BROS Stock: Why Is Dutch Bros Brewing Up Gains Today?

Looking into a new year, so far much of what we are seeing involves the rapidly spreading omicron variant. As cases continue to rise throughout the U.S. and beyond, businesses have been forced to adapt to restrictions and safety precautions once again. For companies who are not dependent on dining in, though, the current outlook looks less bleak. To that end, Dutch Bros (NYSE:BROS) has enjoyed an overall good year since its September initial public offering (IPO).

Dutch Brothers (BROS) at Papago Plaza in Scottsdale Arizona.
Source: RicoPatagonia / Shutterstock.com

This retail coffee innovator has a somewhat unique business model, serving customers exclusively through its drive-thru. If recent reports are any indication, that has served BROS stock quite well in the months following the IPO.

Here’s what you should know about Dutch Bros moving forward.

What’s Happening with BROS Stock

This week began with Dutch Bros reporting its preliminary development and same shop sales results for the fourth fiscal quarter and full-year 2021. Looking at the numbers, it’s not hard to see why BROS stock is up today. The company reported growth of roughly 10% for the final earnings quarter and more than 8% for the year. On a two-year basis, system same shop sales grew by more than 15%. Finally, growth for company-operated same shop sales for the same time frame was more than 17%.

As can be expected from such positive numbers, BROS stock has been rising steadily. As of this writing, it’s up more than 5% for the day. While shares remain in the red for the week, BROS stock is up more than 36% since its public debut.

Why It Matters

This week’s reports also revealed exactly why Dutch Bros is one of the fastest-growing chains in the food service sector. The company is heading into 2022 with 98 new shops, 82 of which are company-operated. This expansion has allowed it to tap into the retail coffee markets in three new states: Texas, Kansas and Oklahoma. Dutch Bros ended the year with holdings that consisted of 538 coffee shops spanning 12 states. Of those franchises, 271 are company-operated.

With this type of sales growth and plans to continue scaling operations, it’s not hard to see the potential of BROS stock. The surging omicron variant has caused many investors to search for pandemic-proof stocks. While Dutch Bros isn’t often placed on lists of such stocks, maybe it should be. The company is poised for growth in 2022 and even if Covid-19 cases continue to rise, Americans will still need their coffee.

In a recently issued statement, President and CEO Joth Ricci even noted that Dutch Bros did not experience any significant staffing shortages in the fourth quarter. Remember the staffing shortage that plagued rival Starbucks (NASDAQ:SBUX) throughout the fall season? It drove baristas to unionize.

What It Means

These are all reasons to keep an eye on Dutch Bros as the company gears up for an even bigger year than the last one. A few months ago, InvestorPlace contributor David Moadel predicted that the company could evolve into a national brand. Since then, BROS stock has actually come down, giving investors the opportunity to buy in on a dip before it takes off in 2022.

This was a breakout stock of late 2021 and is poised to grow even more in the year ahead. If you’re considering a bullish play on the food service sector, BROS stock should be at the top of your list.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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