Starbucks Corporation SBUX and Dutch Bros Inc. BROS are benefiting from stronger customer traffic, but their investment cases differ sharply. Starbucks is seeking to convert its Back to Starbucks turnaround into sustained margin and earnings growth, while Dutch Bros is using rapid shop expansion, product innovation and digital engagement to extend its national footprint.
The latest results illustrate these contrasting growth models. In the fiscal third quarter, Starbucks generated 7.9% global comparable-sales growth and delivered significant non-GAAP margin expansion. In the second quarter, Dutch Bros delivered solid same-shop sales growth and opened 48 shops. The company also remains on track to add at least 185 system shops in 2026. Starbucks is driving a recovery across a mature global network, whereas Dutch Bros is scaling rapidly from a smaller base. Which coffee stock has the edge? Let’s analyze.
The Case for SBUX Stock
Starbucks’ Back to Starbucks turnaround is gaining traction. The company delivered its fourth consecutive quarter of positive global comparable sales in the third quarter of fiscal 2026, with global comps increasing 7.9%, led by transaction growth of more than 4%. U.S. comps also rose 7.9%, supported by a 4.2% increase in transactions and 3.6% ticket growth.
Green Apron Service remains central to the recovery. Better staffing, clearer operating routines and improved leadership stability are strengthening execution across the coffeehouse network. Starbucks achieved its targeted service times across every access point during the quarter despite higher transactions, while food availability improved to nearly 99% from roughly 89% a year earlier.
Customer engagement is also strengthening. Starbucks Rewards reached 35.8 million 90-day active U.S. members, with growth both sequentially and year over year. Refreshers generated double-digit U.S. revenue growth, while food attachment reached a fiscal third-quarter record. These trends are helping Starbucks expand beyond its core morning business and create additional afternoon occasions.
Coffeehouse uplifts provide another potential growth lever. Starbucks surpassed 1,000 North American uplifts during the quarter and raised its fiscal 2026 target to at least 1,500. Early results indicate transaction gains across access points, dayparts, formats and customer groups, supporting plans to accelerate the program further in fiscal 2027.
The turnaround is beginning to translate into stronger profitability. Consolidated non-GAAP operating margin expanded 430 basis points year over year to 14.4% in the fiscal third quarter. Starbucks also remains on track with its $2 billion gross cost-savings program through fiscal 2028 and reduced leverage to 2.9 times after repaying approximately $1.8 billion of debt.
However, some risks remain. North American company-operated unit growth could stay modest through fiscal 2027 as Starbucks redirects resources toward uplifts and addresses underperforming locations. Tougher traffic comparisons, continued consumer uncertainty and investments in technology and service could also temper the pace of earnings improvement.
The Case for BROS Stock
Dutch Bros continues to deliver rapid growth through a combination of shop expansion, transaction gains and product innovation. Second-quarter 2026 revenues increased 32.5% year over year, while adjusted EBITDA rose 28%. Company-operated same-shop sales advanced 8.3%, driven by transaction growth of 3.4%, and system same-shop sales increased 5.8%.
The company’s development pipeline represents a central part of its growth case. Dutch Bros opened 48 shops during the quarter and remains confident in opening at least 185 system shops in 2026. Approximately 90% of the development pipeline required to reach 2,029 shops by 2029 has already been identified, providing meaningful visibility into future unit growth.
New-market performance has been encouraging. The Melrose Park shop in the greater Chicago area is pacing toward approximately $7 million in annualized sales, while shops in Atlanta, Charlotte and Tampa are performing meaningfully above initial expectations. A pipeline of more than 525 operator candidates, with an average tenure of nearly eight years, should help support this expansion.
Dutch Bros is also broadening customer occasions. The company completed the rollout of its new food program across approximately 750 system shops ahead of schedule, strengthening its morning offering. Myst Energy Refreshers generated strong trial and repeat rates and were added to the permanent menu, while Dutch Rewards accounted for more than 73% of transactions. Order Ahead reached approximately 16% of the transaction mix.
Dutch Bros recently completed the acquisition of the franchise rights and assets of 31 Phoenix-area locations, including one shop under development, expanding its company-operated presence in the market. Separately, the company agreed to acquire the real estate and related site assets of up to 65 Salad and Go locations. That transaction is expected to strengthen its development pipeline, with conversions planned for 2027.
However, Dutch Bros faces mounting cost pressures as it expands its shop base. Higher coffee prices and food-program expenses are pressuring product costs, while the shift toward build-to-suit leases is increasing occupancy expenses. At the midpoint of its 2026 guidance, Dutch Bros expects approximately 20 basis points of year-over-year net adjusted EBITDA margin pressure, reflecting higher coffee and occupancy costs, partly offset by adjusted SG&A leverage. More demanding transaction comparisons, reduced pricing and the anniversary of the food rollout are also expected to moderate same-shop sales growth in the second half.
How Do Estimates Compare for SBUX & BROS?
The Zacks Consensus Estimate for Starbucks’ fiscal 2026 sales and EPS suggests year-over-year increases of 2.4% and 21.1%, respectively. In the past 60 days, earnings estimates for fiscal 2026 have increased 7.1%.
SBUX Earnings Estimate Trend
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The Zacks Consensus Estimate for Dutch Bros’ 2026 sales and EPS suggests year-over-year increases of 30.5% and 27.6%, respectively. In the past 60 days, earnings estimates for 2026 have increased 4.3%.
BROS Earnings Estimate Trend
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Price Performance & Valuation of SBUX & BROS
Starbucks shares have gained 22.3% in the past year, outperforming the Zacks Retail – Restaurants industry’s fall of 6.7% and the S&P 500’s rise of 21.4%. Meanwhile, Dutch Bros shares have declined 30.5% over the same period.
SBUX & BROS Stock One-Year Price Performance
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Starbucks is trading at a forward 12-month price-to-earnings ratio of 34.99X, compared with the industry average of 22.86X. Dutch Bros’ forward 12-month P/E multiple stands at 46.97X.
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Conclusion
Overall, Starbucks and Dutch Bros present compelling growth stories, supported by improving traffic, digital engagement and efforts to expand customer occasions. Starbucks benefits from margin recovery, upward earnings-estimate revisions and balance-sheet improvement, while Dutch Bros continues to advance its rapid shop expansion and deliver encouraging new-market productivity. However, SBUX’s improving profitability, stronger estimate-revision trend and lower forward P/E give it an edge here.
Both SBUX and BROS currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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