Fast-growing coffee purveyor Dutch Bros (NYSE: BROS) naturally draws comparison to Starbucks (NASDAQ: SBUX) as a fellow coffee chain that started in the Pacific Northwest and harbored nationwide (and worldwide) ambitions. While these comparisons are indeed apt, there's another high-growth consumer stock that Dutch Bros is beginning to remind me of: Domino's Pizza (NYSE: DPZ), one of the great growth stocks of the past decade. With a return of over 1,000% over the past 10 years, Domino's has done well for investors.
Dutch Bros (NYSE: BROS) and Starbucks (NASDAQ: SBUX) have a lot in common -- both started in the Pacific Northwest and Starbucks has spread across the world, while Dutch Bros, which started 21 years later, is beginning to spread across the United States. There are some key differences as well -- Dutch Bros locations are primarily drive-thrus, whereas Starbucks has embraced becoming the '"third place" outside of home and the office where customers can come to drink coffee, work, and socialize. Furthermore, it seems unlikely that we will see a drink with a name like the OG Gummybear or the Vampire Slayer on Starbucks' menu anytime soon.
Dutch Bros (NYSE: BROS) delivered another quarter of strong growth, finally reaching $1 billion in revenue on a trailing 12-month basis, but inflation is taking a toll on profit margins and on its lower-income customers even as it forces the drive-thru coffee chain to continuously raise prices. Although management raised its full-year revenue guidance, investors still need to take the long view when buying its stock because almost all of Dutch Bros' gains are coming from new store openings. It indicates Dutch Bros' business model can be successfully replicated as it expands its footprint across the country.