Dutch Bros stock spirals lower as company misses revenue guidance projection
- Dutch Bros stock gets shunted below $30 per share.
- Market seems overly pessimistic on a mere $5 million miss on full-year sales guidance.
- BROS profits, revenue overpower Wall Street consensus for Q2.
- NASDAQ, S&P 500 trend higher as Initial Jobless Claims come in below forecast.
Make no mistake. Dutch Bros (BROS) had a terrific second quarter. At first glance, however, with the share price plunging 22% on Thursday to $29.40, traders might think otherwise.
But Dutch Bros is simply a victim of its own success. The Oregon-founded coffee shop that targets America’s suburban drive-thru consumer is selling off due to a slight miss on Wall Street’s future revenue guidance.
The performance appears so much worse since the broad equity market is thriving on Thursday following a jobless report showing that new jobless claims are not as bad as feared following last week’s rise in the Unemployment Rate. The NASDAQ has garnered a 2.1% lift on Thursday at the time of writing near lunchtime, while the S&P 500 advances around 1.7%.
Dutch Bros sales growth settles down alongside strapped American consumer
The almost silly reason for the BROS stock sell-off is that management placed the midpoint of their fiscal 2024 revenue projection at $1.225 billion, whereas Wall Street has a consensus figure closer to $1.23 billion.
Yes, you read that correctly. BROS stock has sold off by about $1.5 billion in market cap due to a difference of $5 million in revenue guidance. Go figure!
But a lot can go wrong when a high-growth stock is trading at 100 times adjusted earnings and 200 times GAAP earnings, which was the case with Dutch Bros.
More importantly, Dutch Bros reported Q2 adjusted earnings per share (EPS) of $0.19, which was nearly 50% higher than the consensus of $0.13.
Revenue of $325 million came in more than $7 million ahead of expectations in Q2 and rose 30% from a year earlier.
“In Q2, we opened 36 new shops marking the 12th consecutive quarter of 30 or more new shop openings,” said CEO Christine Barone on the earnings call. That figure put Dutch Bros over the 900 location level and on track for 1,000 locations in the first half of 2025.
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Dutch Bros stock forecast
BROS stock was already trading below its 50-day Simple Moving Average (SMA) before earnings, which was a warning sign. Shares bounced off of support at $27 in the morning session, which is a good sign. If that level does not hold, then the $25.50 level from February should do the trick.
For now, the only goal for bulls is the 200-day SMA, which is sailing near $32. The downtrend will end once that barrier is overcome.
BROS daily stock chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
