Could Dutch Bros Be a Millionaire-Maker Stock?

Core Viewpoint - Dutch Bros is positioned as a potential major player in the coffee industry, with opportunities to replicate the success of Starbucks, which has seen a nearly 12,000% gain since its IPO [1] Group 1: Successful Concept and Growth Potential - Dutch Bros has demonstrated strong same-store sales growth over the past year, with increases of 5%, 10%, 4.1%, and 2.7% in the last four quarters, despite densifying its store base [3] - The company has begun implementing mobile ordering in about 90% of its locations, which has resulted in a 5% increase in customer frequency [4] - Currently, food sales account for only 2% of total sales, but Dutch Bros is testing an expanded food menu, aiming to increase this percentage, similar to Starbucks' 23% [5] Group 2: Financial Performance and Expansion Opportunities - Dutch Bros has a strong restaurant-level margin of 29.5%, indicating solid profitability per location [6] - With only 950 stores across 18 states, Dutch Bros has significant room for expansion compared to Starbucks, which had over 11,161 locations in North America alone [7] - The cost to open a new Dutch Bros store ranges from $635,000 to$1.5 million, with attractive year-two cash-on-cash returns between 35% and 75%, suggesting a payback period of about three years [9] Group 3: Future Growth Strategy - The company plans to open at least 160 new stores this year and aims for a total of 4,000 locations within the next 10 to 15 years [10] - Dutch Bros trades at a forward price-to-sales multiple of 3.6, higher than Starbucks' 2.7, but has a longer growth runway [11] - If Dutch Bros can quadruple its store base in the next decade, it could see significant stock upside, with average unit volumes expected to grow alongside food and online ordering [12]