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Fast-growing Dutch Bros coffee chain turned in another strong quarter in Q4 as revenue, same-store sales and operating income all surged, creating no reason to let up in its cross-country dash to 2,029 stores by 2029. In conference call yesterday, CEO Christine Barone offered some color on several initiatives that could offer new avenues for growth, including acquisitions of existing chains, its first non-drivethru location and CPG push. Throughout call, Barone indicated that no class of rivals - whether national coffee giants, fast feeders experimenting with enhanced bev programs, existing players in its new markets or new breed of bev-focused chains that are rolling out - seems poised to make a dent in BROS' performance as its model of cheerful "bro-istas" quickly delivering takeout refreshers and energizers continues to resonate. Dutch Bros was among a flock of restaurant chains that informed Wall Streeters this week how crucial bevs in general - and energy drinks in particular - have become to their growth plans. (Stories below.) Revenues grew 29.4% to $443.6 mil in Q4 on same-store sales increase of 7.7% (+7% at company-owned stores, its preferred model these days). Operating income more than doubled, +115%, to $31.1 mil. It opened 55 shops, 52 of them company-operated, across 17 states, for total of 1,136 at year-end.For full year, revenues grew 27.9% to $1.64 bil on same-store gains of 5.6%. Operating income surged 51.9% to $161.2 mil. BROS opened 154 new shops, 141 of them corporate, across 22 states, as it guns for that target of 2,029 stores by 2029. At least 181 units should open in current year.Among key developments in recent mos, BROS has been rolling out an expanded and upgraded food program even as it cracks new states - in case of NC, via acquisition of an existing chain, Clutch, pursuing model that Phoenix-based co intends to replicate. As rivals from Starbucks on down intensify their efforts behind energy drinks, Barone sees no threat to what's long been a Dutch Bros mainstay. On call, Barone and CFO Josh Guenser offered glimpse of new directions co is exploring.Wall Streeters Wondering About Walkup Store in LA By now big fleet of Dutch Bros stores is exclusively of the drivethru variety - with a single exception. That's a walkup store that debuted in Nov in LA, prompting speculation that new format might offer way for Dutch Bros to crack more urban areas. That store on S Figueroa St near USC occupies ground-floor space in multistory building with clearly marked order and pickup lines, per Google listing that contains lotsa compliments of staff but complaints about long lines and watery drinks. Barone allowed that it opens up range of possibilities, tho she emphasized that it's basically the same two-window structure as at other stores. Instead of having one window for drivethru orders and another for pickup of mobile orders, LA unit repurposes the drivethru window as a walkup window, with a so-called "line buster" staffer approaching pedestrians to take their orders. "We're really pleased by what we're seeing," she said. "This is very early in looking at this type of model . . . Having that mobile order channel has allowed us to open this up . . . A lot of the things that work in our drive-through shops are working really well in this shop in LA." So this could be potential additional channel beyond the drivethru channel that BROS believes has total addressable market of 7K units. Still, it's "very early days. We'll continue to learn before we understand what this opportunity might look like for us."Buying as Well as Building to Maintain Expansion Jag Dutch Bros' move to acquire existing chain called Clutch as quicker way to crack NC market caught many by surprise. On call yesterday, BROS brass made it clear that they regard this as ongoing part of the mix. Indeed, price they disclosed of $20 mil for 20-shop chain was roughly in line with per-unit cost of building its own, with modest additional amount needed to equip and brand store as Dutch Bros. "We are always looking for either ground-up builds or conversion opportunities," said CFO Guenser. "Clutch provided us a great opportunity to grab a hold of 20 sites in a market that we were just moving into, be able to enter that market relatively rapidly at a very capital-efficient way. So, you know, as we think forward, we'll always be looking for conversion opportunities." Barone noted that Clutch founder was former Dutch employee who'd designed concept that already looks and feels a lot like a BROS store, further easing conversion.CPG Effort Viewed as Part of Broader Brand Awareness Push In past week, co had offered update on its newly launched CPG program, uncommonly broad array of creamers, coffee pods, ground coffee and RTDs via partner Trilliant (BBI, Feb 10). Tho Barone had nothing more to add on expansion, which has seen items enter select Walmart and Albertsons stores, she made it clear that she regards initiative not just as opening up ancillary revenue stream but as vital part of 3-yr-old brand awareness strategy. "Paired together, paid media and CPG form a scalable, high-ROI awareness engine, extending the brand beyond our shops, reinforcing daily relevance while converting awareness into incremental shop visits," she told investors. "We continue to believe brand awareness remains a significant opportunity, making CPG one of our most efficient levers to continue driving durable long-term growth." As we've noted, co is debuting the CPG lines only in markets where it already has a store presence, to insure they serve this mutually reinforcing role.Not Dented by McDonald's Energy Assault Asked by analyst how BROS stores in Colo fared during McDonald's energy drink test there, Barone displayed no concern at all. Indeed, it may have helped. "We really didn't see anything in our business," she said. "I think we are the category creator of customized energy, and I think anything that's being shared about the category that creates new customers and new customer interest, I would guess that we would likely benefit from that. And so we do feel really confident about what we're doing from an energy perspective. We've been in the energy business for a very long time and really know what customers want in this space." (We got assist in writing this story from Investing.com transcript.)

Dutch Bros Scores 29% Revenue Boost on 8% Same-Store Boost; Walkup Unit in LA Could Presage New Growth Avenue; Further Acquisitions Likely

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