-- Starbucks' (SBUX) North American comparable sales may exceed Wall Street's expectations for its fiscal second quarter, with the coffee giant likely to reap benefits from its strategic initiatives, UBS Securities said Tuesday in a note.
Starbucks is scheduled to release its quarterly results on April 28.
UBS raised its growth estimate for Starbucks' North American same-store sales to 6% from 4% amid gains in ticket and transaction. The market consensus is for an increase of 4%, according to the brokerage.
Sales likely improved due to factors including menu innovation and enhanced marketing, UBS analyst Dennis Geiger wrote.
The company launched its "Back to Starbucks" strategy in September 2024 to reignite traffic growth and unlock long-term margin expansion. The company's first quarter marked the first positive comparable sales in eight quarters, Tigress Financial Partners said last week.
In January 2026, Starbucks guided full-year global and US same-store sales to grow at least 3%. Analysts polled by FactSet project fiscal 2026 global comparable sales to rise 3.8%.
Investors are looking at the guidance possibly being raised, according to Geiger.
Early this month, Starbucks formed a joint venture in China with Boyu Capital, an alternative investment firm.
"(Starbucks') turnaround plans and new sales initiatives should continue supporting a sales recovery," Geiger said.
The stock was down 1.7% ahead of market close on Tuesday, but has rallied nearly 16% since the start of the year.
"We believe shares already reflect a solid (multiyear) sales and earnings recovery," Geiger said.
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