BROS went public about three years ago as you can see in the chart above. Comps – the most important metric for a early stage, fast growing retailer – started out strong but hit a rough patch, possibly due to overexpansion in the markets they decided to enter. But they rebounded in 1Q24 to 10.0% which they reported last Tuesday and the stock has rallied taken off since then. In conjunction with that report, BROS guided full year Adjusted EBITDA to $195-$205 million. With a current market cap of $6.7 billion that’s 33.5x multiple – not bad at all for an early stage fast grower with a lot of potential like BROS. With BROS being so popular among Millenials, it could very well be the next Starbucks. I intend to pick up and hold a big position for the long term when the moment is right.
There was quite the line for the drive thru at Dutch Bros but I went to the window and ordered a small Annihilator. A young lady came shortly after me and I asked her about Dutch Bros. She had made an almost 30-minute drive from downtown and said she much preferred it to Starbucks. I asked her if it a lot of younger people felt that way and she said they did. She said that they also loved it in Sacramento where she’s from.
After getting up early Thursday morning and doing my morning routine of reading, writing and market related work, I headed out at 8:00am for a 30-minute walk on the beach which was an excellent start to the day. Shortly after returning I headed over the the nearby Night And Day Cafe for a breakfast sandwich before heading up to Oceanside in the northern part of San Diego. I had two items on my agenda in Oceanside. First, I wanted to get a drink at Dutch Bros (BROS), an up and coming coffee chain. Second, I wanted to play poker at Ocean’s 11 Casino.