Rubber ducks apparently helped Dutch Bros—and its shareholders—last quarter.
The drive-thru coffee chain said on Thursday that its same-store sales increased 2.7% last quarter, which was better than the company expected and was driven by higher transactions, the best traffic count in more than two years. Those results have continued so far in the current quarter.
The results led Dutch Bros to increase its expectations for sales this year and sent the Grants Pass, Oregon-based company’s stock price soaring 28% on Thursday.
“We’re pleased by the performance of traffic during the quarter, [which] certainly came in ahead of our expectations,” CFO Joshua Guenser told analysts, according to a transcript on the financial services site AlphaSense. “We’ve been pleased with what we’ve seen so far in October.”
The rubber ducks came on National Coffee Day, on Sept. 29, when customers received a free rubber duck with every purchase. The campaign helped generate “both excitement and sales volume,” CEO Christine Barone told analysts.
That’s not the only way Dutch Bros generated sales last quarter.
The company also introduced some new products, such as a Cookie Butter Latte and Caramel Apple Rebel.
Dutch Bros also used more paid advertising, particularly in new markets such as Texas, which helped build transaction growth and customer awareness of the brand.
It is also expanding the use of mobile ordering, which is now in 858 locations, or about 90% of the system’s shops. Dutch Bros generated 2.8 million mobile order transactions as of Oct. 31 and executives said that 90% of its users would use the channel again.
And tips are higher. “Our broistas are embracing mobile order,” Barone said.
That rollout helped expand membership in Dutch Bros’s loyalty program, Dutch Rewards. Two-thirds of the chain’s transactions last quarter came from members of that program.
But Dutch Bros also added 1 million new members to that program last quarter, the largest number since the program was launched. Executives credited mobile ordering with the high number of loyalty signups.
Mobile order is proving to be big for the company in other fashions. Those who use it visit the chain 5% more often and the service is already 7% of its sales mix systemwide. Some markets with newest shops have a higher penetration of mobile orders and those shops have better transaction performance than markets with older shops. It’s also helping improve speed of service, Barone said.
Dutch Bros is also testing more food. The company started a “limited” test of an expanded food menu in six shops, including an expanded bakery offering and sweet and savory hot food.
Those tests have apparently been successful. “It is likely a more robust food menu will play a role for Dutch Bros in the future,” Barone said.
That could be a big deal for the company, which gets just 2% of its sales from food right now. The company’s shops generate about $2 million in revenue per shop, per year. Dutch Bros plans more tests in the coming quarters.
Barone said that could help the company accomplish multiple goals.
“As we look across our business, we have an opportunity to life the entire business and then we also have a very specific opportunity to build morning routine,” Barone said. “As we think strategically about food, we believe it’s not only an opportunity to drive more [food] attach, but the more important opportunity might actually be for that beverage adhesion.”
In other words, customers would come in the morning for food and get a Blue Rebel or a cappuccino in the process, which could build sales in the morning. Barone said it’s more of an opportunity for “2026 and beyond,” so the company plans to be deliberate in its testing.
“It is super important for us that we get this exactly right for our teams, for our shops, for our customers,” Barone said. “We expect to expand the test as we go into 2025.”
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