Prepared remarks
Thank you for standing by and welcome to the Dutch Bros Inc. Second Quarter 2026 Earnings Conference Call and Webcast. This conference call and webcast is being recorded today, 08/05/2026 at 5:00 PM Eastern Time and will be available for replay shortly after it has concluded. Following the company's presentation, we will open the lines for questions and instructions to queue up will be provided at that time. I would now like to turn the call over to Neil Patel, Dutch Bros Director, Investor Relations. Please go ahead.
Good afternoon. I am joined by Christine Barone, CEO and President, and Joshua Guenser, CFO. We issued our earnings press release for the quarter ended 06/30/2026 after the market closed today. The earnings press release along with a supplemental information deck have been posted to our Investor Relations website at investors.dutchbros.com. Please be aware that all statements in our prepared remarks and in response to your questions other than those of historical fact 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 release and the risk factors in our latest SEC filings, including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. We assume no obligation to update any forward-looking statements. We will also reference non-GAAP financial measures on today's call. As a reminder, non-GAAP measures are neither substitutes for nor superior to measures that are prepared under GAAP. Please review the reconciliation of non-GAAP measures to comparable GAAP results in our earnings press release. During the question-and-answer portion of today's call, please limit yourself to one question and avoid multipart questions so that we can accommodate as many participants as possible. With that, I would like to turn the call over to Christine.
Thank you, Neil, and good afternoon, everyone. Dutch Bros continues to be powered by a differentiated, people-led culture, expanding customer occasions, and a real estate development engine that is unlocking new growth opportunities across the country. The success of our strategy was evident in Q2 as we delivered our eighth consecutive quarter of transaction growth and again delivered strong comp sales that have compounded year over year—durable growth built on an already strong base. In fact, Q2 marked our 13th straight quarter of positive comp sales. This performance is the product of years of foundational investment—not one lever, but a full playbook we have built deliberately and are executing with intention. This gives us incredible confidence in our ability to continue growing the business for the long term. Based on our performance so far this year, and the recent acquisition of one of our Phoenix franchisees, we are raising our full-year guidance. Turning to our Q2 results, total revenues increased an outstanding 32%, accompanied by strong profitability with adjusted EBITDA up 28%. Our distinctive value proposition continued to resonate in Q2, and we saw system-wide transaction growth driven by the strength of our brand and our endlessly customizable offerings delivered with speed, quality, and service. Development momentum remained exceptionally strong during the quarter, with 48 system shop openings, reinforcing our confidence in our pipeline and the path ahead to reaching 4,000 shops in 2029. Our transaction-driving initiatives, including the rollout of food and category-leading innovation, are working, serving as an important proof point in our ability to continue growing transactions while scaling nationally. System-wide AUVs continued their upward momentum in Q2, and new shop productivity was exceptional—an important validation of Dutch Bros' long-term growth opportunity and the continued expansion of the beverage category. Our Q2 results are a direct reflection of the investments we have made across the business over the past several years. Our foundation remains exceptionally strong; we are building on that momentum. As we look ahead, the power of our brand, industry-leading innovation, and our ability to grow customer occasions give us tremendous confidence in the long-term trajectory of Dutch Bros. But none of it would be possible without our team who bring the Dutch Bros experience to life every day. At Dutch Bros, everything starts with our people. Our people-led culture remains the foundation of our success and the driving force behind how we grow. Our Broistas are the heartbeat of our brand, pour into their communities, make customers feel seen, and create meaningful moments that keep customers coming back. These genuine customer connections remain the strongest differentiator of the Dutch Bros experience. Customers come to us for more than a drink—they come for the moment at the window that makes their day a little better. That connection has been the hallmark of our brand since our very first stand. And because we grow our leaders from behind the window, that special feeling of connection only gets stronger as we grow. It is the reason we continue to be at the top of the industry in customer ratings for pleasant and friendly service. The exceptional people across our brand allow us to execute consistently, scale into new markets, and deliver the unmatched Dutch Bros energy our customers know and love. Today, we have more than 525 operator candidates in our pipeline with an average tenure of nearly eight years—a leadership bench that gives us tremendous confidence in our ability to continue growing in a unique way only Dutch Bros can. At the end of June, I spent time with more than 2,000 of our field leaders at A Better World, our immersive and engaging field event focused on developing the next generation of Dutch Bros leaders. Being surrounded by the people who bring our culture to life every day reinforced what makes Dutch Bros so special. Their passion for growing others, serving with kindness, and living our mission gives me tremendous confidence that our people will continue to be our greatest differentiator as we grow. The road to 4,000 shops in 2029 remains very clear, supported by our robust development pipeline. As we deepen our presence in existing markets and thoughtfully expand into new ones, each new shop opening reinforces the power of the Dutch Bros brand from coast to coast. Importantly, density continues to be a competitive advantage. We believe density matters and continue to view it as a strategic asset of both our expansion model and growing brand awareness. While we continue this densification strategy, we are also entering new markets as we expand our footprint across the country, and new market performance continues to give us even more confidence in our growth path ahead. One of the best examples is in the Chicago market. Last quarter, we provided an update on our entry into the greater Chicago area, highlighting that our first shop was pacing to a volume of approximately $4 million. During Q2, we expanded our footprint in the greater Chicagoland area with our Melrose Park shop, which is pacing to a volume of approximately $7 million. The response from the community has been incredible. Opening day demand exceeded our expectations and set a new company record, further underscoring the portability of the Dutch Bros brand. The early results affirm our belief that the greater Chicagoland area represents a meaningful long-term growth opportunity. Across several newer markets, we are also seeing incredible traction—from Atlanta to Charlotte to Tampa, we are seeing many new markets annualizing meaningfully above expectations, showcasing firsthand how well the Dutch Bros brand travels and resonates across diverse geographies. We are also excited to have entered our 26th state, Mississippi, in July. We recently completed the Phoenix East Valley acquisition, following the retirement of our franchise partner who had been with Dutch Bros for nearly 20 years. Looking ahead, our development momentum remains very strong. We are opening shops ahead of schedule, our pipeline is rapidly growing, and we continue to see attractive conversion opportunities both from emerging growth concepts and legacy beverage and drive-through players. Whether we are entering new markets or building density in existing ones, the broad appeal of the Dutch Bros brand and the significant runway ahead become even more evident with each shop we open. Growth is not just about expanding our footprint. It is also about creating more reasons for customers to choose Dutch Bros throughout the day. In Q2, innovation across our menu and our relentless focus on the customer experience helped strengthen customer routines, drive frequency, and deepen engagement with the brand. Let me start with food. Food continues to be one of our most important sales drivers and a key component of our morning daypart strategy. By the end of Q2, we completed the rollout of our new food program across approximately 750 system shops—ahead of schedule. Throughout the rollout, the response from customers and Broistas has exceeded expectations. We are seeing customers incorporate Dutch Bros into more morning occasions, creating additional opportunities to engage with the brand and strengthening our position within customers' daily routines. Beyond food, innovation across our beverage menu and merch drops kept customers engaged and excited to visit Dutch Bros in the quarter. In May, we introduced Mist Energy Refreshers, a new category of plant-powered energy drinks to complement our proprietary Rebel platform, further strengthening our leadership position in the energy space. Mist allows us to broaden our occasions and reach new customers while bringing meaningful innovation to the beverage industry. At launch, we drove trial of Mist through our Fill-a-Tray event, making it easy for customers to mix and match and discover this new platform. Mist headlined our Q2 LTO lineup alongside the return of fan favorites Strawberry Colada and Dulce de Leche, and drove outstanding year-over-year growth in LTO unit velocity. Since the launch of Mist, we have increased our overall energy mix and driven retention rates ahead of recent LTO benchmarks. Given the overwhelmingly positive customer response, we have made the decision to give Mist a permanent home on the menu alongside our Rebel program. Together, Mist and Rebel reinforce our innovation in energy and create a sustainable growth engine for the business. Beyond beverages, our merch drops continue to generate excitement and engagement, giving customers another reason to make a special trip to Dutch Bros while becoming truly signature events for the brand. We saw another quarter of meaningful sales lift with standout drops like the state sticker and frog charm delivering the strongest merch sticker drops of the year. Our digital ecosystem also continues to deepen customer engagement. We ended Q2 with over 73% of transactions flowing through Dutch Rewards, reflecting continued customer adoption and engagement. Rewards penetration has been on a consistent climb over the last three years, and we have grown our registered members per shop by over 50%. In Q2, Dutch Rewards also delivered its strongest contribution to comp since the start of our customer segmentation journey. Our ongoing investment in segmentation and personalization is enabling more relevant customer experiences and remains an important lever to drive long-term transaction growth. We are also seeing continued adoption of order-ahead, which reached approximately 16% of the total transaction mix, improving convenience and making it even easier for customers to engage with us. Our CPG business continues to expand the reach of our brand, introducing customers to Dutch Bros and keeping the brand top of mind between visits to our shops. In Q2, the Dutch Bros CPG portfolio continued to show strong customer demand, generating above-category-average velocity in all formats in which we compete. As we scale the brand, maintaining strong operational discipline remains a key priority. In Q2, we launched our Vibe Check scorecard, giving leaders greater visibility into shop-level performance and enabling our field teams to make more informed operational decisions. As we continue to grow, tools like these help our teams maintain consistency and operational discipline. We successfully executed several high-demand events during the quarter, including a major sticker merch drop and Fill-a-Tray events. Through improved staffing and operational planning, our teams delivered a consistent customer experience even during these periods of elevated demand. Finally, we continue to see improvement in throughput, with further progress already underway. We are focused on shop layout, equipment optimization, and operational processes that help our Broistas serve customers with speed while maintaining the quality and service our customers expect. In closing, our confidence in the opportunity ahead has never been greater, and it is clear that our strategy is working. Our people-led culture continues to scale alongside the business and remains the defining differentiator of the Dutch Bros brand. Backed by our deep leadership pipeline and consistent execution, we believe what sets us apart today will continue to be a key reason why customers choose Dutch Bros and keep coming back. Our strong performance in new markets and continued momentum across our development pipeline reinforces our confidence in the path to 4,000 shops in 2029. Our sales-driving initiatives are delivering exceptional results—exceeding our expectations and delighting customers. Beverage innovation, food, merch drops, and digital advancements. This is our playbook in action, all working together, and eight consecutive quarters of transaction growth is the clearest proof it is paying off. Looking ahead, we remain confident in our ability to execute against the significant opportunity ahead of us. We continue to see significant runway for growth, supported by the strength of our brand, the passion of our people, and our ability to continue creating more occasions for customers. Together, these advantages position Dutch Bros to continue taking share and further solidify our position in the beverage category. With that, I will pass it to Joshua.
Thanks, Christine. I will start with a recap of our second quarter performance and then share our outlook for the remainder of 2026. Our second quarter results were above our expectations, with upside driven by outstanding execution of our marketing initiatives and the continued traction in our idiosyncratic sales drivers. The dedication of our people and the strong conviction we have in our brand solidify my confidence in the balance of the year and our ability to drive long-term growth. For the second quarter, total revenues were $551 million, growing 32% over the second quarter of last year. Company-operated same-shop sales growth in Q2 was an impressive 8.3%, with transaction growth of 3.4%. System same-shop sales growth in Q2 was 5.8% with transaction growth of 1.7%. The strength of our two-year transaction stack highlights the effectiveness of the layers of sales-driving initiatives we have executed over recent years and their ability to generate strong customer demand even in an environment of lower consumer sentiment. Performance during the quarter benefited from the continued rollout of our new food program, the continued maturation of newer shop vintages, strength in brand marketing initiatives, and the momentum in customer segmentation within Dutch Rewards. With our system same-shop sales performance in Q2, and performance quarter-to-date in Q3, we are updating our guidance for the full year to 5% to 6%. Now let me be clear: given our performance to date and our expectations for the full year, we are trending towards the midpoint of that 5% to 6% range. This guidance reflects transaction comparisons continuing to step up through the remainder of the year and the lap of the food rollout we began in Q3 of last year, which primarily impacts net ticket. Our updated full-year comp guidance contemplates system same-shop sales growth of approximately 4% to 5% in Q3, reflecting stronger transaction comparisons and the impact of effective pricing stepping down sequentially. As a reminder, we rolled off another point of price in early July, and with pricing taken during the year, our ticket will include less than a point of effective pricing in the back half of the year. This reflects our disciplined approach to pricing while preserving our strong value proposition. I am very proud of the momentum we have generated across our business as the number of new shops we opened quarter after quarter continued to reach record volumes. The strength of our brand, the effectiveness of our sales drivers, and the tactical execution of our playbook continue to drive system-wide AUVs higher. New shop productivity remained strong in Q2, keeping pace with this continued upward trajectory in system-wide AUVs, and we continue to build momentum across our real estate development pipeline. During the second quarter, we opened 48 new shops, continuing our strong pace of development growth. We now have approximately 90% of the pipeline needed to achieve 4,000 shops in 2029. The depth of this pipeline, coupled with the outstanding execution of our development team, reinforces our confidence in our ability to continue capturing the significant amount of white space ahead of us. Last week, we completed the acquisition of the franchise rights and assets of 31 locations in the Phoenix market, including one location currently under development. Total purchase consideration was $63.5 million. For the remainder of 2026, we expect this to drive net incremental total revenue of approximately $25 million, inclusive of an approximately $5 million reduction in franchise and other revenue. We also expect incremental adjusted EBITDA of approximately $5 million for the balance of the year, which is net of transition-related costs. Earlier this week, we entered into an agreement to acquire the real estate and related site assets of up to 65 Salad and Go locations in Arizona, Nevada, Oklahoma, and Texas—an opportunity that we believe enhances our development pipeline and deepens our scale in these markets. We anticipate closing this acquisition this quarter subject to applicable approvals and other customary closing conditions, with conversions expected in 2027. We are excited to expand our company-operated presence in these important growth markets where we continue to see significant white space opportunity. Shifting to our company-operated shops, performance in Q2 was exceptional, with revenue totaling $510 million—an increase of 34% or $130 million compared to the second quarter of last year. Company-operated shop contribution was $156 million, representing a year-over-year increase of 32%. Company-operated shop contribution margin was incredibly strong, approximately 31%. Beverage, food, and packaging costs were 26.1% of company-operated shop revenue, which is 80 basis points higher year over year, primarily driven by higher coffee costs and costs associated with the continued rollout of our new food program. We continue to expect an impact from higher coffee costs in the back half of the year. The updated full-year 2026 guidance contemplates approximately 60 basis points of total COGS pressure, which includes the impact from costs associated with the new food program. Labor costs were 25.4% of company-operated shop revenue, which is 120 basis points favorable year over year, primarily due to sales leverage. Occupancy and other costs were 16.3% of company-operated shop revenue, which is 50 basis points higher year over year, primarily due to higher rent on new shops as we shift more of our portfolio to build-to-suit leases. We continue to expect this shift toward build-to-suit leases will drive higher occupancy costs as a percentage of revenue in 2026. We expect this impact to be approximately 50 basis points for 2026, consistent with what we saw in Q2. Preopening expenses were 1.0% of company-operated shop revenue, which is 40 basis points higher year over year, primarily driven by increased number of shop openings. Moving down the P&L, adjusted SG&A in Q2 was $72 million or 13.2% of total revenue. While continuing to make investments in our people and infrastructure, we were able to drive 90 basis points of leverage on adjusted SG&A. Our updated 2026 guidance now contemplates approximately 90 basis points of leverage on adjusted SG&A for the full year. Our full-year guidance contemplates Q3 adjusted SG&A of $73 million to $74 million. In the quarter, adjusted EBITDA was $114 million, an increase of 28% over Q2 of last year, and we delivered $0.33 of adjusted EPS, up from $0.26 in the second quarter of last year. Let me now provide an update on our liquidity and CapEx. As of June 30, we had approximately $699 million in liquidity, including $269 million in cash and cash equivalents, and the balance in our undrawn revolver. In Q2, our average CapEx per shop was approximately $1.4 million, consistent with Q2 of last year. We remain on track toward our long-term goal of a 60% build-to-suit lease mix, and we continue to increase the number of high-quality sites we are adding to our pipeline. As other concepts continue to rightsize their drive-through fleet, they are creating even more opportunities for us to expand into high-quality locations with exceptional long-term economics. Turning to our guidance. We are approaching the back half of the year from a position of strength. We have a highly focused plan, long-term visibility into our key growth initiatives, and a very clear objective: to continue converting the significant white space ahead of us into durable growth. Given the performance we have seen thus far and the impact of the Phoenix franchise acquisition, we are raising our 2026 guidance in the following areas: - Total revenues are now projected to be between $2.1 billion and $2.13 billion, representing 28% to 30% growth year over year. - System same-shop sales growth is now estimated to be in the range of 5% to 6%, with us trending towards the midpoint of that range. - Adjusted EBITDA is now estimated to be in the range of $385 million to $390 million. The midpoint of this range contemplates approximately 20 basis points of year-over-year net adjusted EBITDA margin pressure, reflecting the impact of higher coffee costs and increased occupancy costs partially offset by leverage on adjusted SG&A. - Capital expenditures are now expected to be in the range of $350 million to $370 million. We remain very confident in opening at least 150 system shops in 2026. I am very proud of the results our team delivered in Q2. Strong operational execution, the continued focus on establishing the everyday routine for our customers, and incredibly strong four-wall economics give me even greater conviction that we are set up for long-term success. Thank you, everyone. We will now take your questions. Operator, please open the lines.
Questions and answers
Thank you. We will now be conducting a question-and-answer session. Please limit yourself to one question. To signal a question, please press Star 1 on your telephone handset. Our first question will come from Dennis Geiger with UBS.
Joshua, you gave some really helpful color on the rest of the year guidance, including as it relates to the same-store sales target. Wanted to know if you could get into that a little bit more as far as how you are thinking about the back-half outlook. Any other puts and takes as it relates to some of the key initiatives that you have in place and how you are thinking about contribution as we move through the back half of the year, as well as just kind of anything on the broader macro backdrop, competition, anything else that might impact the back-half comps?
Yes, Dennis. Thanks for the question. So as we think about our guide for the full year of the midpoint of the 5% to 6% range, that really does reflect the continued step up in transaction comparison. So we see step up in Q3 and Q4. We also are rolling off net pricing as we head into Q3, so we will see that impact our ticket. And then we begin to roll over, actually, the start of the rollout of our food program that we started in Q3 of last year and then more meaningfully in Q4. So all those factors lead us to that 5% to 6% range for the full year and 4% to 5% comps for Q3.
Yeah. And as we look at the broader macro environment, we are feeling really good about how we are positioned. We think that we continue to be positioned to really outcompete the rest of the industry and outperform with mobile order, with Dutch Rewards, with the food program, and all of the different initiatives that we have added together are just really performing. Our customers are loving them and our Broistas are serving them with exceptional service.
Our next question will come from Andrew Charles with TD Cowen.
Great. Thank you. Just a little on the guidance for 4%–5%. It implies a deceleration from the strong Q2 results on both the two-year basis as well as a seasonal basis. And I know you called out rolling off some price, but are there other dynamics to think about considering the implied deceleration? In particular, are you seeing any headwinds from the surges of gas prices? Obviously, Starbucks had a big launch this month with blended energy as well. Just any dynamics that we should be thinking about as well here.
Yeah, Andrew, thanks for the question. I would really point you towards the primary driver being that transaction lapse starting to step up here and then what we are rolling off both in terms of pricing and the rollover of the start of our food program. So we do feel very good about the position that we are in as we head into Q3 and for the balance of the year and how things are shaping up for us.
We will go next to Jeffrey Farmer with Gordon Haskett.
Thanks. Over the last couple of quarters, you guys pointed out some pretty big increases in your LTO unit velocity. So just looking for a little bit more color there. And then more importantly, what is the relationship between increased LTO velocity and your traffic and same-store sales numbers? Thank you.
Thanks for the question. So we continue to be really pleased with how our LTOs are performing. When you look at Q2, I would highlight the launch of Mist. This is an incredibly important—we are the leader, the category creator in customized energy. And having that full platform, including Mist, really just adds to what our customers can choose across that. We actually saw an incremental increase in energy as a total percent of our sales as we looked over that quarter. So really excited to see how that is performing. We did launch that as an LTO, and with that strong performance, we have decided to keep that on the menu. As we have talked over the last couple of quarters and look at our innovation, we really look at innovation as platform innovation and then some of those LTOs, those new flavors that just drive excitement across our business. This quarter we were really focused on that platform innovation with launching Mist. You know, the other thing we saw too is as we look at our LTOs, we look each year at what is performing really well and saw a continued really great performance out of Strawberry Colada. So to see both Mist performing and our Strawberry Colada along with very strong performance out of Dulce de Leche for that second year as well.
Moving on to Sara Senatore with Bank of America.
Oh, thank you. I wanted to ask about the franchisee comps perhaps. It looks like the gap is widening, although certainly, I think the two-year gap maybe is more stable. I guess the reason I ask is twofold: one, trying to distinguish how much of your strength in the company system was kind of the wind at your back from a strong segment versus I think you tend to do more preopening, you tend to do more local marketing. So just as I think about your underlying drivers, it sort of feels like maybe franchise is a control group. And then the other piece is I know you bought in a franchise system. I guess is there an opportunity to maybe increase or accelerate comps from that business as well? Thank you.
Yes, Sara. I will just talk about the broader spread to start with. As we shared in the past, one of the biggest drivers of the spread between company and franchise is really that we see strong comp tailwinds coming from the newer vintages of shops, and our growth is more heavily weighted towards the company-operated side. So that just disproportionately benefits our company-operated system more. Adding to that, as we have rolled out food, we completed the rollout of food into our company-operated system during the quarter. We will start rolling that out into the franchise system starting next quarter. So certainly, that helped create some of the spread, especially on the ticket side as we look at Q2.
And then just as a reminder about 350 of our shops that will not be able to have the hot food program, that is disproportionately in the franchise shops. The franchise shops that we have been testing with have started to roll out food, and those that have all of the new bakery are seeing great results with it.
We will go next to Andrew North with Baird.
Great. I had a follow-up on the food platform, so you teed it up well. I was hoping you could expand a bit on your opportunity to raise awareness of the offering. I think, as you mentioned, food is rolled out to a majority of the company-operated locations now to date. I was wondering if you were seeing sales mix continue to build as awareness has naturally grown and maybe how you are thinking about putting marketing dollars—if that is a consideration behind food—to drive year two of growth in that platform? Thanks.
Yeah. So if we look at the food platform, our teams are really excited about the platform. We actually see from the very beginning of the launch of food that we see that pop up in food attach very, very quickly within our shops. As we look at what we are trying to do with food, the first thing that we heard from our customers loud and clear was that they love Dutch Bros the most, but some days they go to another place because they want a breakfast sandwich or something like that in the morning. So it is really important for us to add this for our customers, and we are seeing that attach right away as we roll out the program. We are very focused right now on executing the program really well and are really pleased with the lift that we are seeing. As we look at the long-term opportunity, I think not only do we have an opportunity to grow awareness of the program, but we also now have a very important food capability as part of our toolkit. As we look ahead, I think there are other platforms we can consider that might still be missing within our offering. We only have nine SKUs right now within our shops. I think food can also play a nice role in seasonal offerings to help drive that awareness and that traffic. And as we roll out into new markets, customers really expect us to have that broader food offering, so we are very pleased when they come to our shop. Some of those new shops that we spoke about are seeing really great success with food as well.
And our next question will come from John Ivankoe with JPMorgan.
Good evening, guys. Can you help us understand how the new store product has been steadily ticking higher? I mean, what is being done differently, especially as many stores are opening in newer markets? And I have a follow-up.
Yeah. So if we look at our new shop performance, we continue to be incredibly pleased. As you know, we have been on a journey in developing our real estate capabilities—starting with market planning, understanding how each store that we open is going to perform not only when it opens but also as we fill out that whole market. Then looking at how we do our marketing within a new market, how we think about what really works and what helps to drive customers in. We have been on a march to build brand awareness as we go into new markets and I think across all of those things it is clearly working and we are opening great new shops as we continue to roll out in the country. One of the big highlights in this quarter was opening in Chicago, our second shop there. To set an opening day record when we are at 1,200-plus shops in a new market just really speaks to the incredible strength of the brand and all of the awesome work that our teams are doing.
We will go next to Nerses Setyan with Mizuho Securities.
Hi, thank you. Just in terms of the guidance for the second half, any way to kind of break out company-owned versus franchise, given the expanding gap here? That would be very helpful. And aside from the food rollout being delayed at the franchise stores, are any of the other initiatives that are taking place in company-owned stores not taking place within the franchise stores?
Yeah, Nerses. So we do not provide guidance on the components of company versus franchise. Certainly, as we think about some of the drivers for that spread, you should expect there to remain a spread as our shop growth cadence on the company side is outpacing the franchise side. But that is about as much detail as we would give on guidance as it relates to the spread between the two.
And our food rollout really is ahead of schedule. We always expected to roll out the company-operated shops first and for our franchisees to see that great performance and then adopt the program.
We will go next to Sharon Zackfia with William Blair.
Hi. Thanks for taking the question. Sorry—I'm losing my voice. Can you talk about what you are seeing with Mist in terms of the demographic and the dayparts that might differ from what you see with Rebel?
Yeah. So as we look at Mist, we are really seeing afternoon daypart strength continue, but we also do see Mist occasions in the morning as well. I do think it is a lighter customizable caffeine in the Mist product. It is plant-powered and provides that really refreshing platform that our customers love. As far as demographics go, it looks fairly similar to what we are seeing from Rebel as well, but it is incredibly early days still for Mist. We think this platform has a long way to go and as the energy market evolves, we would expect that more of those occasions will come into the morning as well. I think it is becoming something that our customers are really drinking throughout the day.
Moving on to Gregory Francfort with Guggenheim Partners.
Hey. Thanks for the question. I just wanted to ask about the thought behind the Salad and Go lease acquisition. I mean, I think these are about a thousand square feet, so it is pretty comparable to the size of a Dutch Bros. But I think Arizona and Nevada might be two of your three or four most penetrated states, and you kind of have been growing mid-single-digit unit growth in those markets. Is this to kind of turbocharge growth? Is there a lot of overlap with your stores? Just anything on the thought process there. Thanks.
Yeah, Gregory. We really look at this as a great opportunity for us to get a hold of some fantastic real estate in markets where we see a lot of potential to continue growing. So while you are right we have several shops in Arizona and Nevada, we still see a significant amount of white space ahead and availability for us to be able to go after creating more of that daily routine and a daily occasion with customers. So we see this as a nice addition to the overall portfolio. To your point, the sites themselves are right around our typical shop size, so it should lead to easier conversion to a Dutch Bros.
Moving next to Jon Tower with Citigroup.
Great. Thanks for taking the question. Maybe quick clarification on the CapEx question: just want to make sure that the bump in CapEx in your guidance includes the acquisition of the Phoenix franchise market, and then on the rewards program—you mentioned it delivered its strongest contribution to comp since the start of the customer segmentation journey. Can you just speak to what exactly contributed to that? Was it something you are doing explicitly in the program that drew customers back, products in the period, or exclusive merch? Just curious what moved the needle there.
I will start with the CapEx question quickly. That increase does not include the announcement around Salad and Go.
On the rewards program, we have really been on a journey, and a lot of this is us taking our data and being able to segment it in new ways and then provide very unique offers to different customer segments that really match what we are seeing from their behavior patterns. When we see a behavior pattern, we target actions to get someone into that next layer of frequency, get them into that next drink, or make them aware of other products that we have. So it is actually an increase in our sophistication in data and the way that we are using it within our rewards program. We are also adding different ways that we can encourage our customers to try new things—things like streaks in the program. We are building out new technological capabilities along with all of that data segmentation.
And moving next to Jacob Aiken-Phillips with Melius Research.
Good afternoon, guys. Thanks so much for taking our question. So between the 150 planned openings this year, acquired franchise shops, the Salad and Go conversions, I was just curious as to how you are planning on sequencing these projects to ensure that the operator and MOB pipeline is not stretched. Is people capacity permitting or is construction now the primary constraint? Thanks.
Yeah. So as we look at our openings: one, the franchise shops we actually continuously operate at those. That acquisition is complete—the franchisee shops closed one night and opened the next morning, and our teams did an incredible job with that seamless operation. Given the proximity to our headquarters, we have had teams in here getting them ready and they have done a fantastic job. On things like Salad and Go and Clutch, that really is just adding real estate to our pipeline, so that is part of our normal process. It is really just building on that pipeline as we are on that march to 4,000 shops in 2029. We have an incredible pipeline of leaders—525 operator candidates in our pipeline. Our operators sit just above shop level and they manage multiple shops, so we have a very strong group of leaders. As we look, in particular at adding shops in markets that have been with us the longest, like Arizona, we have an incredible bench of strong leaders in the Arizona market and in the Las Vegas market, so as we add more sites we have great people ready to operate those shops.
Moving on to Brian Mullan with Stephens.
If you could provide any detail on geographic distribution in terms of same-restaurant sales drivers. I know in Q1 you highlighted very strong results out of Texas and that helped support the system-wide results. I am wondering if there are any other callouts this quarter and if you see particular strength across any geographies?
We do not typically share strength across geographies. We had shared that last quarter to highlight one of our most competitive markets and to show how well Dutch Bros is showing up and competing in those markets. But as we look across our comp and our very strong comp—both from a system perspective and from a company-operated perspective—we are seeing strength across all dayparts with positive comp on all dayparts. We are seeing particular strength in the morning, and that is something that as we roll out these different initiatives we have been very focused on growing that morning daypart, so what we have been expecting to see is really showing up in the numbers and we are super pleased by how that is going.
And our next question comes from Margaret-May Binshtok with Wolfe Research.
Hey guys, thanks for taking my question. I just wanted to ask on the Vibe Check scorecard that you launched. Can you talk a little bit about what it measures, what the intent is? Is it about catching issues early or identifying best practices so you can replicate them to other shops? Thank you.
Great. So if we look at the Vibe Check scorecard, it is really measuring those things that are important to our business. Like everything at Dutch Bros, it starts with our people, so really understanding turnover—we are working on a metric to understand how our crews are doing and to make sure that our teams have great visibility across the board to the shop. We also have customer metrics, so what do our customers think of how we are doing? What do they think of our speed, quality, and service? And what differences do we see across shops? Finally, business metrics: how are we staffing our shops? Are we staffing against demand really well? And how are we growing our customers—are we inviting more customers into Dutch Bros? It is all of those things that are an important check. As we roll this out, the most important thing at the beginning of the rollout is the learning that our teams can see from each other. We might have a shop that is doing particularly well in motivating their teams and they have great turnover metrics; the whole region will get to learn from that great operator and understand what they are doing. We will use it to understand where things are and where we can improve, but the greatest use of a tool like this is really the learning that our operators can provide for each other.
We will hear next from Christopher Carril with KeyBanc Capital Markets.
Hi. Thanks for taking the question. Can you expand on throughput opportunities that you are seeing today? Maybe how much potential upside you see from increasing throughput over the near to medium term? And if you could maybe speak to this in the context of your highest-volume stores, maybe touch upon some of the learnings from the Melrose Park shop, that would be helpful. Thank you.
Yeah. So we think we have a great path ahead of us to expand our throughput. What is driving the most right now is labor deployment. We are looking at giving our shops very detailed and clear information around how they are staffing versus the demand by day and by daypart. As you look at that, it helps match the demand and then we can move through those very long lines that we have in some of our shops much quicker. From the learnings in our very high-volume shops, we are doing a great job, and labor deployment helps across our entire system, so getting that correct is critical. The other thing we are working on are longer-term opportunities, really looking at shop layout. As we look at the demand—how much of it is coming through the drive-through window versus the walk-up window, especially now with mobile order at 16% of sales—how do we balance that demand and make sure stations are in the right place and the work is happening in the right place at the shop? Very early days on that, but we are excited by the work that the teams are starting to do on that.
And we will go next to Matthew Curtis with D.A. Davidson.
Hi, thanks. I have another question on Mist being added to the permanent menu. What metrics gave you confidence to make that decision so quickly? Any additional color on repeat rates or how they are tracking relative to Rebel or prior successful product introductions? Thank you.
Yeah. So with adding Mist to the permanent menu, we had been working on Mist for quite some time. Our product development process starts with concept testing to understand customer reaction to the idea and perceived benefits. Then we do taste testing to ensure the product meets customer expectations. Next we do a market test to test operations—can we make this and does it fit within our cadence—and then a broader market test where we look at volumes and repeat rates. Even before the launch of Mist, we had a lot of great data indicating that we were likely to leave this on as a permanent menu item, given what we had seen and the reaction when we temporarily took it off the menu and customers asked for it back. As we rolled it out, we looked carefully at who the customers were, occasions, and what platforms the product was drawing from. What is interesting is with Mist we see new occasions and some draw from Rebel, but we also see draw from things like lemonade. There is a real need in the market for that type of energy that Mist provides. We look at repeat rates and the post-LTO curve—we saw really great trial and then strong repeat rates as Mist continued throughout the quarter.
This now concludes our question-and-answer session. I would like to turn the floor back over to Christine Barone for closing comments.
Thank you for your questions. Before we wrap up, I would like to recognize an achievement that reflects the very best of Dutch Bros. In Q2, Drink One for Dane Day raised more than $1.7 million for the Muscular Dystrophy Association. The event also marked an incredible milestone, helping us surpass $20 million in lifetime donations to the MDA, supporting critical ALS research, care, and services for families affected by the disease. Our partnership with the MDA continues to honor the legacy of our cofounder, Dane Boersma, and reflects our deep commitment to giving back to the communities we serve. As Dutch Bros continues to grow, so does the impact we are able to make together. Thank you to our Broistas, our customers, and our community partners for helping us honor Dane's legacy and make a massive difference one cup at a time.
Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.