03:41 PM EDT, 07/22/2024 (MT Newswires) -- Starbucks ( SBUX ) is expected show further pressure in its fiscal Q3, with same-store sales in the US and China to have contracted, UBS said in a report Monday.

The investment firm said it heard investor expectations for same-store sales decline of about 2% in the US and about 12% in China during the quarter, compared with analysts' forecasts of 1.6% and 10.6% contractions, respectively. Investors also anticipate a "slight pressure" on earnings per share compared with consensus of $0.94, UBS said.

Starbucks' ( SBUX ) quarterly results, which are scheduled for July 30, will likely also reflect "limited traction from several US sales initiatives," the firm said.

"US challenges likely largely reflect a combination of consumer spending pressures and a brand boycott, while China macro conditions and competition are overhangs," UBS said.

UBS said Starbucks ( SBUX ) has sustainability long-term with strong brand strength. And last week's report that Elliot Management has taken a significant stake in the company should result in discussions on sales trends.

For now, UBS is maintaining its neutral rating on the stock, with an $85 price target.

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