Dutch Bros Inc "Takeaways from HQ Visit w/ Management" (Buy) Geiger

Research evidence excerpt

Dutch Bros Inc "Takeaways from HQ Visit w/ Management" (Buy) Geiger

with focus on leveraging the combination of the right staff, right location and right

product to compete against both large & established legacy players and smaller but fast-

growing peers. Notably, recent strong performance in Texas (~20% sss in 1Q26) served

as evidence that the brand can perform particularly well even in a highly competitive

market, with the same playbook and marketing strategy likely applicable as the brand

moves into newer markets. Additionally, management reiterated no notable impacts

from the McDonald's recent energy drink test in Colorado, with BROS' differentiated

product, customization options, and experience unique to the competition.

Food - Dutch Bros' food rollout remains on track, with a low-teens% food

attachment rate (above test) and ~4% average sss uplift in stores that offer food

from both transaction and ticket growth. BROS' morning daypart appears to be

stronger given the incremental sales and traffic. We expect a growing contribution

to system sss as food rolls out through 3Q across the rest of the stores targeted to

receive the offering. While focus remains on the execution of the current 9 menu

item food offering, we anticipate additional food items over time and potentially a

greater afternoon product skew is possible.

Menu innovation - BROS' menu innovation pipeline remains strong, with solid

performance from the recent launch of Myst energy refresher (5/1), attracting new

customers and increasing frequency from existing customers, while also driving

similar customer retention to the protein coffee offering. Energy drink platforms

(including Rebel) continue to be a key driver of sales growth, with the new