Dutch Brothers Of a corporation
Thursday’s share price plummeted to new lows after the company warned that sales growth would slow as young customers move away from the afternoon coffee break due to inflation.
Wednesday’s drive-through coffee chain leveled off year-to-year from previous belief that same-store sales (a key industry indicator that reflects sales where it’s been open for at least 15 months) will rise in the medium term He said he expected it to be. 1-digit percentage range.
The company’s view declined as it reported a loss of $ 4.9 million in the first quarter. Rising dairy prices and rising inflation, which squeezed margins, were the main causes of the reduction in disposable income.
Joss Rich, CEO of Dutch Brothers, said rising prices have had a significant impact on young consumers. Rich said the company plans to expand its energy drink offerings and emphasize reward programs to bring back young crowds.
“I continue to think that is our greatest opportunity as a segment,” Rich said.
Based in Oregon, the company sells coffee and energy drinks primarily in the western half of the United States. After opening 34 stores in the first quarter, it will be close to 600 stores as of March 31, with the goal of opening at least 4,000 stores over the next 10 years. Up to 15 years.
The added stores helped increase first-quarter revenue by 54%, as same-store sales increased by 6%.
Dutch Bros was released in September for $ 23 per share. Shares have soared to $ 80, but have fallen by more than 53% since the beginning of the year. After falling below the IPO price before, it fell 31% to $ 23.57 around noon.
Dutch Bros reported a loss of $ 4.9 million, or 10 cents per share, due to the company in the first quarter. This is broader than the year-on-year and analyst average estimates.
In addition to a 25% rise in dairy prices, the company said earnings were hit by rising minimum wages in some markets and other costs associated with growth.
Revenue was $ 152.2 million, surpassing analysts’ expectations of $ 146 million.
On Wednesday, Dutch Brothers upheld plans to open at least 130 stores this year. They lowered the lower limit of interest, taxes, depreciation and pre-amortization expected adjusted profits from $ 115 million in the previous guidance to $ 90 million, reflecting margin pressure and price increase decisions. ..
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Dutch Brothers shares hit new lows as inflation keeps young consumers away
Source link Dutch Brothers shares hit new lows as inflation keeps young consumers away