Q3 2024 Dutch Bros Inc Earnings Call Transcript
Key Points
- Dutch Bros Inc (BROS) reported a 28% increase in revenue and a 20% rise in adjusted EBITDA for Q3 2024, exceeding expectations.
- The company successfully opened 38 new shops in Q3, bringing the total to 950, and plans to open at least 160 shops in 2025.
- Mobile order rollout reached 90% system coverage, contributing to a 5% increase in customer frequency and higher tip rates.
- Dutch Rewards program saw significant growth, with over 1 million new registrations in Q3, accounting for 67% of transactions.
- Paid advertising efforts have tripled unaided brand awareness in Texas and are driving sales growth in new and mature markets.
- Labor costs increased by 160 basis points year-over-year, primarily due to higher compensation expenses in California.
- Occupancy and other costs rose by 110 basis points, driven by elevated repair and maintenance expenses.
- The company faces challenges in reducing per unit development costs, with average CapEx per shop at approximately $1.7 million.
- Despite strong growth, food sales remain less than 2% of total sales, indicating limited current impact from food offerings.
- The mix of transactions showed a negative trend, with a 2% decline in Q3, attributed to discounts and mix changes.
Greetings, and welcome to the Dutch Bros' third-quarter 2024 conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce Paddy Warren, Director of Investor Relations and Corporate Development. Please go ahead.
Good afternoon, and welcome. I'm joined by Christine Barone, CEO and President; and Josh Guenser, CFO. We issued our earnings press release for the quarter ended September 30, 2024, after the market closed today. The earnings press release, along with the supplemental information deck have been posted to our investor relations website at investors.pros.com.
Please be aware that all statements in our prepared remarks and in response to your questions, other than those of historical facts, are forward-looking statements and are subject to risks, uncertainties, and assumptions that may cause actual results to differ materially. They are qualified by the cautionary statements in our earnings press
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