What Happened:

Shares of coffee chain Dutch Bros (NYSE:BROS) jumped 14.5% in the morning session after the company reported a 'beat and raise' quarter. Dutch Bros blew past analysts' revenue, adjusted EBITDA and EPS expectations this quarter. Notably, the topline benefited from the combination of ticket expansion and traffic, and this flowed to the bottom line. As a result, management seemed more optimistic and raised its full year guidance for revenue and adjusted EBITDA. Zooming out, we think this was an impressive quarter that should delight shareholders.

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What is the market telling us:

Dutch Bros's shares are very volatile and over the last year have had 15 moves greater than 5%. But moves this big are very rare even for Dutch Bros and that is indicating to us that this news had a significant impact on the market's perception of the business.

Dutch Bros is up 1.3% since the beginning of the year, but at $31.37 per share it is still trading 11.9% below its 52-week high of $35.62 from March 2024. Investors who bought $1,000 worth of Dutch Bros's shares at the IPO in September 2021 would now be looking at an investment worth $858.07.

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