Dutch Bros' (BROS) solid underlying improvement continued in Q1, with limited-time offers contributing to the top and bottom line beat, but the competitive overhang remains, RBC Capital Markets said Thursday.

While April same-store-sales growth of nearly 5% was only slightly above Street's 4.7% Q2 estimate, RBC believes there is room for upside given success of limited-time offers and merch drops in Q1, according to the note.

Starbucks' (SBUX) North America same-store-sales acceleration in Q1 did not appear to affect Dutch Bros' traffic growth, though a competitive overhang remains, the firm said. Management also does not see any impact from Starbucks' Energy Refresher launch, the brokerage said.

The company slightly raised its full-year unit growth outlook to more than 185 net adds from 181 previously, according to the firm. While Street estimates are unlikely to move much higher, RBC believes management sounded confident about potential upside.

RBC maintained an outperform rating on Dutch Bros with a price target of $75.

Shares of Dutch Bros fell more than 8% in Thursday trading.

Price: 53.45, Change: -5.61, Percent Change: -9.50