Dutch Bros Q4: A Beat, But Guidance Resets the 2026 Expectation Gap

The numbers themselves were a clear beat. For the fourth quarter, Dutch Bros reported revenue of $444 million, smashing the consensus estimate of $423.79 million. More striking was the earnings surprise: adjusted EPS came in at $0.17, a massive 88.89% above the forecast of $0.09. In isolation, this is a textbook "beat and raise" scenario.

Yet the market's reaction was the opposite of celebratory. Despite the strong print, the stock fell 5.04% during regular trading. This is the classic "sell the news" dynamic in action. The beat was already priced in, and the forward-looking concerns in the company's guidance reset the expectation gap for the year ahead.

The whisper number for the quarter was likely high, given the company's aggressive expansion and consistent same-shop sales growth. The actual results confirmed that trajectory, leaving little new positive information for the stock to digest. The real story shifted to the future. The guidance for 2026, which implied a moderation in same-shop sales growth, likely triggered the sell-off. When the forward view is less exciting than the past results, even a strong beat can disappoint.

The 2026 Guidance Reset

The expectation gap for Dutch Bros was set not by last quarter's beat, but by the forward view management just laid out. The company guided for full-year 2026 revenue of $2.0 billion to $2.03 billion, with an adjusted EBITDA range of $355 million to $365 million. The midpoint of that revenue guidance, $2.015 billion, sits 1% below the analyst consensus midpoint of $2.04 billion. More telling is the EBITDA guidance: the midpoint of $360 million falls short of the analyst estimate of $365.2 million.

This reset is the core of the "sell the news" reaction. The market had been pricing in a continuation of the explosive growth seen in Q4 and the full year 2025. The guidance suggests management sees headwinds that the consensus hadn't fully discounted. Specifically, executives pointed to elevated coffee costs as a pressure point early in 2026. When a company's forward outlook moderates growth and margins, it can trigger a reset of the entire valuation narrative, regardless of how strong the past results were.

The bottom line is that the beat was already in the price. The guidance reset the expectation gap for the year ahead, showing management's caution and likely causing investors to reprice the stock lower.

Drivers of the Beat and the Guidance Concerns

The Q4 beat was powered by a clear operational story. Management pointed to standout transaction growth of 5.4% as a primary driver, alongside a system same-shop sales growth of 7.7%. This transaction momentum, combined with strong new-shop performance, fueled the revenue surge. The strength was also visible in unit economics, with the company hitting record system-wide average unit volumes (AUVs) of $2.1 million. A key indicator of digital and loyalty strength was the Order Ahead mix of ~14%, which executives highlighted as a pillar for growth. This operational beat was the reality that met, and exceeded, the market's expectations for a strong quarter.

The guidance concerns, however, stem from a specific, cited risk. Management explicitly warned that elevated coffee costs will pressure margins early in 2026. This is the primary headwind that likely caused the forward view to reset. The company's own commentary notes that its 2025 contribution margin expansion was achieved despite commodity cost headwinds, suggesting the 2026 outlook assumes a continuation or intensification of this pressure. The guidance for 2026 revenue and EBITDA, which sits below analyst consensus, appears to be a direct response to this cost outlook, moderating growth expectations to account for the margin squeeze.

In essence, the beat was driven by execution on the growth levers-transactions, new shops, and digital penetration-that the market had already priced in. The guidance reset, conversely, was driven by a new, explicit cost risk that the market hadn't fully discounted. The expectation gap shifted from "How good is the past?" to "How much will the future cost?"

Catalysts and What to Watch

With the guidance reset, the stock's path hinges on execution against a few key 2026 catalysts. The market has priced in caution; the next move depends on whether Dutch Bros can prove that caution was overdone.

The first major test is the aggressive expansion plan. Management has laid out a target of opening at least 181 new shops this year, including a ~$20M acquisition of 20 Clutch locations. This is the engine for future revenue growth. Success here will demonstrate that the company's development pipeline and execution engine remain robust, directly countering any narrative that the growth trajectory has peaked. Failure to hit this target would validate the market's skepticism.

A second, more nuanced catalyst is the food rollout. The company is expanding its food menu to ~300+ shops, with executives estimating it could provide an estimated ~4% comp lift. This initiative is critical for boosting average transaction value and driving the transaction growth that powered the Q4 beat. However, it also introduces new margin pressure, compounding the existing headwind from elevated coffee costs. The key will be whether the sales lift from food can offset these input cost pressures, protecting the company-operated contribution margin that expanded over 400 basis points in 2025.

The ultimate catalyst, however, will be the full-year results themselves. The market has reset expectations to the lowered guidance range. The stock will likely remain under pressure unless the 2026 actuals can beat that lowered bar. If Dutch Bros can deliver revenue and EBITDA above the midpoint of its own guidance, it would signal that the company's operational momentum is stronger than the early-year cost warnings suggest. This would be a powerful proof point that the guidance was overly cautious, potentially triggering a re-rating. Conversely, results that meet or fall short of the new range would likely cement the current, more subdued valuation.

In short, the near-term setup is binary. The stock's current price reflects a reset expectation. The path to a re-rating runs through hitting the 181-shop target, successfully navigating the food rollout's margin impact, and ultimately beating the lowered 2026 numbers. Until those catalysts play out, the expectation gap remains.