Shares of Dutch Bros Inc. (BROS – Free Report) have gained 15.3% so far this year against the industry’s decline of 2%. The company is benefiting from strategic store expansion, increased digital engagement and a culture-driven operational model. Its focus on menu innovation and customer loyalty initiatives bodes well. However, an uncertain macroeconomic environment is a concern.
Let us discuss the factors that highlight why investors should retain the stock for now.
Factors Driving BROS Stock
Dutch Bros’ real estate strategy remains a key growth driver. The company’s strategic approach to site selection, combined with an increased focus on development and market planning, is delivering impressive results. In 2024, it opened 151 new shops, 128 of which were company-operated. BROS plans to continue this growth in 2025 with a strong pipeline in place. With an expanding presence across the United States, the brand is tapping into significant market opportunities, especially its “white space” — areas with limited competition but high demand.
Dutch Bros has successfully capitalized on customer engagement through its loyalty program, Dutch Rewards, which now accounts for 71% of transactions, up from the previous year. This reflects the effectiveness of the company’s rewards program in driving repeat business. It is also enhancing customer convenience with its mobile order functionality, which covers 96% of system stores. Dutch Bros is seeing strong adoption in both new and mature markets. This move is crucial for expanding the company’s reach and catering to customers seeking added convenience, especially in the fast-growing digital space.
Image Source: Zacks Investment Research
Innovation is another cornerstone of Dutch Bros’ success. The company’s seasonal offerings and promotional innovations continue to drive sales and keep the brand fresh and exciting. For example, the return of popular holiday drinks such as the Candy Cane Mocha and the Hazelnut Truffle Mocha saw significant increases in sales, with 40% more units sold compared to last year. Additionally, its focus on innovative promotions like the Passenger Princess straw topper and custom holiday ornaments strengthens customer loyalty and boosts sales volume. These efforts are helping Dutch Bros build a strong competitive moat in the beverage industry.
Looking ahead, Dutch Bros aims to build on its momentum, supported by a robust new shop pipeline and a disciplined approach to market expansion. As the company surpasses 1,000 stores, it remains focused on sustainable growth and deepening its connection with customers through digital engagement and community-driven culture.
Concerns for BROS Stock
BROS stock faces challenges from broader economic uncertainty. Ongoing uncertainty surrounding the potential implementation of tariffs, embargoes, or similar trade restrictions poses a risk to the stability of its supply chain. Even without formal enactment, the anticipation of such measures can create disruption and volatility. In January 2025, the U.S. President announced plans to impose tariffs and sanctions on Canada, Mexico and Colombia, though the final outcome of these proposals remains unclear. Any trade barriers targeting Central and South America — key regions for Dutch Bros’ coffee bean sourcing — could result in supply shortages, increased procurement costs and ultimately, a negative impact on the company’s operations and profitability.
BROS’ Zacks Rank & Key Picks
Dutch Bros currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Retail-Wholesale sector are BJ’s Restaurants, Inc. (BJRI – Free Report) , Portillo’s Inc. (PTLO – Free Report) and Brinker International, Inc. (EAT – Free Report) .
BJ’s Restaurants currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The company delivered a trailing four-quarter negative earnings surprise of 84.7%, on average. The stock has declined 4.6% in the past six months. The Zacks Consensus Estimate for BJ’s Restaurants’ 2025 sales and earnings per share (EPS) indicates growth of 3.2% and 13.6%, respectively, from the year-ago period’s levels.
Portillo’s currently sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of negative 62.7%, on average. The stock has declined 10.8% in the past year.
The consensus estimate for Portillo’s 2025 sales indicates growth of 11.7% from the year-ago period’s levels.
Brinker currently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 24.7%, on average. The stock has gained 75.2% in the past six months.
The Zacks Consensus Estimate for Brinker’s 2025 sales and EPS indicates a rise of 18.7% and 102.4%, respectively, from the year-ago period’s level.
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