Can Dutch Bros Bounce Back?
Shares of Dutch Bros (NYSE: BROS) sank as much as 41% at the open, and settled with a 26% loss for the day after its first-quarter earnings report on Thursday. So what happened?
The investment community had a hard time digesting news that labor and commodity inflation are wreaking havoc on the company's bottom line. Because it is a key input, dairy prices hit Dutch Bros hard when they rose 25% in March . Even worse, the company said sales are trending downwards as of mid-March as higher gas prices are having an effect on discretionary income.
Dutch Bros acknowledged that these pressures could remain an overhang for an extended period of time, which was not well-received by investors. Earnings fell and missed expectations as Dutch Bros dealt with the aforementioned dairy spike and increased labor costs, plus elevated costs from the store openings.
Source Fool.com
