Dutch Bros faces class-action lawsuit for securities violations

A class-action lawsuit has been filed on behalf of investors who purchased certain securities of Dutch Bros Inc. between March 1, 2022, and May 11, 2022. The lawsuit was commenced in the United States District Court for the Southern District of New York and seeks to represent purchasers or acquirers of Dutch Bros Inc. (NYSE: BROS) securities during this period, also known as the “Class Period”. The suit alleges that Dutch Bros and certain executives violated the Securities Exchange Act of 1934.

The complaint alleges that the defendants made false statements and/or concealed information regarding increased costs and expenses, including on dairy, which led to increased margin pressure and decreased profitability in the first quarter of 2022. The lawsuit claims that defendants’ positive statements about Dutch Bros’ business, operations, and prospects were materially misleading and lacked a reasonable basis.

The lawsuit further alleges that Dutch Bros failed to disclose that it was experiencing increased costs and expenses, including on dairy, which led to increased margin pressure and decreased profitability in the first quarter of 2022.

On May 11, 2022, Dutch Bros announced that its margins had decreased due to a confluence of cost pressures, which resulted in near-term margin compression. As a result, the company’s stock price fell over 26%, causing damage to investors.