Starbucks' (SBUX) upcoming fiscal Q2 results are expected to show progress on initiatives to support its accelerating sales trends, with likely upside to sales, margins and earnings, UBS Securities said in a Tuesday note.
The company is scheduled to report its Q2 results on April 28.
UBS said it now expects Q2 North America same-store sales of 6%, up from 4% previously, compared with the consensus of 4%, and forecasts ticket growth of 1% and transaction growth of 5%.
The brokerage said sales are improving with traction against strategic plans including menu innovation, new bakery lineup, continued benefits from the Green Apron Service and operational improvements, adding that it expects North America same-store sales of 5% in fiscal Q3 and 4.7% in fiscal 2026.
Additionally, the investment firm said it is modeling adjusted operating margins of 8.6% for fiscal Q2, versus the consensus of 8.3%, aided by easing inflation, lapping investments and cost savings plans. For fiscal 2026, UBS expects operating margins of 10.6%.
UBS has a neutral rating on the company's stock with a $100 price target.
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