Dutch Bros posted some impressive numbers for its first quarter ending March 31st, 2026.
Some highlights include:
Achieves 31% Revenue Growth Year-Over-Year
Delivers 8.3% System Same Shop Sales Growth, Including 5.1% System Same Shop Transaction Growth
and raising guidance from:
- Total revenues are projected to be between approximately $2 billion and $2.03 billion.
- Same shop sales growth is estimated to be in the range of 3% to 5%.
- Adjusted EBITDA is estimated to be between $355 million and $365 million, which includes the continued impact of elevated coffee costs, partially offset by leverage on Adjusted SG&A.
- Total system shop openings are estimated to be at least 181.
to:
- Total revenues are now projected to be between approximately $2.05 billion and $2.08 billion.
- Same shop sales growth is now estimated to be in the range of 4% to 6%.
- Adjusted EBITDA is now estimated to be between $370 million and $380 million.
- Total system shop openings are now estimated to be at least 185.
AND YET, there was some hair on this report. With 31% revenue growth, one would expect serious operating income growth. However, have a look at this: operating income only increased from $31,072,000 (Q1 2025) to $34,300,000 (Q1 2026), a paltry 10.4% increase. In the conference call, management cited coffee costs and maintenance/repairs as the primary inputs that eroded margins for the quarter. Let’s look at coffee, shall we!?!
Coffee is about 10% of Cost of Goods Sold (COGS) for Dutch Bros. That’s a relatively small percentage; however, it is a volatile input. We know from the 2025 Q4 conference call that coffee prices take 2 to 3 quarters to be seen in the financial reports. Q1 spanned January 1st – March 31st, 2026, so let’s go back 9 months (3 quarters) from January 1st, 2026 to April 1st, 2025. At that time, coffee, specifically Arabica, was $3.65/lb and traded within a range of $3.45 – $4.05/lb over the next three months. Prices dropped briefly to $2.87/lb in July when massive tariffs slapped on Brazil spiked prices back up to about $4/lb from approximately August through early December 2026.
Accordingly, let’s ballpark Dutch Bros Arabica cost for Q1 at $3.75/lb and compare that to the current price of $2.67/lb. That’s about a 29% drop in Arabica cost. We know that Arabica is a 10% of Dutch Bros’ COGS, so what were Dutch Bro’s COGS in Q1? They were $356,936,000. So, Arabica is $35,693,600 (10%) of that. What would happen if the cost of Arabica used for that were actually what the cost of Arabica is now? Total Arabica COGS would be about $10,351,144 less (29% less). So, let’s add those savings back into operating income: $34,300,000 + $10,351,144 = $44,651,144. Now, let’s see what the operating income growth would be from $31,072,000 to $44,651,144: 44%. Nice!
Arabica now trades just a bit above where it traded in the first few post-pandemic years, which was about double what it was pre-pandemic. The 10-year mean is $1.80 per pound. Arabica has trended down since December 2025 (tariffs were removed in November 2025), so hopefully it will continue away and downward from historic all-time highs toward its 10-year mean. Dutch Bros has another quarter or two of burning through previously higher Arabica prices, and then the current trend becomes our friend!
Cheers!