BUZZ - Coffee chain Dutch Bros shares fall due to weak sales outlook

November 5 - ** Shares of coffee chain Dutch Bros (BROS.N) fell 21.1% on Thursday to $34.69, hitting a two-year low after the company issued short-term sales guidance that fell below expectations.

** BROS shares are heading for their biggest one-day drop since May 12, 2022; the decline comes amid a broad sell-off in the stock market (link).

** The Arizona-based company said late Wednesday (link) that third-quarter revenue rose about 30% year-on-year to $549.8 million, slightly above LSEG’s estimate of $547.4 million.

** The company said same-store sales (SSS) were up 5.4% in the third quarter, driven by increased customer traffic.

** At least nine brokerages have lowered their target prices, with analysts noting the firm reduced its 2026 same-store sales growth outlook to at least 5% from the previous 5%-6% range.

** TD Cowen, which rates BROS “Buy,” said management performed well on the earnings call, making a strong case that the revised guidance was driven more by cyclical factors (high oil prices and inflation) rather than structural ones (competition).

** Of 26 brokerages covering the stock, 25 rate it “Strong Buy” or “Buy” and one rates it “Hold”; the median price target is $55, down from $77 a month ago.

** As a result, shares are down 43% so far this year.

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