Dutch Bros Discovers Accounting Error, Cuts Net Loss by Nearly $1 Million
Coffee chain corrects year-old accounting error which results in a lower net loss than originally reported.
May 13, 2022
Dutch Bros (BROS), an operator and seller of drive through coffee shops, spent the first three months of 2021 accruing for expenses for which it was not required to make accruals. Correcting the error reduced the company’s net loss. In its latest quarterly filing, Dutch Bros acknowledged it improperly accrued sick time expense for employees. Since unused sick leave pay does not carry forward and is not paid out upon termination, the accrued liability should not have been recorded.
Instead of reporting a net loss of $5.6 million in the three months ended March 31, 2021, the correction reduced Dutch Bros’ loss to $4.8 million.
The seemingly simple oversight isn’t likely a surprise to investors who read Dutch Bros annual report. In it the company reported a control deficiency related to not having enough accounting department personnel capable of appropriately accounting for complex transactions.
The latest quarterly filing adds to the company’s control deficiencies, warning the limited accounting staff has also resulted in the company not being able to maintain an effective risk assessment process necessary to identify all relevant risks of material misstatement.
Related: BRC, SBUX, DNKN, THI, MCD
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