Starbucks Likely to Deliver Quarterly Beat on Continued Sales Momentum, UBS Says

03:07 PM EDT, 10/20/2026 (MT Newswires) -- Starbucks (SBUX) is expected to report stronger-than-estimated fiscal fourth-quarter results amid continued sales momentum, which is likely to continue next year, UBS Securities said in a note e-mailed Tuesday. The coffee giant's investors are looking for US same-store sales growth of about 7.5% for the quarter, compared with Wall Street's projections for a 6.7% rise, while earnings are seen topping the Street's views of $0.72 a share by $0.05 to $0.10. UBS projects fourth-quarter EPS at $0.76 and North America same-store sales growth of 7.5%. "We expect continued sales momentum supported by further progress on the 'Back to Starbucks' turnaround plan, with contribution from menu innovation, service enhancements, and marketing activity," UBS analyst Dennis Geiger said in the note to clients. Starbucks is scheduled to report fourth-quarter results Oct. 29. The company launched the "Back to Starbucks" strategy in September 2024 to revive traffic growth and support long-term margin expansion. The coffee giant can continue to drive sales momentum next year via menu innovation across beverage and food, relevant marketing, ongoing coffeehouse upgrades, and improved service levels, UBS said. However, tougher comparisons and reduced benefits from "select tailwinds" could offset the momentum, according to Geiger. Last month, Starbucks outlined plans to shut down about 1% of its North American locations as part of a restructuring program and said it expected fewer net new coffeehouse openings in fiscal 2026. "Focus will be on sales levers to maintain at least 3% (same-store sales growth) or better, with the recently announced (roughly) 250 (North America) store closures likely to provide a tailwind," Geiger said in the note. "We view the closures as increasingly shifting the emphasis toward improving store productivity and returns, while sales transfer should provide near-term support to reported (same-store sales)." UBS projects the company's North America same-store sales to increase 4.6% in 2027, according to the note. The brokerage has a neutral rating on the Starbucks stock with a $105 price target. "We expect solid US sales momentum should continue, but in our view shares already reflect a solid multiyear sales and earnings recovery, with a balanced risk/reward profile at current levels based on a reasonable valuation and the upper end of the (2028) target earnings range," Geiger wrote. The company's shares were up 1.5% in Tuesday afternoon trade and have gained 18% so far this year. Drive-through coffee chain Dutch Bros (BROS) is expected to report its third-quarter results Nov. 4. Price: 99.42, Change: +1.55, Percent Change: +1.58