Coffee stocks fall into an intersection between the retail and consumer discretionary sectors. Both of those sectors hinge on the health of the consumer. In 2025, it's impossible to have that conversation without wading into issues like inflation and tariffs.
And that's where the math gets tough for coffee stocks such as Dutch Bros Coffee (NYSE: BROS) and Starbucks Corp. (NASDAQ: SBUX). Both companies are negotiating higher input prices on coffee. Year-over-year revenue increases suggest that consumers aren't shying away from their coffee fix.
However, higher coffee prices are weighing on margins. That tension between resilient demand and pressured profitability sets the stage for an intriguing match-up between these two very different coffee stocks.
Dutch Bros: Growth Story with Tightening Margins
Dutch Bros is still firmly in hyper-growth mode, and the numbers from its Q3 earnings report underscore just how aggressively management is leaning into new units. Total shop count climbed from 950 in Q3 2024 to 1,081 in Q3 2025, with company-operated shops growing from 645 to 759 over the same period.
That expansion helped push total revenue from about 338 million in Q3 2024 to roughly 424 million in Q3 2025, driven primarily by company-operated shop revenue rising from about 308 million to nearly 393 million.
Same shop sales remain a bright spot, with systemwide same shop sales up 5.7% in Q3 2025, supported by 4.7% transaction growth and a modest 1.0% increase in ticket. Company-operated same shop sales were even stronger at 7.4%, as transactions rose 6.8% and ticket inched higher by 0.6%, signaling that Dutch Bros is still winning traffic rather than leaning solely on price.
For a growth-focused investor, that blend of unit expansion and positive traffic is exactly what you want to see.
The trade-off shows up in profitability. Company-operated shop contribution margin declined from 29.5% in Q3 2024 to 27.8% in Q3 2025, even as absolute company-operated shop contribution grew from 90.8 million to 109.2 million.
Company-operated shop revenue grew faster than gross profit, and beverage, food, and packaging costs held at roughly 26% of revenue while labor and occupancy stayed in the high-20s and mid-teens percentages, respectively. Adjusted EBITDA did increase from 63.8 million to 78.0 million year-over-year in Q3, but the adjusted EBITDA margin slipped from 18.9% to 18.4%, reflecting the cost of scaling the footprint.
Looking ahead, management's 2025 outlook still leans into growth, calling for about 160 total system new shop openings and revenue between 1.61 billion and 1.615 billion. The company also targets approximately 5% same shop sales growth and adjusted EBITDA between 285 million and 290 million, with capital expenditures in the 240 million to 260 million range.
The Issue for BROS Stock – Future Growth vs Current Valuation
That guidance reinforces the core Dutch Bros narrative: this is a story about building a national platform first and optimizing margins later. However, that still means investors have to decide if they're willing to pay the premium that they're currently paying for BROS stock.
Bulls will say that even at 109x earnings, BROS stock is still a value compared to its historic average. The counterargument would be that the company has only been publicly traded since late 2021. So far, investors have bought into the growth now, margin later story, but will want to ensure that the company is in line to hit analysts' forecasts for 38% earnings growth in the next 12 months.
Starbucks: Turnaround With Margin Pressure
Starbucks' latest quarter tells a different story: less about store growth and more about stabilizing comps and rebuilding profitability after a rough stretch.
The company ended the fiscal year with a global store count of 40,990, and Q4 was notable for delivering global comparable sales growth for the first time in seven quarters. Global net revenue for Q4 came in at 9.6 billion, up 5% year-over-year, with full-year global net revenue of 37.2 billion, up 3%.
Under the surface, comps were mixed across regions. In Q4, global comps were flat, with North America and International segments also roughly flat, while U.S. comps grew 3% and China comps increased 2%. For FY25, Starbucks is guiding to low single-digit comparable sales growth, with North America comps targeted at about 2% and International at roughly 2% as well.
That is not breakneck growth, but it is a marked improvement from prior quarters of negative or sluggish comps, and it supports the idea that the turnaround is at least gaining traction.
Profitability remains the sticking point. Q4 global operating margin was 9.4%, down 500 basis points year-over-year on a constant currency basis, and full-year FY25 global operating margin was 9.9%, also down 500 basis points. Non-GAAP diluted net EPS for Q4 was 0.52, down 34% year-over-year, with full-year non-GAAP EPS of 2.13, down 35%.
The Issue for SBUX Stock – A Turnaround Plan Faces Labor and Legal Headwinds
Management characterizes this as a multi-year turnaround and emphasizes a focus on driving the topline while managing controllable costs to deliver durable, sustainable growth and long-term shareholder value.
However, investors still have to accept that margins are starting from a compressed base. They also have to weigh the impact of a barista strike as well as a shareholder lawsuit that alleges Starbucks misled investors, as it relates to the negative financial impact of its anti-union posture.
Which Of These Coffee Stocks is Worth a Buy?
Strictly in the area of coffee stocks, Dutch Bros looks like the purer growth vehicle for long-term investors. The company is adding shops at a double-digit clip, comping positive on both traffic and ticket, and guiding to mid-single-digit same shop sales growth on top of an expanding footprint. Margins are under pressure, but adjusted EBITDA is still growing, and management is willing to spend heavily on capex to support that growth.
Starbucks, by contrast, offers slower growth, but potentially a more asymmetric setup. The store base is mature, comps are stabilizing after a difficult stretch, and the company is openly treating this as a multi-year turnaround focused on rebuilding operating margin from single-digit levels. Non-GAAP EPS is down sharply year-over-year, which keeps expectations grounded, but even modest progress on comps and cost control could have an outsized impact on earnings from here.
Putting it together, Dutch Bros appears to be the stronger choice among these coffee stocks for long-term investors looking for a high-growth coffee name where accelerating unit growth and positive traffic trends can outweigh current margin pressure.
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