bros went public last September at $23 a share.

Analysts at Stifel downgraded Dutch Bros shares to Hold from Buy, and lowered the price target to $30 from $70.

Stifel said its downgrade was based “on the lack of margin visibility.”

Stifel said it was unclear as to why Dutch Bros lowered its forecast for same-store sales, and added that the weaker same-store performance “increases the risk of raising menu prices to combat margin pressure.”

The company reported a first-quarter adjusted loss of 2 cents a share. Analysts were looking for earnings of 1 cent.

Write to Joe Woelfel at joseph.woelfel@barrons.com

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