Dutch Bros(BROS) - 2024 Q1 - Quarterly Report

Financial Performance - Company-operated shop revenues for the three months ended March 31, 2024, were $248.1 million, up 43.2% from$ 173.2 million in the same period last year[416] - Total revenues for the three months ended March 31, 2024, were $275,099,000, a 39.4% increase from$ 197,267,000 in the same period last year[442] - Income before income taxes for the three months ended March 31, 2024, was $24,987,000, compared to a loss of$ 6,811,000 in the prior year[442] - Other income for the three months ended March 31, 2024, was $5,801,000, significantly higher than$ 1,307,000 in the previous year[442] Operational Growth - As of March 31, 2024, the company operated 641 systemwide shops, an increase from 503 in the same period last year, representing a growth of 27.5%[414] - Segment contribution from company-operated shops was $73,999,000, up from$ 41,873,000, reflecting a significant increase in profitability[442] Cost Management - The gross profit from company-operated shops was $54.3 million, which is 21.9% of revenues, compared to$ 28.9 million or 16.7% of revenues in the prior year[416] - Beverage, food, and packaging costs accounted for 25.7% of revenues in Q1 2024, down from 28.3% in Q1 2023, indicating improved cost management[416] - Labor costs increased to $65.4 million, representing 26.4% of revenues, compared to 28.0% in the same period last year[416] - Total cost of sales increased to$ 203,326,000 from $151,523,000, indicating a rise of 34.2% year-over-year[442] - The company has adjusted its menu prices to offset rising costs of key operating resources, including dairy, coffee, and fuel, which have been impacted by inflation[545] - Labor costs have been affected by increases in minimum wage requirements, which may impact overall operating results in the future[546] - The company is facing current commodity inflation and anticipates that these pressures will continue to affect operating results[546] Financial Position - As of March 31, 2024, the company had$ 244.1 million outstanding under its term loan facility, with potential for additional debt subject to restrictions[418] - The total depreciation and amortization for the three months ended March 31, 2024, was $20,989,000, compared to$ 14,362,000 in the same period last year[442] Customer Engagement - The Dutch Rewards program, launched in February 2021, is a key indicator of customer loyalty and future promotional plans[414] Economic Challenges - The company is facing challenges related to economic conditions, including inflation and consumer discretionary spending, which may impact future sales and profitability[429] Internal Controls - The company has not experienced any material changes in internal control over financial reporting during the three months ended March 31, 2024[548]