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Dutch Bros Inc. shares surged more than 27% in premarket trading Thursday after the coffee chain posted better-than-expected fourth-quarter results and announced plans to expand mobile ordering and food offerings. Revenue rose 34.9% to $342.8 million, surpassing Wall Street estimates. Same-store sales grew 6.9%, and adjusted earnings per share reached 7 cents, both exceeding expectations. The company forecasts 2024 sales between $1.555 billion and $1.575 billion, exceeding analyst projections. Our efforts to develop our foundational transaction driversinnovation, paid media, and our Dutch Rewards loyalty programare working, CEO Christine Barone said in a statement. We believe these efforts are contributing to current momentum and that there is considerable runway for further growth. Dutch Bros stock (NYSE: BROS) has risen more than 143% in the last 12 months. Expansion plans and growth strategy The fast-growing Starbucks rival has made significant strides in its expansion. Dutch Bros recently opened its 1,000th store and added 151 locations in 2024 alone, which is on the lower end of projections it had made early last year. With plans to now open at least 160 more shops this year, the company continues its aggressive growth strategy while increasing its advertising efforts and expanding its rewards program. Barone also highlighted future plans for mobile ordering and food offerings. We see a clear path forward, with multi-year transaction-driving initiatives that layer on top of this foundation, with opportunity to unlock throughput and ramp mobile order in 2025, she said. In 2026 and beyond, we are excited about opportunities with expanding our food offerings. Preserving culture amid growth As Dutch Bros continues to expand, the company said it remains committed to preserving its culture of friendly service, courtesy of the “broistas” (Dutch Bros’s term for baristas) who have been key to its success. As we expand [broistas] roles, we must consider how to do so in ways that continue to foster a fun and energetic work experience that assures we continue to attract and retain the very best people, Barone explained.
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E-Commerce
As a candidate last year, Donald Trump suggested he could easily conquer inflation and ease voters’ fears about the economy.“I will very quickly deflate,” he promised at a California rally. “We are going to take inflation, and we are going to deflate it. We are going to deflate inflation. We are going to defeat inflation. We’re going to knock the hell out of inflation.”Wednesday’s consumer price index report showed that inflation is punching back and President Trump could end up facing the same challenges that dragged down his predecessor, President Joe Biden.The annual inflation rate has risen in the three months since the November election to 3%, with gasoline prices climbing despite Trump’s claims that his return to the White House would signal increased oil production that would lower energy costs.Trump frequently makes far-reaching assertions about his power to bring about change only to find that it is no match for market forces. It’s a humbling reminder that even U.S. presidents are subject to the invisible hand of supply and demand, rather than the masters of it.Consumer sentiment measures suggest the public already sees Trump’s plans to expand tariffs as increasing inflation. On Wednesday, the president called for interest rate cuts, even though rate hikes by the Federal Reserve helped lower inflation that spiked at a four-decade high in 2022.The latest consumer price figures have unnerved economists and the financial markets because they suggest that strong consumer spending, solid job gains and a falling unemployment rate could reignite inflation. Steady demand, particularly from wealthier consumers, makes it easier for companies to keep raising prices.The cost of goods including toys and auto parts rose last month even before the imposition of tariffs. Trump has placed 10% tariffs on China, in addition to announcing the removal of exemptions on his 2018 steel and aluminum tariffs. There are also potential tariff hikes on Canada and Mexico and a potential executive order that would increase tariffs to match the import taxes charged by other countries.All of this means that baseline inflationary pressures could be at their highest level in decades.“Disinflation may be dead, and we may be looking at a higher rate of inflation than we observed for the 20 years prior to the pandemic,” said Joseph Brusuelas, chief economist at RSM, a tax and advisory firm.Trump’s call for lower rates puts him in opposition to Fed Chairman Jerome Powell.“If inflation goes up in general, we will use our tools, which is the interest rate, to bring it back down to 2% over time,” Powell told a congressional committee on Wednesday. Powell also said that Trump’s calls to lower rates wouldn’t sway the Fed.So far, the Trump White House’s main response to this challenge has been to blame Biden, an argument with a short lifespan as Trump is exerting more control over economic policy.“The Biden administration indeed left us with a mess to deal with,” White House press secretary Karoline Leavitt said at Wednesday’s news briefing. “It’s far worse than I think anybody anticipated.”But Trump allies are also starting to float new ideas for tackling inflation. Standing in the Oval Office on Tuesday, billionaire Elon Musk, the head of the president’s Department of Government Efficiency, proposed $1 trillion in spending cuts this year.Musk, the world’s richest man who continues to control Tesla, X and SpaceX among other companies, wants to eliminate $1 out of every $7 spent by the federal government in order to bring the inflation rate to zero. It’s not clear based on lawsuits and Congress’ responsibility for government funding that Musk can deliver those savings.“If you cut the budget deficit by a trillion between now and next year, there is no inflation,” Musk said. “And if the government is not borrowing as much, it means that interest costs decline. So everyone’s mortgage, their car payment, their credit card bills, anything, their student debt, the monthly payments drop. That’s a fantastic scenario for the average American.”Such a steep cut might bring lower prices but also the pain of a sharp economic downturn.“That would be a roughly 4% of GDP cut to federal spending, all in one year,” said Michael Linden, a senior policy fellow at the Washington Center for Equitable Growth. “It would be an instant recession.”For now, markets are anticipating more inflation as consumer demand stays strong and Trump has yet to show how exactly his policies would keep prices low, as he promised to voters.The yield on the 10-year Treasury note jumped Wednesday to 4.62% in response to the inflation report, a sign that investors expect interest rates, growth and inflation to be higher in the coming months.Consumers also say that inflation will rise. Americans’ expectations of inflation over the next year have soared, according to the University of Michigan’s consumer sentiment survey. The February survey said that inflation this year will be 4.3%, up sharply from 3.3% the previous month. Many respondents mentioned tariffs as a concern.When asked Wednesday why Trump’s call for lower interest rates would temper inflation, Leavitt focused on what the president “wants” instead of what he would do.“He wants interest rates to be lower,” she said. “He wants inflation to be lower. And he believes that the whole of government economic approach that this administration is taking will result in lower inflation.” Josh Boak and Christopher Rugaber, Associated Press
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E-Commerce
Elon Musk called on Thursday for the United States to “delete entire agencies” from the federal government as part of his push under President Donald Trump to radically cut spending and restructure its priorities.Musk offered a wide-ranging survey via a videocall to the World Governments Summit in Dubai, United Arab Emirates, of what he described as the priorities of the Trump administration interspersed with multiple references to “thermonuclear warfare” and the possible dangers of artificial intelligence.“We really have here rule of the bureaucracy as opposed to rule of the people democracy,” Musk said, wearing a black T-shirt that read: “Tech Support.” He also joked that he was the “White House’s tech support,” borrowing from his profile on the social platform X, which he owns.“I think we do need to delete entire agencies as opposed to leave a lot of them behind,” Musk said. “If we don’t remove the roots of the weed, then it’s easy for the weed to grow back.”While Musk has spoken to the summit in the past, his appearance on Thursday comes as he has consolidated control over large swaths of the government with Trump’s blessing since assuming leadership of the Department of Government Efficiency. That’s included sidelining career officials, gaining access to sensitive databases and inviting a constitutional clash over the limits of presidential authority.Musk’s new role imbued his comments with more weight beyond being the world’s wealthiest person through his investments in SpaceX and electric carmaker Tesla.His remarks also offered a more-isolationist view of American power in the Middle East, where the U.S. has fought wars in both Afghanistan and Iraq since the Sept. 11, 2001, terror attacks.“A lot of attention has been on USAID for example,” Musk said, referring to Trump’s dismantling of the U.S. Agency for International Development. “There’s like the National Endowment for Democracy. But I’m like, ‘Okay, well, how much democracy have they achieved lately?'”He added that the U.S. under Trump is “less interested in interfering with the affairs of other countries.”There are “times the United States has been kind of pushy in international affairs, which may resonate with some members of the audience,” Musk said, speaking to the crowd in the UAE, an autocratically ruled nation of seven sheikhdoms.“Basically, America should mind its own business, rather than push for regime change all over the place,” he said.He also noted the Trump administration’s focus on eliminating diversity, equity and inclusion work, at one point linking it to AI.“If hypothetically, AI is designed for DEI, you know, diversity at all costs, it could decide that there’s too many men in power and execute them,” Musk said.On AI, Musk said he believed X’s newly updated AI chatbot, Grok 3, would be ready in about two weeks, calling it at one point “kind of scary.” He criticized Sam Altman’s management of OpenAI, which Musk just led a $97.4 billion takeover bid for, describing it as akin to a nonprofit aimed at saving the Amazon rainforest becoming a “lumber company that chops down the trees.”Musk also announced plans for a “Dubai Loop” project in line with his work in the Boring Company which is digging tunnels in Las Vegas to speed transit.A later statement from Dubai’s crown prince, Sheikh Hamdan bin Mohammed Al Maktoum, said the city-state and the Boring Company “will explore the development” of a 17-kilometer (10.5-mile) underground network with 11 stations that could transport over 20,000 passengers an hour. He offered no financial terms for the deal.“It’s going to be like a wormhole,” Musk promised. “You just wormhole from one part of the city boom and you’re out in another part of the city.” Jon Gambrell, Associated Press
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E-Commerce
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