Episode Details

Dutch Bros Inc. (BROS) Q2 2026 — Q2 2026 (3 months ended June 30, 2026): revenue $550.9M, UP 32.5%, a beat vs ~$525M. Adjusted EPS per fully exchanged diluted share $0.33 vs a $0.29 bar - a 13.9% BEAT. GAAP diluted EPS on Class A stock $0.28 vs $0.20 - a different basis, not the bar. Adjusted EBITDA $113.7M, up 27.8%, but margin FELL 76bps to 20.6%. Guidance RAISED: revenue $2.10-2.13B, adjusted EBITDA $385-390M, capex raised to $350-370M. The 8-K was accepted 4:07pm ET Aug 5, AFTER the close; Thursday Aug 6 the stock FELL 18.79% to $53.33, then $53.01 Friday. Dutch Bros grew revenue 32.5%, beat the bar by 13.9% on the correct fully exchanged basis, and RAISED full-year guidance on revenue, comps and adjusted EBITDA - and the stock fell 18.79% the next session on 4.4x normal volume. Here is what the headline did not say. Company-operated same shop sales grew 8.3%, but 4.9 points of that was TICKET and only 3.4 points was TRANSACTIONS. A year ago the split was 1.9 ticket and 5.9 transactions. Systemwide transaction growth fell from 5.1% to 1.7%. And on the call, CFO Josh Guenser said pricing will contribute LESS THAN ONE PERCENTAGE POINT to ticket growth in the second half after another price increase rolled off in early July. THE CALL: SELL (2/5, FAIR VALUE $40 vs THE $53.01 CLOSE - AN EXCELLENT BRAND AT A PRICE THAT NEEDS DOUBLE THE BUILD RATE) — base-case value ~$40.0 vs ~$53.01 today. KEY METRICS: - CALL: SELL 2/5, fair value $40 vs the $53.01 Aug 7 close = 24.5% DOWNSIDE. Bull $61, bear $15. Buy under $36. EV $9.37B = 24.2x 2026 guided adjusted EBITDA of $387M, or 26.7x including the $973M TRA. 57x 2026E adjusted EPS of $0.93. Free cash flow near zero after $350-370M of capex. - Street: Buy. 25 analysts (24 buy / 1 hold / 0 sell), average target $77.58, low $68, high $88. D.A. Davidson reiterated $85 on Aug 6. EPS BASIS PROVEN: FY2025 quarters 0.14+0.26+0.19+0.17 = $0.76 = the reported adjusted fully exchanged figure, not the $0.64 GAAP. What to watch: UP: revenue $550.9M, +32.5%; adjusted EPS $0.33 vs a $0.2896 bar, a 13.9% beat on a flat fully exchanged share count; record company AUV of $2,164K, up 9.2%; shop contribution margin 30.6%; labour cost down 120bps; 48 shops opened, 1,225 total; 13th straight positive comp; guidance RAISED; and on a two-year stack traffic slowed under one point, not three. DOWN: 59% of the comp was ticket against 24% a year ago, and management says pricing adds under one point in H2; systemwide transactions grew just 1.7%, implying franchised traffic is negative; adjusted EBITDA margin FELL 76bps because incremental margin was 18.3%; the capex guide rose $80M against a $50M revenue raise, half of which is 31 Phoenix shops bought for $63.5M; the Salad and Go deal is excluded from guidance; free cash flow rounds to zero; and a $973M tax receivable agreement sits outside every net-cash screen. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.