Why Dutch Bros Stock Rallied This Week

Shares of the handcrafted beverages chain Dutch Bros (NYSE: BROS) are up 11% this week as of 4 p.m. ET on Thursday, according to data provided by S&P Global Market Intelligence.

While the market rebounded Wednesday following a 90-day ban on most of the tariffs recently proposed by the United States, Dutch Bros surged even higher.

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With coffee commodity prices already nearly doubling over the last year, tariffs on these rising inputs were the last thing that Dutch Bros and its investors wanted to see -- and now they get a (temporary) reprieve.

There's more to Dutch Bros than coffee worries

Since the U.S. included 15 of the top 20 coffee-producing countries in its original batch of tariffs, it is reasonable for the company's shares to jolt higher after the pause.

However, investors worried about these rising coffee prices (and tariffs potentially coming back) should note that Dutch Bros is a unique case, only generating half of its sales from coffee-based drinks.

Home to an array of boba beverages (aka bubble teas), lemonades, its Rebel energy drink, and numerous teas, smoothies, and shakes, the company is more than just coffee.

Furthermore, while it's nice to see Dutch Bros' stock rebound, it is essential not to get swept up in these news items the company can't control.

Expanding into five new states in 2025, implementing its mobile ordering, and adding 160 shops this year to its existing store count of 982, the company has a lot to offer investors regardless of its shorter-term challenges.

Reaching positive free cash flow last year, Dutch Bros can now self-fund some of its growth rather than diluting shareholder value. Guiding to double its store count by 2029, there's much more to Dutch Bros than worries about rising coffee prices and potential tariffs.

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Josh Kohn-Lindquist has positions in Dutch Bros. The Motley Fool recommends Dutch Bros. The Motley Fool has a disclosure policy.